The board and senior management agree to outsource the internal audit function.

Even when outsourcing the internal audit function, the organization retains responsibility for ensuring the internal audit activity complies with the Standards. This includes maintaining a QAIP to assess effectiveness and quality. The provider executes the function, but the CAE and the organization’s oversight bodies remain accountable for quality.

Options B and C are incorrect since internal and external assessments may be performed by the provider, but ultimate responsibility rests with the organization. Option D (postponement) would violate the Standards.