@Iggy_1985, please see my answer below and let me know if i'm overthinking this or if I'm just plain crazy.
I think its because testing of control of an internal control which is deficient isn't that its ‘inefficient', its just well… pointless. I think in the audit vernacular, inefficient means, which is better from a cost standpoint, time spent on test of control or time spent on substantive testing. In this case, testing of controls isn't inefficient, its just pointless because when evaluating the design of the control we've already determined it to be deficient. Thus answer C is wrong because its not that its inefficient, its just pointless.
Answer B is plain wrong.
But what is confusing is that the facts state that the auditor ‘realized' the internal control is deficient. I interpret that as either 1) the control was not identified as a control to test as part of the audit plan due to materiality or, 2) the auditor thought the internal control design was effective but realized that it wasn't.
If in scenario 1, the control was not identified as a control to test as part of the audit plan and the auditor happen to just stumble on this control in his/her audit, then A is probably a better answer than D.
If in scenario 2, the auditor ‘realized/assessed' internal control as deficient after having ‘determined' that the internal control was effective, then none of the answers apply. Because the auditor would only determine if internal controls are effective or not because the auditor identify this control as having a relationship of risk of material misstatement. Thus it can't be A-D.
AUD - 91
BEC - 84
FAR - 91
REG - 91
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