IIA IIA Certifications IIA-CIA-PART4 Questions & Answers

• Question 51:

  Which of the following is an example of framing error?

  I. A job seeker may hope that the attractive appearance of a resume will sway the judgment of a potential employer.

  II.

  A glass still holds 50% of its capacity whether the glass is described as half full or half empty. However, the former (latter) characterization may lead to a more (less) favorable opinion of the content.

  A.

  I only.

  B.

  I and II.

  C.

  II only.

  D.

  Neither I nor II.

  Correct Answer: B

  Framing error is a perceptual problem. The presentation or context of information may bias its interpretation and the resulting decision. Thus, favorably (unfavorably) presented information may be viewed more (less) favorably than its merits warrant. Both I and II are examples of framing errors.

• Question 52:

  Understanding the best alternative to a negotiated agreement (BATNA) helps a negotiator to avoid which of the following? I. Accepting an unfavorable settlement. II. Rejecting a favorable settlement:

  A. I only.

  B. II only.

  C. land II.

  D. Neither I nor II.

  Correct Answer: C

  Accepting an unfavorable settlement and rejecting a favorable settlement are two mistakes avoided by understanding the BATNA. The BATNA is the acceptable minimum outcome if a negotiator cannot obtain the desired result.

• Question 53:

  Which of the following is the acceptable minimum outcome if a negotiator cannot obtain the desired result?

  A. Win-win attitude.

  B. Cooperation.

  C. Best alternative to a negotiated agreement (BATNA).

  D. Win-lose attitude.

  Correct Answer: C

  BATNA is the acceptable minimum outcome if a negotiator cannot obtain the desired result. The BATNA helps a negotiator to avoid accepting an unfavorable agreement and rejecting a favorable agreement.

• Question 54:

  When negotiating with an analytical personality, the negotiator should:

  A. Present facts and precedents in an organized manner.

  B. Push the other party for quick closure of negotiations.

  C. Focus on creating a bond with the other party.

  D. Include unimportant items in the proposal for bargaining.

  Correct Answer: A

  An analytical person tends to be drawn to details and swayed by factual information.

• Question 55:

  When planning for successful negotiations, the negotiator should:

  A. Understand the implications for both sides if the negotiation fails.

  B. Concentrate solely on the issues in the negotiation at hand.

  C. Not deviate from stated positions.

  D. Depend on the initial research prepared for the negotiation.

  Correct Answer: A

  Negotiators should assess the best alternatives for both themselves and the other parties to determine their relative strength in the negotiation process. If alternatives are not readily available or are unattractive, a party is under additional pressure to make the negotiation work.

• Question 56:

  In regard to effective negotiation, a win-win attitude is characterized by:

  A. Seeking mutual benefit and satisfaction.

  B. Cooperative.

  C. It promotes support of, and commitment to, the agreement.

  D. All of the answers are correct.

  Correct Answer: D

  In regards to effective negotiation, a win-win attitude is characterized by seeking mutual benefit and satisfaction, being cooperative, and promoting support of, and commitment to, the agreement. In contrast to a win-win attitude, a win-lose attitude is competitive and is a zerosum game instead of a positive-sum game.

• Question 57:

  A reasonable BATNA (best alternative to a negotiated agreement) protects against bad decisions caused by the following:

  I. Framing error

  II. Escalation of commitment

  III.

  Overconfidence

  A.

  I and Ill only.

  B.

  I, II, and Ill.

  C.

  I only.

  D.

  II and Ill only.

  Correct Answer: B

  A reasonable BATNA protects against bad decisions caused by the following:framing error, escalation of commitment, and overconfidence. Framing error is a perceptual problem. The presentation or context of information may bias its interpretation and the resulting decision. Escalation of commitment is adherence to a failing course of action when a purely objectivedecision maker would abandon it. Overconfidence is the common tendency to overestimate the chances of success.

• Question 58:

  Which of the following is an example of a two-party negotiation?

  A. A person sells a car to a used car dealer.

  B. A person requests a financial institution to pay another person.

  C. A person sells stock through a broker.

  D. A person sells a house through a real estate agent.

  Correct Answer: A

  A person's sale of a car to a used car dealer is an example of a two-party negotiation. Only the seller and dealer are involved in the negotiations.

• Question 59:

  Which of the following results is most likely to occur when public media are used to resolve disputes between employees and management?

  A. The company's image may be improved.

  B. Public opinion may pressure the parties to resolve the dispute.

  C. Communication between employees and management is improved.

  D. The need for support from a union is increased.

  Correct Answer: B

  When public media are used as tools for resolving employee-management disputes, communication is hindered because the issues are addressed to the public rather than discussed with the other party. Moreover, compromise becomes difficult because the stated conclusions are solidified by public opinion. However, the need for union support is reduced because public pressure may help to resolve the negotiations.

• Question 60:

  The behavioral science literature identifies diffusion as an effective approach to resolving conflict. An auditor effectively using diffusion in working with a confrontationalauditedwould:

  A. Set aside critical issues temporarily and try to reach agreement on less controversial issues first.

  B. Emphasize differences between the parties.

  C. Avoid the conflict situation.

  D. Identify the sources of conflict and address them directly.

  Correct Answer: A

  Diffusion temporarily leaves the conflict unresolved. Smoothing (downplaying differences and emphasizing common interests) and compromise (requiring each party to make concessions) are diffusion approaches to conflict management. The disadvantage is that the underlying problems remain unresolved while the less controversial issues are being addressed first.