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Preheat the oven to 350°F (177°C). Line an 8-inch (cm) square baking pan with parchment paper and set aside.
In a large bowl, mix the flour, baking powder, baking soda, cinnamon, salt and set aside.
In another large bowl, whisk the eggs and brown sugar for 1-2 minutes until combined. While whisking, gradually add the oil and whisk until everything is well mixed. Add the vanilla and applesauce and whisk to combine. Then, add the flour mixture and whisk just to combine, and no lumps remain. Fold in the apples.
Pour the batter into the prepared baking pan and bake for 28-34 minutes or until a toothpick inserted into the center comes out clean. Remove the cake from the oven and let cool in the pan for 15-20 minutes. Then transfer to a wire rack and let cool completely.
In a large bowl, with an electric mixer fitted with a paddle or whisk attachment, add the butter, powdered sugar, caramel sauce, and salt, and beat on medium-high speed for 3-4 minutes until creamy and combined.
Spread the frosting on the cooled cake and serve with additional caramel sauce if you like. Store leftovers in an airtight container for up to 4 days.