Which entity is expected to approve the audit charter?

The audit charter is a formal document that outlines the purpose, authority, and responsibilities of the internal audit function within an organization. It serves as a foundational guideline for audit activities and establishes the scope of the audit’s operations.

The audit committee is primarily responsible for overseeing the external and internal auditing functions of an organization. This committee typically consists of board members who have no operational responsibilities, allowing them to provide independent oversight. Since the audit committee has a mandate to ensure that audits are conducted effectively and align with the organization’s goals, it is the appropriate entity to approve the audit charter. Their approval signifies that the charter meets the standards expected for audit operations, aligns with organizational policies, and adheres to relevant regulations.

The other entities listed, such as the chief financial officer and chief executive officer, may have roles in approving broader organizational policies or in finance-related matters, but they do not typically have the specific oversight function associated directly with the approval of the audit charter. The audit steering committee usually plays a supportive or advisory role rather than serving as the principal approving body for the charter. Hence, the audit committee is the most suitable entity for this task.