Which statistical sampling approach would an internal auditor typically utilize if she wishes to test...

Discovery sampling is typically used when testing for fraud, especially when the expected deviation rate is very low. This method is designed to detect at least one occurrence of a specific characteristic (such as fraud) within a given sample size, making it effective for identifying rare but critical issues. It is particularly useful when the auditor suspects that fraud may exist but expects it to be infrequent.References:

Institute of Internal Auditors (IIA), Practice Guide – Auditing for Fraud.