Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 200

An organization's inventory is stored in multiple warehouses. During an inventory audit, which of the following activities would most benefit from the use of computerized audit tools?

Answer options

• A. Verifying the existence of inventory items in each warehouse.
• B. Assigning the tolerable deviation rate to determine the sample size.
• C. Valuating the obsolete inventory from all the warehouse locations.
• D. Confirming that the purchased items are recorded in the correct period.

Correct answer: C

Explanation

The correct answer is C because computerized audit tools can efficiently analyze large datasets to assess the value of obsolete inventory, which is crucial for accurate financial reporting. The other options, while important, involve more straightforward verification or calculation processes that do not benefit as significantly from automated tools.