Board responsibilities include which of the following?

• A. Oversight of CAE, approval of plan and budget, ensuring resources.
• B. Daily management of audits by CAE.
• C. External auditor's selection process.
• D. IT system administration.

Answer: (A)

The main thing being tested is the board’s governance role over the internal audit function. The board is responsible for overseeing the internal audit activity, which includes supervising the Chief Audit Executive (CAE), approving the internal audit plan and budget, and ensuring the function has the resources it needs to operate independently and effectively. This oversight helps maintain objectivity, alignment with organizational risk, and accountability.

The other options mix in day-to-day operational duties or separate functions. Daily management of audits is the CAE’s job, not the board’s; the board sets direction and approves plans but does not run the audits themselves. The external auditor’s selection process is typically handled by the audit committee in coordination with senior management, not the board’s daily oversight role. IT system administration is an IT operation, outside the governance scope of the board over internal audit.