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XAT 2016 — Decision Making Question 9

Decision MakingEasy
Passage / Data

Answer the following question based on the information given below.

Indian Institute of Research is a Government-established body to promote research. In addition to helping in policy making, it also provides free online access to all the articles to the public. It has a mission of publishing high quality research articles. Till 2010, the publication of articles was very slow because there was no incentive for researchers to publish. Researchers stuck to the mandatory one article a year. Most of the researchers engaged in offering consultancy and earned extra income. Since its inception, the institute was considered the best place for cutting edge research. The new director of the institute was not happy with the work done by researchers in silo and came out with a new research policy in 2013 to increase research output and improve collaboration among researchers. It was decided that extra benefits would be offered to researchers with new publications. As a result, the number of research articles increased fourfold in 2014. At the 2015 annual audit, an objection was raised against increased expenses towards remuneration for researchers. Further, the Government opined that the publication was itself a reward and hence researchers need be paid nothing extra. The director tried to defend his policy but the response from the government was not encouraging.
l. Note: Auditors role is to verify accounts.

The director wanted to promote good decision making at Indian Institute of Research. A few trusted colleagues offered the following suggestions:

  1. Auditors need not be allowed to object to extra benefits schemes.
  2. Auditors need not pin-point sudden increase in expenditure
  3. Auditors need not be consulted before taking any policy level decision.

Which of the following combination of options should the director agree THE MOST with?

Answer & solution

Correct answer: 1 and 3

  • A

    1 and 2

  • B

    2 only

  • C

    2 and 3 

  • 1 and 3

  • E

    1, 2 and 3

Solution

According to the passage, the role of an auditor is to verify accounts. Hence, we can infer that an auditor's role is confined to supervising the expenses of the organization. Therefore, auditors should not have a say in the extra benefits scheme of the organisation and in other decision making processes.
Hence, the correct answer is option 4.

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XAT 2016 Decision Making Q9: The director wanted to promote good decision making at Indian Institute of Research. A few trusted colleagues — Solution | TheCATExam