Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 123

An internal auditor for a regional bank suspects that the head of commercial lending has been granting loans without the required collateral. Which of the following sampling techniques will be most effective for investigating the auditor's suspicion?

Answer options

• A. Variables sampling.
• B. Dollar-unit sampling.
• C. Judgmental sampling.
• D. Discovery sampling.

Correct answer: D

Explanation

Discovery sampling is the most effective method in this scenario because it is designed to find instances of noncompliance or errors when there is a suspicion of issues. The other options, such as variables sampling and dollar-unit sampling, are not specifically tailored for detecting irregularities, while judgmental sampling lacks the systematic approach needed for this investigation.