Recommended Guidance
In today’s business environment, where there is increasing focus on governance, risk management, and control, appointing a CAE is a critical undertaking for any organization. This imperative activity is one of the key responsibilities of the organization’s board. The CAE will have a high degree of interaction with senior management and the board and thus needs to demonstrate the right attributes and skill for the position. The CAE’s unique role in the organization requires independence and objectivity while also demonstrating an ability to partner within the organization to add value to its operations. Independence and objectivity are fundamental to the CAE’s role because the individual must be willing to raise difficult issues with senior management and the board even if that proves unpopular. To maintain credibility, CAEs must demonstrate the ability to escalate difficult issues to an appropriate level to ensure they are adequately addressed. In addition, a CAE exhibits the attributes of integrity, intellectual curiosity, and a focus on audit quality. Key skill categories for a CAE include technical, business, communication, and people management skills. During the process of a CAE’s appointment and periodic evaluations, senior management and the board typically will consider those attributes and skills. A CAE may want to consider them when evaluating his or her own performance and considering his or her development needs.
Generally the board would oversee the termination of the CAE. Boards will want to determine if termination is justified and appropriate. It is reasonable for the CAE to expect the board to consider terminating his or her services when there is evidence that professional performance requirements were not met, a material breach in The IIA's Code of Ethics or the organization’s internal code of conduct was committed, or there has been material non-conformance with the IPPF’s Standards.