An internal auditor is checking the accuracy of a computer-printed inventory listing to determine whether the total dollar value of inventory is significantly overstated. Because there is no time or resources to check all items in the warehouse, a sample of inventory items must be used. If the sample size is fixed, which of the following would be the most accurate sampling approach?
A) Select those items that are most easily inspected.
B) Employ simple random sampling.
C) Sample so that the probability of a given inventory item being selected is proportional to the number of units sold for that item.
D) Sample so that the probability of a given inventory item being selected is proportional to its book value.

Question

Quizplus · Accepted Answer

Sampling proportional to book value ensures that items with higher values, which have a greater impact on the total inventory value, are more likely to be included in the sample. This approach helps in accurately assessing whether the total dollar value of inventory is significantly overstated.

An Internal Auditor Is Checking the Accuracy of a Computer-Printed