To assess the accuracy of the client's reported inventory quantities, the auditor should perform test counts for a sample of the pre-numbered inventory tags. If there is a material amount of inventory stored in a public warehouse, the auditor may confirm the inventory with the custodian of the warehouse without necessarily physically observing the inventory. If an auditor is unable to verify the beginning inventory for a first-year audit, but is able to verify the ending inventory, the auditor may render an opinion on the balance sheet and disclaim an opinion on the income statement, statement of retained earnings, and the statement of cash flows. Related to the valuation assertion, the amortization of any premium or discount should be recalculated using the effective-interest method. Sampling involves evaluating less than 100 percent of the population of audit relevance. An example of Block Sampling would be selecting the sales transactions for the entire month of June. As the tolerable deviation rate increases, the sample size should decrease. Probability-proportional-to-size sampling does not work very well in auditing negative balances or zero balances