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Test of controls (per SA 330) is necessary when:
AThe auditor plans to rely on controls OR substantive procedures alone are not sufficient
BSubstantive procedures alone provide sufficient appropriate evidence
CInherent risk is zero
DThe audit fee is high
Answer & Solution
Correct answer: B. Substantive procedures alone provide sufficient appropriate evidence
1. SA 330.8 requires ToCs in two scenarios: planned reliance or substantive procedures insufficient (e.g. revenue from automated systems with no paper trail).
2. Zero IR and high fees are not triggers.
3. ToCs assess operating effectiveness.
_Source: ICAI BoS CA Final Paper 3, Ch 3 "Risk Assessment and Internal Control"_
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