Following are three examples of controls for accounts that you have deter- mined are significant for the audit of internal control over financial re- porting. For each control, determine the nature, timing, and extent of test- ing of the design and operating effectiveness. Refer to Exhibit 7-2 for a way to format your answer. Control 1. Monthly Manual Reconciliation: Through discussions with company personnel and review of company documentation, you find that company personnel reconcile the accounts receivable subsidiary ledger to the general ledger on a monthly basis. To determine whether misstate- ments in accounts receivable (existence, valuation, and completeness) would be detected on a timely basis, you decide to test the control provided by the monthly reconciliation process. Control 2. Daily Manual Preventive Control: Through discussions with company personnel, you learn that company personnel make a cash disbursement only after they have matched the vendor invoice to the re- ceiver and purchase order. To determine whether misstatements in cash (existence) and accounts payable (existence, valuation, and completeness) would be prevented on a timely basis, you decide to test the control over making a cash disbursement only after matching the invoice with the re- ceiver and purchase. Control 3. Programmed Preventive Control and Weekly Information Technology-Dependent Manual Detective Control: Through discussions with company personnel, you learn that the company's computer system performs a three-way match of the receiving report, purchase order, and invoice. If there are any exceptions, the system produces a list of un- matched items that employees review and follow up on weekly. The com- puter match is a programmed application control, and the review ? p-986