Corporate Internal Audit Function Survey
The proportion of respondents that indicated that the chief audit executive (CAE) at the company holds the title of either vice president or senior vice president (48 percent) exceeded the proportion of companies (30 percent) where the CAE has the title of director. In the 2010 survey, a similar percentage (46 percent) had a CAE with a title of vice president or senior vice president. The proportion of companies indicating that the CAE is an officer of the company has been on the decline since the 2007 survey, when it was 36 percent. That percentage was 30 percent in 2010 and only 23 percent in the current survey.
Eighty-three percent of respondents reported that the CAE has a functional reporting line to the audit committee; the functional reporting line for 11 percent is to the chief financial officer (CFO). In contrast, 80 percent have an administrative reporting line to the CFO. The reporting line for the other CAEs is to the audit committee (8 percent); president, CEO, and/ or COO (5 percent); general counsel (5 percent); chief accounting officer (1 percent); or corporate controller (1 percent).
At almost half (46 percent) of the responding companies, the CFO with the audit committee completes the CAE’s performance appraisal, while at only a third of the companies (37 percent), only the CFO is responsible for this task. These results differ significantly from the results of the 2010 survey, in which the CFO solely completed the CAE’s performance appraisal at nearly two-thirds of the companies. Nevertheless, the CFO at about half (53 percent) of the responding companies has sole responsibility for determining the CAE’s compensation; at another 28 percent of firms the CFO along with the audit committee makes this decision.
Over half of the respondents (58 percent) indicated that the CAE meets in executive session with the board of directors or audit committee quarterly, and another 36 percent indicated that this happens at each meeting. As would be expected, the CAEs within member organizations are well-educated and experienced professionals. Each respondent was asked to identify the CAE’s level of education and/ or professional designation and qualifications. Approximately one-third (36 percent) have a Master of Business Administration and 12 percent have a master’s degree in accounting. Sixtysix percent are certified public accountants and 27 percent are certified internal auditors.