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

Question

Quizplus · Accepted Answer

Tests of controls are conducted to assess the effectiveness of the controls in place. If the auditor expects controls to be operating effectively, they perform tests of controls to confirm their effectiveness and potentially rely on them to reduce the extent of substantive testing.

Tests of Controls Are Conducted When