MAS concepts, practices and standards
Four sectors of accounting profession
 Public – bookkeeping, audit/assurance, tax
compliance, advisory/ consultancy
 Private
 Government
 Academe
Management advisory services
- refers to that practice of accounting
concerned with providing advice and
technical assistance to help management
improve the use of resources in achieving
organizational goals
- Sometimes referred to:
Management Services
Advisory Services
Business Advisory Services
Financial and Advisory Services
- The Certified Public Accountant who
practices MAS work is called advisor or
consultant
- MAS principally serves the needs of the Top
Management
- The job of an of an advisor is to provide
advice and technical assistance to mangers
- The practitioner must not assume the role of
the manager in making decisions
Analytical approach and process
- It also refers to the systematic objective and
rational method of solving organizational
problems
- It involves combination of activities in
determining client objectives, fact-finding,
opportunity, problem definition, evaluation
of alternatives, formulation and follow-up
*advisor – MAS – management
Areas of MAS Practice
- Traditional consultancy services
- finance and accounting – cost accounting
- nonfinance and nonaccounting – creation
of company policies and control
- Emerging consultancy services – computer
risk management
MAS Standards
- Moral – religious teachings
- Ethical – code of ethics
- Legal – accountancy act of 2004
- Technical – MAS practice standards
MAS Practice Standard 1
Personal Characteristics  The practitioner must
act with integrity and objectivity and be
independent in mental attitude
MAS Practice Standard 2
Competence  It is the measure of intelligence,
expertise and required skills to perform the
engagement
- A practitioner should reject possible
engagement that would require a level of
competence that he does not possess
MAS Practice Standard 3
Due Care
 Exercising utmost prudence in the conduct
of the engagement
 This does not guaranty perfection
MAS Practice Standard 4
Client Benefit
 Before accepting an engagement, a practitioner
should notify the client of any limitations in
achieving anticipated benefits
 A practitioner should reject possible engagement
that would require a level of competence that he
does not possess
MAS Practice Standard 5
Understanding with the Client
 Before accepting an engagement, a practitioner
should inform the client of all significant matters
relating to engagement
The following matters should be well understood
by the client:
- Objectives
- Scope
- Approach
- Roles
- Manner of communication
- Timetable
- Fee
MAS Practice Standard 6
Planning, Supervision & Control
Planning  translation of engagement objectives
into a structured set of activities and events within
a targeted time schedule
Supervision  careful selection of engagement
team members and proper guidance during the
conduct of the engagement
Control  measurement of progress in meeting the
engagement plan and objectives
MAS Practice Standard 7
Sufficient Relevant Data
- Sufficient relevant data must be obtained,
documented and evaluated in order to
develop conclusions and recommendations
Sufficiency  quantity or amount of information
Relevance  reliability or quality of information
- The practitioner must exercise professional
judgement in determining the quality and
quantity of data required
MAS Practice Standard 8
Communication of results
- All significant matters relating to the result
of engagement must be communicated to
the client either by oral or written form
- MAS report shall include the following:
 o Principal findings
o Conclusions
o Recommendations
o Major Facts & Assumptions
o Limitations
o Reservations & other qualifications
o Other results of the engagement
MAS Practice Standard
- MAS Practice Standards 1 to 3
 pertains to personal qualifications
- MAS Practice Standards 4 to 8
 pertains to relationship with client
and attitude towards work
- Characteristics of a MAS Engagement
o Service is for management
o Scope is broad
o Future orientation
o Non-recurring
o Highly qualified staff
o Diversity
Consultancy Fees
Service of CPA is not free - It involves preliminary
discussions with the client to determine whether
the proposed engagement should be pursued or not
Cost of consultancy shall consist of the following:
- Salaries or billing rates
- Reimbursable Cost
- Escalation
Methods of Billing Clients
Actual Fees charges plus per diem basis - Actual
time spent multiplied by the hourly rates agreed
upon
Flat or fixed fee basis - Pre-arranged all-in
consultancy fee for the entire engagement.
Maximum Fee Basis - Charging is on per diem basis
but total charges will not exceed a certain agreed
maximum amount

MAS Engagement Process Retainer Basis - Fixed pre-determined fee during a

1. MAS Engagement Negotiation - It involves designated period of time, like monthly basis.
preliminary discussions with the client to
determine whether the proposed
Out-of-Pocket Expenses - These are ordinary and
engagement should be pursued or not
necessary expenses incurred during the conduct of
- Understanding with the client should be
the engagement that are billable on top of basic
confirmed in writing through MAS
engagement fee
Engagement/Proposal Letter
2. Engagement Planning - Work Program  list
of series of tasks to be done in achieving the “Wise men don’t need advice. Fools won’t take it”
engagement objectives. It includes THANK YOU!
objectives, scope, approach, list of tasks,
staffing and schedules.
3. Engagement Execution –
Date gathering  the process of collecting
sufficient relevant information about the
engagement problem
Date analysis  the systematic and logical
evaluation of information in view of
developing and recommending a course of
action at the end
- Working papers are used to
document date gathering and
analysis process.
4. Presentation of Engagement results -
Engagement reports may be presented in
oral or written form
- Written Report: Long or Short Form
5. Implementation of Recommendation - The
advisor’s participation is limited on
providing technical advice and assistance to
the client
6. Post-engagement Follow-up - It is done to
make the necessary modifications or
corrections that may arise from difficulties
encountered due to misunderstanding of
instructions or other factors not foreseen
during the implementation stage