At the beginning of your annual audit of Crestview Manufacturing Company's financial statements for the year ended December 31, 200X, the company president confides in you that Henry Ward, an employee, is living on a scale in excess of that which his salary would support.

The employee has been a buyer in the purchasing department for six years and has charge of purchasing all general materials and supplies. He is authorized to sign purchase orders for amounts up to \(\$ 500\). Purchase orders in excess of \(\$ 500\) require the countersignature of the general purchasing agent.

The president understands that the usual audit of financial statements is not designed, and cannot be relied upon, to provide absolute assurance that fraud and conflict of interest will be discovered, although their discovery may result. The president authorizes you, however, to expand your regular audit procedures and to apply additional audit procedures to determine whether there is any evidence that the buyer has been misappropriating company funds or has been engaged in activities that were in conflict of interest.

Required:

List the audit procedures you would apply to the company records and documents in an attempt to discover evidence within the purchasing department of defalcations being committed by the buyer. Give the purpose of each audit procedure.