Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 265

In reviewing the appropriateness of the minimum quantity level of inventory established by a department, an auditor would be least likely to consider:

Answer options

• A. Stockout costs, including lost customers.
• B. Seasonal variations in forecasting inventory demand.
• C. Optimal order sizes determined by an economic order quantity model.
• D. The potential for obsolescence of inventory items.

Correct answer: C

Explanation

The correct answer is C because while factors such as stockout costs, seasonal demand variations, and obsolescence are critical considerations for maintaining appropriate inventory levels, optimal order sizes from an economic order quantity model are less likely to be a focus during a review of minimum inventory quantities.