Problem

An auditor is examining a nonpublic company’s inventory procurement system and has decided...

An auditor is examining a nonpublic company’s inventory procurement system and has decided to perform tests of controls. Under which of the following conditions should the auditor perform tests of controls? 

A. Significant weaknesses were found in the company’s internal control.

B. The auditor hopes to reduce the amount of work to be done in assessing inherent risk.

C. The auditor believes that testing the controls could lead to a reduction in overall audit time and cost.

D. Tests of controls are always performed when the auditor begins to assess control risk.

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