After Obtaining an Understanding of the Entity and Its Environment

After obtaining an understanding of the entity and its environment, including its internal control, an auditor decided to perform tests of controls. This is likely because:

A) The auditor's risk assessment is based on the effective operation of controls.
B) Evidence to support a reduction in control risk is not available.
C) An increase in the assessed level of control risk is justified for certain financial statement assertions.
D) There were many internal control weaknesses that could allow errors to enter the accounting system.

Correct Answer:

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