The sales of most product types and brands eventually decrease permanently. This decline may be slow or rapid. This first symptom of the decline stage of a product's life cycle triggers such other effects as price cutting, narrowing of the product line, and reduction in promotion budgets.

Application controls provide reasonable assurance that the recording, processing, and reporting of data are properly performed. Review and approval procedures for new systems are among the general controls known as system software acquisition and maintenance controls.

The total expected cost of safety stock equals the sum of the expected annual stock out cost and the expected annual carrying cost. Annual expected stock out cost equals the cost per occurrence US $1,750), times the probability of a stock out per cycle, times the number of cycles 24). Annual expected carrying cost of a safety stock equals the unit carrying cost US $5) times the number of units. Hence, a safety stock of 400 units has the lowest total expected cast.

Internal auditors may use scatter diagrams to detect misstated data, relationships among variables, and unusual operating results. A scatter diagram is a graph of data points. When the points have a systematic relationship, the independent (x) variable and dependent (y) variable are likely to be correlated; i.e., the value of one variable is a predictor of the value of the other. However, the variables in this scattergram are clearly uncorrelated because training costs do not predict sales.