In which scenario might it be considered problematic for the chief audit executive (CAE) to...

It would be considered problematic for the chief audit executive (CAE) to provide assurance services over the payroll function if, prior to becoming the CAE, the CAE was the payroll manager. This scenario poses a conflict of interest and impacts the objectivity required for assurance services, as the CAE might have inherent biases or a conflict due to previous roles and responsibilities within the payroll function.

The Institute of Internal Auditors (IIA) - Code of Ethics and International Standards for the Professional Practice of Internal Auditing.