Mark Companys audit team is evaluating the controls that Mark has implemented over the automated processing of payroll transactions. During the understanding and assessment stages of the audit, the following processing and output controls have been identified as being important in this processing:

1. Any gross pay calculations in excess of $25,000 per month are identified and written to a rejected transaction file for separate investigation because Marks highest paid employee whose salary is processed through the system earns $300,000 per year.
2. The system generates a report of any errors or unusual situations identified during transaction processing. This report is reviewed and any items are resolved in a timely manner, and the resolution is documented by notations made on the report.
3. Any changes to employee master file information since the last payroll period are evaluated to ensure that they have been properly authorized by the appropriate personnel.
4. The output is reviewed for reasonableness prior to distribution to users.

Required: Consider the four methods of testing the operating effectiveness of controls (inquiry, observation, document examination, and reperformance). For each of the preceding controls, provide an example of how Marks audit team might choose to test the operating effectiveness of the control using the four methods of test of controls (e.g., how would the audit team use inquiry, observation, document examination, and reperformance to test control #1, the generation and review of the system log?). [Note: Not all types of tests of controls will be appropriate for testing all of the controls.]