4 ‘PART 1~ OVERVIEW OF THE MAS PRACTICE BY CPAS MANAGEMENT ADVISORY SERVICES - (als alld consulting services, ‘business advisory services, management services) fers to that aes of ‘sccounting, work concemed with proving advice and tetnical ‘sistance to hep clients improve the use f thir resources to achieve thal goats tance CONSULTANT 9 Fes who is uel by cao, operon, ical ably, ant enperamert fo aves 9 ant Stine onl fa ing dean ‘ving sce manapementprotems ivlving the eraneaton Peng det contol and operate fe fen ‘CONSULTING PROCESS ~ the " lytical appeeach and process appli’ inaconsulting service [ACTIVITIES 1hVOLVED 1% A CONSULTANG PROCESS 1. Determiation flint bjetves 2 Fasting 1 Detnatito the robes or apprtanies 4. Bealuatinaaiomties 3 omits of pond ction & Communit tale 7 plementation ‘ i Rlomcap CONSULTING SERVICES. — jrewional sie that employ dhe ‘actions weal sls huts ervats, experience ad {owe ofthe contin paces, These serves cute 1 Consultations» the racitonr proves counsel ina short tne frame sel mostly on exiting personal knew abet the cle the technic! matters involve, the crumstance, clint roprewmiations. aul dhe sta itt of the paren vamp = ugestng compa investigation sare foe Tue clit 5 1 — Base Considerations in MAS to devel Aaviory Services ~ the practtioer’s fancion is 10 develop Fie ainge conclusions and recommendations for client consideration. Example ~ defining eeqiremens for on toners anton it pt an “3, Implementation Services =the proc " “ion plan into eect. Example: executing steps 10 improve ME oe poe anion poe nc ee Oe etna nly vi sae ater paseeny amr ei eee ca a Se practi en i ee ae een pe Fi rae el end wl ber ee Oe cee aoc Se en Seger an cra fe Product sie the io wp , ‘client with a product and related ‘services in oto atin, ma “te ee ccc eee Prot a a etaaten of ome devo “penaeneemercnm omnes Siete ene eee ace tae ee coe A cee res aes a eee ieee reenact ey ee °6 PART 1 OVERVIEW OF THE MAS PRACTICE BY CPAS REASONS FOR HRNG MANAGEMENT COMBATANTS Help define specie problems and develop solutions. Provide specialized sls and experience, Provide confidential Service in which the identity ofthe cient isconceled. Train len personne. ep improve inta-company communications, Render an independent pinion, Help get result as BY Cras CPAs perioing management consulting and other advicry serves are cnaere th pace of potatrl suring ‘rebound bythe Cove of Es for Profesional Accountants Commncrnses ors 1. Serves ae ended forthe manageent rather than thi pare, Inve problem saving alae toe toad in sop, Invals vated assignments. Engagements are untalyno-ecuing, Engagement regute Ny Gulifled a ‘Human retin pla aia le notch engagement. score oF as MAS are usually related tothe services rendered by CPAS in the areas of suiting, tax, and accounting, and may involve aces suchas * counseling, management in i analysis, planning, organizing, pes etna hts ‘+ reviewing and suggeting improvement in polis, procedure, systems, methods, and organizational lationship; Sees Bane Canseratons in MAS 1 ing in lp at a on ities ing, pl it Glndcing cle, propia “Seger sing pei tpn taaat Financial Accounting Systems Design ant ev eopet Management Accounting Syste ig at Dov Development ant Fstabishent of hilgary Co fie cover te followings Cost Accounting Development of standard vost stern BB. Cost analysis and contra © Variance tals Financial Monogemont Establishment of capital budgeting prone Shady af he conteteapita ant sos Financial analy for prot studs Establntoent of pectin eas buds Valuation f comin sticks for puro ay ae sale Gert sar sition {A Management or Operations Aust Meestremeet of Operating Poorman: Metges and Acquisitions Stalin {Development of Compensation PrayPART 1 OVERVIEW OF THE MAS PRACTICE BY.CPAS, Pension Plan Review {Special Stadies on Industry Potential Long-Range Planning Projet Feiiy States = fqvolves financial, echnical, and marketing evaluation of ropesed pret Organization ond Personne ‘Rovew of sisting Organization Structure Organization and Administrative Manual Preparation Jol Evaluation an Salary Adminstration Development of Porsomel Rating Prograns Retiement Plan Studies ‘Stues of Otfice Cost Reduction Systems Deering Cast of Aeration Collective Bargaining, Apements