AICPA Exam CPA-Auditing Topic 1 Question 61 Discussion

Choice 'd' is correct. The auditor need not search for significant deficiencies in internal control, but should document and communicate any such deficiencies that are discovered.

Choice 'a' is incorrect. Tests of controls are designed and applied to evaluate the risk of financial statement misstatement, and to determine the nature, timing, and extent of substantive tests to be performed. They are not designed to discover significant deficiencies in internal control.

Choice 'b' is incorrect. Searching for significant deficiencies in internal control is not part of an audit, and it would be inappropriate for the auditor to state that no significant deficiencies in internal control were noted (even if management requested such a statement).

Choice 'c' is incorrect. Searching for significant deficiencies in internal control is not part of an audit even if the auditor expects that controls are operating effectively (i.e., expects to rely on controls).