Tests of controls are conducted when:
A) controls are not operating as effectively as initially assessed.
B) controls are expected to be operating effectively.
C) the auditor determines that substantive testing is not effective.
D) control risk may be higher than the initial assessment.

Question

Quizplus · Accepted Answer

Tests of controls are conducted to determine whether the controls are operating effectively as expected. If the auditor assesses control risk at a low level, tests of controls help obtain evidence to support that assessment. If the results of tests of controls indicate that the controls are operating as expected, the auditor may rely on those controls in planning the nature, timing, and extent of substantive testing.

Tests of Controls Are Conducted When