Inde Eagimsring 4. Proton, Planning, Stealing and Contra hh. Plant tayo Socios Inventory Manges Studios {Maral Conta system Design and Development Preventive Maintenance Sytem Design aad Dedpmcht Development of Wook Standants 4 Purchasing Management. ncaing Value Anas Marg Product Profitability Anaisa 1h Pricing Pally Detorsnation ake Forevosting 4. Distriowton Cos Analysis Base Considerations in MAS. 9 ‘& Salesmen’s Incentive Compensation Fvaluation Operations Resort = involves the use of mathematical tetiniques, such os Tineor programming, PERI/CPM, queuing thoy simulation et to solve operational prem. listed above ane not necessarily exaustive ne comple toner may offer olher services not wentionel above gon the practitioner's competence, experienc chal fal professional inteyty to mt or deliver sch the he otters. Evaluation of frm of busines organization rattan on operating tenets ‘Designand installation of accounting syste Design ot ingest or srg coating ids Sggeton or improvements i inter canin { Eseblshment ot ctr tases management il api the aut pres I: Preperation of insurance clam in cave of business interruption Jy. Remarchand evento of tematic ann franco forts cect on ian am aeons 1. Asstane inthe preparation of reas an bats ‘Presentation and expat of statemns ‘Asting cena furan orale is 1. Testtyingon chert feta fo. Determintsof th t o aro competion plan tas Ih Addins pon negate nin10 PART ~ OVERVIEW OF THE MAS PRACTICE AY'SPAS 2 sows Sone Sec Asin the instal of 5 mechaion accounting atm 1 Making cot amass of operations ‘ining sures of opal a grin th approximate cost of small busier, tod ire an Sook See 2. Giving advice on iden py ond plane epuion * Caeltons on govern errand stein seompllanc with eporting requrenen 4 “Advieing on accountng’ and tax mates relative testa planning Surveying credit ose . any action beyond the point of decison & soley the Fesponstityo the const. nar the implementations condude, the cen pakpaton '5 concuded, and ony the constants personel ren carry en te ste, 4. the consultant ned nt be independent in meta tude. undertaking an engagement, a practioner is to ia feces cenrcs rome Ce ee eon Dans pee eens ee eo seo oo? ees OO i riestcc ae ma nae a ws evaluated in developing conclusions and = [oes rece ree ee enact cones, In performing MAS, a practioner ust act wih maturty ‘and objectivity ard be ndependert in ental etude egies» patos ob, among er ths, honest and © Ci Roca of cnn gry .nseseere a mera B jeay _ See eee * plescncess cena yee rc ‘a. Integrity ee Pe oa,s PART 1- OVERVIEW OF THE MAS PRACTICE BY CPAS [refers to the abity ofthe practioner to maintain Ns role as 20 objective advsar o corsutant without making any ater 0 mate deciions for he management. a Matury Integy B, Objectuty 4: Independence in mental aude \telers to the practioner’ abaty to Mendy and dene cent needs select and supervise appropiate staf, apply an anajecal ‘Spprcach and. process approniate to the engagement ply ‘owdge of the tecnica subject mater uncer consideration, ‘cnmuneste recommendatens etecively, ond when reqored, [SE In implementing recammensaton, ‘Due professonalcarecPofesional competence Planning and supervision. Chen benefit 3. The practioner, before starting an engogerent, shoul fest make ten conmmurcatons to form te cent of all ignfcat matters related Yo the engagement. Examples of sich significant ‘ater are the foting except ‘objectives of the engagement 1 Scope o engagement {le of al personne who wil be valved the engagement 4 None of the above. ‘This stage of MAS engagement involes various actives whieh may generaty be classed. 