Certified Internal Auditor Practice Test 2026 – Complete Exam Prep

The approach of sampling based on book value may yield the most accurate results in the context of inventory items because it prioritizes the materiality and financial impact of inventory assets. By focusing on items with higher book values, auditors ensure that they are inspecting those inventory items that are most significant to the financial statements. This method aligns with the principle of materiality in auditing, which suggests that more attention should be paid to larger amounts that could influence the financial results.

Sampling based on book value helps to reduce the risk of overlooking potentially significant discrepancies, as items that represent a high monetary value often have a greater impact on the overall financial picture of the organization. This is particularly relevant in cases where inventory might be subject to valuation issues, obsolescence, or stock discrepancies.

In contrast, selecting easily inspectable items may not provide a representative view of inventory, as it could exclude items of higher value that are more complex to assess. Employing simple random sampling, while statistically valid, may not prioritize the most critical items for review, leading to potential oversight. Similarly, sampling based on units sold may misrepresent inventory valuation as it does not take the actual financial significance of the inventory items into consideration, potentially resulting in an inadequate assessment of inventory-related risks.