The inspector will make a physical examination of the vehicle, and may also scan the Engine Control Unit (on-board computer) to check for any stored fault codes. They will note any faults, as well as taking photographic evidence, and may take the vehicle for a test drive.
If you wish, you may be present when the vehicle is inspected. An inspection may take place at your home address or at a garage. This is especially relevant when the vehicle may, for example, need to be on a ramp for the inspector to view the parts required.