Although I have never been an auditor, and have never audited inventory, auditors rely on two things, samples, and statistics. Statistics does a remarkable job of interpreting the whole based on the sample. Statistics can tell you that if you sample 10 inventory items and they match the records, what is the likelihood that the total 100 SKUs also match. They allow a small margin of error. So, essentially, they pick random samples that is sufficient for the total size of the inventory SKUs that gets to a statistical margin of error that is small enough to make them comfortable.