Following are two examples of controls for accounts that you have determined are significant for the audit of ICFR. For each control, determine the nature, timing, and extent of testing of the controls design and operating effectiveness.

Control 1: Monthly manual reconciliations: Through discussions with entity personnel and review of entity documentation, you find that entity personnel reconcile the accounts receivable subsidiary ledger to the general ledger on a monthly basis. To determine whether misstatements in accounts receivable (existence, valuation, 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 entity personnel, you learn entity personnel make a cash disbursement only after they have matched the vendor invoice to the receiving report 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 receiving report and purchase order.