C is corrent because an increase in the extent of tests of details (a type of substantive test) will decrease detection risk, which is appropriate because of the increase in control risk.
A is incorrect because, since the controls are not operating effectively, further test of controls is inappropriate.
B is incorrect because it will probably not be appropriate to change the assessed level of inherent risk, but if it is, it would need to be decreased, not increased.
D is incorrect because detection risk must be decreased, not increased.
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