Question

In which of the following circumstances is it least likely that test of controls will be performed?

A. The expected deviation rate exceeds the tolerable deviation rate
B. The planned assessed level of control risk is a level slightly below the maximum
C. The risk of assessing control risk too low is less than the expected deviation rate
D. The tolerable deviation rate exceeds the risk of assessing control too low

Answer 1

In circumstances where the expected deviation rate exceeds the tolerable deviation rate, it is least likely that a test of controls will be performed. Correct option is A.

Step-by-step explanation:

Test of controls is least likely to be performed when the expected deviation rate exceeds the tolerable deviation rate (Option A). When the expected deviation rate is higher than the tolerable deviation rate, it indicates a high risk of control failure. In such circumstances, it may not be necessary to perform further testing of controls.