25 gaterng of information. ad anahys/evelusion of information gather, "2, Negotiating the engagement Preparing forte engagement Conducting the engagercot 4 Preparng nd presenting the reports and recommen lations In MAS engagements, suicient relevant data should be obtained, cumerted, ond evalisted In developing consis ore recommendatons. Inthe cure ofthe enpagemet, the folowing ‘Should be documenta, excep {3 the evidenal matter obtained ane source 1 ~ Basic Considerations in MAS 2 “by the aternaoes considered. ‘the anaval proces leading to speccrecarmendatons. Wone of te above “To bod poste rising the ae, he pton: ai kn wringer term agreed upon wth the cet dng “his may be done through ey of heft, excet proposal er © contort onfrmaton ter, None the above Ban ofr of sree. When scapes of apron ec 8 ‘agreerent. Proposer Engagement eter Cotimation ler. Conract. tay be considered a6 the master plan forthe engegement serves a a framework for contorg ts progress Tecan be = 2 pring tae tot Socents aw te engagement wl Tcariec out organ the engagement io schedules ad equences, and indfes te various tasks necessary 12 lime schedule, accomplishments, “b. accomplishment, time schedule, and expenses incurred: © qusity of work, number of reports prepsred, and tne ‘Seve 4 aczomplchments, number of personnel whe played 9 role in the engagement, and atandance ofthe particpats Inthe engagement ‘One ofthe activites iid in information gathering recording "the information and documenting the process The can be30 @. [PART 1 ~ OVERVIEW OF THE MAS PRACTICE BY CPAS _zcompishes wth the use of engagement working papers, which [are cnsiered ver uscfl for he foning reasons, exept 2 Gey moe deamon he carrer they provide a historical record ofthe series othe cent. 4. they serve as contractual agreement when accepted and approved bythe cent nal wren reports in MS engagements may be clesfed as eter lng fem or Shr form reper ‘he shor form report 2 coal a the cumstances atau the engagement ncing ‘he practona’ tings ond eeormendtons bi ssed to the cor when he Gece tod the leertation phase wahout requesting asisnce fam e cnn ‘© sual sued when, curing the execution sag6 of the engagement, item repoting ss extensively used and there masa clove and eortinaous cooraation between the ‘corsutan/team memes and the let. {6 umanzs the dings to date, work acomphod in ration 10 lon ad, when apropat, terete recommends, Which of the otowing statement tue? ‘2. Amansgerent ket” sa report subited by the CPA to management after the revew of the management contro {ite cone the ei at he deco oe ung he rei i Management sdvisory servees Include. the consuatve ‘services to mangement in ts decison mating (Expertise im management advisory serves ts acqured by education, audtng ond other experence, and aca! Derformanee of management scsry sence «4. Management. adviary "senees ince declan aking sence performes bythe practioner fr management Stee ates te? tage ecaury os emmenen,# pctine ose (ay te ert of ey tauren eh getng ‘eect ee TE Inte rotor of mes epndence mat be sone 0 ‘roti he cre req of para 2h ‘object. 1. AE provsions of the Code of Professional Ethics are applicable tothe practie of MAS, except those related tothe ‘pression ofa onion on ancl statemets “We oe fotoig res) 0 manager air seen Ta. Gast nai of major investment decisions 1. Design andor instalation of accounting systems Fnancal ary fr project feast stiles @) Alert above32 PART OVERVIEW OF THE MAS PRACTICE BY CPAS. 165. Which ofthe folowing i nota charactor of MAS? In MAS engagements, the natre of work invlved reqres ® leser need fr junior assistance. Amide vary of assgnments are encountered n MAS than In audt engagements. {.) MAS engagements are recurng. 4. Jn MAS, actions to be taken are ented, the benefts of “When il be eceed athe ture 17. Which of te osowing is tan are related tothe performance of NAS by Independent scouring fs? ‘2 Improvement of esting oles, methods, and procedures. Introduction of new vaeas exreerts on methods to imeregemert ‘<. erformance of management urcions and raking decisions 4. Conduct of spcalstuies, reparaoon of econmandabons, {and formation of prs ad proarams (68. Which ofthe folowng wil not imal the independence of a CPA Inthe renaion of Has? 2. The CPA perfarms decsion-making functions fr Ns lent 1. The CPA does not ecend hs sanices beyond. the resentation of recommendations ging of aie. © The CPA ses hs objectuty and acts Ing manner asf he is avocting fr the interest fis cent 4, The CPA performs series whoren hei in effect acting 2s an employee ofthe cent 68, Wich of the folowing statements is correct? 