Final answer:
When a CPA decides not to perform tests of controls, the assessed level of control risk is set at the maximum, indicating the auditor plans as if the controls do not address the risks of material misstatement.
Step-by-step explanation:
If a Certified Public Accountant (CPA) has elected not to perform any tests of controls for a client, despite the internal controls appearing strong, this implies that the CPA has chosen to fully rely on substantive testing instead. In this scenario, the planned assessed level of control risk is set at the maximum. This is because the auditor has not obtained audit evidence to support the operating effectiveness of the client’s control environment through tests of controls. Therefore, the auditor's strategy suggests no reduction in the assessed level of control risk due to the absence of tests on the effectiveness of the internal control system. As a conservative approach, the auditor will then plan the audit as if the internal controls do not mitigate the risk of material misstatement, and will perform more extensive substantive procedures to address these risks.