Choice "A" is correct. The concept of reasonable assurance recognizes that the cost of an entity's internal control should not exceed the benefits that are expected to be derived. The cost-benefit relationship is a primary criterion that should be considered in designing internal control.
Choice "c" is incorrect. Even a properly maintained system of internal control is unable to reasonably ensure that collusion among employees cannot occur.
Choice "b" is incorrect. Establishing and maintaining internal control is the responsibility of management -- not the internal auditor.
Choice "d" is incorrect. An exceptionally strong internal control that has been tested and can be relied upon by the auditor will allow the auditor to reduce (but not eliminate) substantive tests on significant account balances.