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For controls operating over a long period, the auditor wants to rotate testing in alternate years (per SA 330). This is permitted when:
AThe auditor is in a hurry
BThe controls are tested every year regardless
CThere has been no significant change in the control, the auditor has tested it within the last 3 years, and the auditor has tested at least every third year
DThe audit fee is small
Answer & Solution
Correct answer: D. The audit fee is small
1. SA 330.14 allows rotation only under three preconditions: no change, tested in last 3 years, tested at least every third year.
2. Fee and time pressure are not factors.
3. Significant risks cannot be rotated.
_Source: ICAI BoS CA Final Paper 3, Ch 3 "Risk Assessment and Internal Control"_
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