12 MAS confined onW To such seas 5 fhoncal secounting, ‘ua, are tx Sree Bocuse the HAS pact er must be indepen he mus ct ‘athe Geto prtonate any paseo hs engagement. © Aough MAS extends beyond the tradtional acrourting Sances, MS prcttorers are stil bound by the rues of ‘rofessona nes in the practice ofaccunting in gene 4. Inmanagemert audt, 9 team ith a mix of members who fre acturtants ant nomsccoutants wil prove 2 33 1 Basie Consigeratons in MAS esate combination of specaisis an wil offer a 05s: ferletion of ans rom offerer business les. folowing sateen refer onpatere of CPAs in mssegarent rics, eee Tis the abit to deny cient neces use anata ppccach tnd process acu experercen MS wrk and resect, fb In concept, refers to fhe tecnica quaicavons of the Doctoner and his ably to supaves end evaluate the uaty of vet of his taf assigned othe engagement 5005 {bbe response forte succes completion oe prox |e Teimust be retained nthe reniton oF MS work ang ico be “© npr # the CPA performs decors forthe lent | orate as employe of the cent . Meacqurad my ehxcen, sty, aero 9 profesor Te evaoprent Courses, acpi experence a PS WO, ane — “Te folowing chaactercemanagemest sory series xceot a HAS uhecs mare un Saf han sot embers fe frm. MAS notes decison forthe future |e. as creator in saps ad vere in Bate as retest spe prions where exert hos ree “The foloing statements reat to VAS practice stancaes TT A practioner 516 ety the cient oF any eserations he tas regorang accipated bens. 2. Throughout te eagogement there cught 0 be a systematic ‘rhea ree of acompishments and wor shoud be done tathn the famawork of the Code oF EAs ond ter frotersonal standart +, During the engagement, shold thre be signin changes betwoen cot and antgate bones, the chet hous Be inves, Before the’ engagement, the practioner must make rangenerts thy and infer the cient on signet mates related to the engagement4 PART OVERVIEW OF THE MAS PRACTICE BY CPAS Which ofthe statements pertains) tothe MAS practice standard ‘on Clent dene? ‘2. ‘Althe satenents Statements 1,3, 8 4 ony 2. Statements 18 3.0ny Statement only, 73. Asa consultant the CPAMAS practtoner should 2 conduct his engagement as ihe member of the cients ‘ovgenaton, = . exer admastative contol oer the cent’ staf to aod necessary ceays in plementation, © encourage sependence of cent on the consutat's stat so 250 pinpoint cea responsibly In implementing systems. '. ‘ot take responsibilty for making cecsene’ and poy Sdgments MAS engagements, 74. Menagement services of certfed public accountants of tthe following, except if he Ac fan gl sevces 8. Organon cess “© Syed, ever, and neneriaion Pret fesse re pg 75. Which ofthe folowing statements is true? 2. A cotfed puble accountant by vitue of having the necessary acecemic preparations. and’ by hurling the Iensure exeminaten requires to have a CPA icene con reodly ender management serves to the publ. b, Competence as a standard inthe redilsr of menagement Serves by 2 CPA may be equated to having excelent ‘coley preparation to Incuse the usual beccoaureste egre, an MBA, ana other postgraduate stiles © ACA wth MBA and PRO degres is sutorsatsly ques to render maragerent wervies, © Adeaute traning’ and experence in beth the arlytcal approach and process in the parleulr undertaking are requisites forthe CPA to be involved in @ management services engagement. 35 Basic Considerations n MAS. of te fobowing statements fa? Gis peroming maragement serves may be cosered fo bein the practice of managemer cnsutg. Included in the practce of consuting isthe provision of fnfdertil service in wich the len.ty of the cent ‘onctlee | Business fms hire maragement consultants to help deine Spe protems and develop solitons. (Pas provide management serces to go around the ethical fanstrais a mencated oy the Accountancy RC, ofthe oon ater sot eed? AA reper tae nen monty we trstrsncertves Dore the government put hea. RG sre nay a new er svat man rang asthe ert becngg foe sore dy. Reba rovescrsaong sevens‘ an cxsng ac en IRC@A afters ard provides conning sevens 10 te Mole ‘onoeing ces Xe cA fr areca f csty sare 8 een, gang nine ang pret, rang aon Tapers os 1 2 peat rede cris Seve Nara Co hs er ore fom, aes © a oe el he vn nner be hn "er issetsers verses fae Beer coaar cece desonr te oe, iy The cl te tants cecaccraa’ ar the sustor Theis coetar sau orate cor for art Icon wn ene sat ce og coasig seven # let by weve fs conpete exes ad rae Ktovecos ote can rans tebe panto © fone decor the cent oe wou ds Isp fo peveaoraljcgne oe decesn of te fusions fo ent dtr or the rte Greve te preset tea a conmerase te Poet dat fe sera cee tone evga36 . PART 1 OVERVIEW OF THE MAS PRACTICE BY. CPAS. 3. A.PA Should reject an MAS engagement ‘2. he audits the fnandal statements of @ subsilary of the prospective cet ‘the proposed engagement i not accounting related. 