Tests of controls are most likely to be performed when:
A)Controls seem weak and must be properly documented.
B)The auditor plans to rely on the controls.
C)The auditor wishes to assess control risk at the maximum.
D)The client's control environment appears weak.

Question

Quizplus · Accepted Answer

Tests of controls are conducted when the auditor intends to rely on the effectiveness of the controls to reduce the assessed level of control risk. If the auditor plans to rely on the controls, they must be tested to determine the level of risk associated with the controls. Weak controls would result in a higher risk of misstatement, and maximum control risk may not allow reliance on the controls. Therefore, options A, C, and D are incorrect.

Tests of Controls Are Most Likely to Be Performed When