MPs plan to investigate whether the Office for Standards in Education is wasting its pound;197 million annual budget.
The House of Commons education select committee said in a report on Ofsted this week that it wanted to "consider the cost-effectiveness of the inspection regime given the number of schools performing well is increasing".
The announcement follows complaints last month by Peter Housden, director general for schools at the Department for Education and Skills, that the education watchdog was too expensive.
The MPs' report also criticised Ofsted for confusing teachers over the meaning of the word "satisfactory". In his annual report this year, chief inspector David Bell questioned whether satisfactory teaching was now good enough.
The MPs said: "We remain concerned that the apparent interpretation of the term 'satisfactory' has shifted and caused confusion and concern among parents and teachers. It must be understood that satisfactory performance represents work that is adequate in all respects."
During its sessions, the committee heard from the chief inspector that truancy had remained constant, in spite of a range of strategies to boost attendance. The committee expressed "great concern" at this and called on the Government to produce an action plan to tackle the truants.
A DfES spokesman said the department agreed it was unacceptable that 50,000 children missed school on an average day, but felt its new pound;470m behaviour and attendance strategy would be successful.