1 Fecrmendtons ae Bebe orien by the Ie ould requre hm to make management decisions for the prospective cane « ‘After making the preliminary But arangaments, an engagement ‘nfrnaten fete shou be sent the cient. The letter sy ‘woul ot node 2 Statement that managarent letter wl be kd outing Cemnments and suggestons as to any procedures requ the cents atenton an estate ofthe time to be Speht on the aut work by Se tat ana ® statement that manogerent adveary services woud be ‘made avaable ypn request. 2 reference tothe autor respanstbity forthe detection of fern or megularites. NCR engagedin MS practice may nok 2. oxcoee ‘cnet formaton uns authored or bloated. vay {ac independent auctor the Some ctf, ‘accept other erpionmest while serving 35 menagement ‘Srsttan be independent in ental atid. » 4 ACPA in pubic practice was engaged by cent who has ite ‘counting and manapemest experience to perform MAS. Aer resenting several ateatveslutons and the probable cutome ach the CPA decded to plement the Bet aermate sion ‘and assured ful respon for which the cet apres. 3. The CPA ch jut the ight thing 1. he-CbA shou have ahod the cnt fst fhe (he cet) s ‘aptle to implement the solution before doing hie 37. 1 Basic Consideration in MAS The GPA shuld rot have inleented the best akerate ‘Blin and shoud no ave assures il respons eve the cht grea fx these spa Mave en dre bye Set. ‘The GA was correct n imlemeriin the sehton, but fu esponsbty shave have Den assume ty the ie Mand are partners in an MAS fr. One te fs cent 6% Corporation, wherein ls aboard member. X Corpation rs not gr aust chen X Caporaton negotiating a7 MS engagement fe the FAS Tn TEs unethical for the, MAS Fle acco the ensagement because ts 8 vldaton ofthe Stands on need bb it aetna forthe MAS fm to acest the ee thease 5 nas nical interests 9X Corporation Pomc Ne eos hs independence 35 pracivnet Tes no usta forte MAS fro actep Ue gee sec X Corpraton may pot be considers yy se ‘empany othe HAS A. 4d lat uel rth 8 inns ne fen tere woul dctreo te restore thease engiemert 2 ray mite al fr MS cent ast for ter! corned sym tolaton the rato soe: at carta | nanding sere acu. Tne ci es (let quests at is foes conser saps ‘The practioner knows tat such Former ons es sunt Taperence 10. prowde the necessary tects} uncon and Supersion. Ine case, the practioner shoul! Oo el he cert evrying he kno about the fone ora sp he could be revert ean supansing the salto, Brevert the former constant to supervise the salto, Bite shoud not tl te cent anything aout Ms (Teme ensultents) capanities, ‘Sou encourage the former consutant to attend a seman) ‘weishop tle the bass of engagement superson. b38 PART 1 OVERVIEW OF THE MAS PRACTICE BY CPAS. 4. deeine the engagement # the cent inst tat the former 85. Which ft folowing statements is corect? 2 She pecomante of corey trees fran atest let 1, The wean wenn rt may nt racer ine ert may ee or wth ogre guterng lean dt fn te ae, the practioner eed fo cane or waht fom ‘Srasg engogemert when the ape on spe eee palo 2 re. q «Ina covulig Seve, te cat develops the fess, ‘lees reonenston res 4 mpiemerton Services ie. ptig no operon © ano econmensten te pester as cen | Bane Considerations in MAS 39 75 HD A 6D OMA we “0 88 BC aC 0 wc BD oc BD | DA BA BC 8B M0 | AA 7B 0 dD BA! mo WA HC ME | Bo uc m0 0 1A | DMA OA BD 2B Bac ue A 0 Io eA 2c BA HA | A ome 2A BA 1D | A mc 4D 0.0 7D Po me 8 sc 78 | PA MA BA BE BE Po uD 7d HD Dd 1D RA #0 HB MC 1B Choice A refers to an ates: sevice In a consuting service Pte practioner develops the foaings, conclusions, end ‘econmandatons presented. > the nature and scope of work 1 determi slay by the rtoatwoen the practonst avd te clei > gererly, the work fs pevotmed eny or he use snd Bonet one chent 1B Management consuting i not mod to CPAS_ Sof nom, there i no goverment lensure examination yet, paiovary formanagementconeutants Hence, t's rot egiaea by (rare 3)