Final answer:
When tests of controls reveal that controls are operating as anticipated, the assessed level of control risk will decrease.
Step-by-step explanation:
When tests of controls reveal that controls are operating as anticipated, it is most likely that the assessed level of control risk will decrease.
When controls are operating effectively, it means that the risk of material misstatements in the financial statements is low. As a result, the auditor can rely on the controls and reduce the assessed level of control risk, which leads to a higher level of assurance that the financial statements are free from material misstatements.
For example, if a company has a control in place to ensure that all sales are properly authorized, and the tests of controls show that this control is consistently followed, the auditor can conclude that the control is effective and reduce the assessed level of control risk.