1.

The most important factor is selecting an engagement team is to assign consultants:

a. with prior experience in the client’s industry
b. with a combination of skills and experience in various business functional areas as well as in
different industries
c. with the appropriate skills, experience and types of thinking to deal with the clients
problems.
d. who are likely to employ different approaches to problem-solving such as highly imaginative
thinking or unusual skill in the interpretation and use of financial and statistical data.

2. The primary purpose of management advisory services is

a. to conduct special studies, preparation of recommendations, development of plans and
programs, and provision of advice and assistance in their implementation.
b. to provide services or to fulfill some social need
c. to improve the client’s use of its capabilities and resources to achieve the objectives of the
organization
d. to earn the best rate of return on resources entrusted to its care with safety of investment
being taken into account and consistent with the firm’s social and legal responsibilities.

3. Which of the following contains the best statement on how an accounting firm should apply the
concept of competence is serving clients?
a. If the firm is not reasonably competent to undertake a particular engagement, it should
employ a specialist on a temporary basis.
b. The firm should accept only those engagements which it is qualified to undertake and asking
personnel qualified to give effective service in solving the particular problem or problems
involved.
c. The firm should occasionally accept engagements outside the scope of its regular services
and then collaborate with outside specialist on such engagements
d. If the firm does not have men on its professional staff who are reasonably competent to
solve a client’s problem, it should ask the men to equip themselves for the task by study,
consultation or other means.

4. A CPA should reject an MAS engagement if

a. It would require him to make management decisions for an audit client
b. His recommendations are to be subject to review by the client.
c. He audits the financial statements of a subsidiary of the prospective client.
d. The proposed engagement is not accounting related.

5. Before entering a consulting practice, the prospective consultant should conduct market
research to identify opportunities in the market place. This will involve the following except
a. Study of the listing of actively practicing management consultants.
b. Survey of local CPA firms to determine which are offering consulting services
c. New release (one-full page) in the Philippine Daily Inquirer about the opening of the
consultancy firm.
d. Identification of new services that may provide a competitive edge.

6. This individual is normally responsible for the successful completion of engagements, dealing
directly with clients and for “selling” work or consultancy services.
 a. Senior managers
b. Senior consultants
c. Partners
d. Supervisors

7. Factors that must be considered when defining the target level of competence of management
consultants include the following except:
a. scope of practice area
b. client requirement
c. service variety
d. investment required

8. Consultants could trace most of their current engagements to the following sources except
a. speeches in professional and business organizations.
b. referrals from clients.
c. advertisement in TV, radio, and newspaper.
d. books written.

9. In determining market opportunities consultants must considered

a. The specific skills, talents and attributes and the market that is suited to these abilities.
b. Determine and make a list of services that one can truly offer with a confidence of
competence to perform.
c. Prepare a line-up of MAS personnel.
d. Seek out advisory engagements.

10. How can a consulting firm solve the problem of personnel deficiency
a. Employ additional consultant with adequate knowledge and skills
b. Determination of possible oversaturation of consultants in one’s specialty area
c. Establish quality contracts
d. Review the economic region in which the consulting firm draws or expects to draw, most of
its clients.

ANSWER KEY:
1. C 6. C
2. C 7. D
3. B 8. C
4. A 9. A
5. C 10. A
_______1. Some firms require prior business experience while others prefer to train their own
personnel and hire some undergraduate students.
_______2. A medium-sized business is more difficult in obtaining contracts.
_______3. The CPA obtains first-hand knowledge of the problems confronting management with
regards to the organization’s activities.
_______4. The use of consultants is generally much more expensive to the company than hiring full time
managers and employees to provide professional advisory services.
_______5. To be successful it is important to recognize the firm’s background and expertise so that the
scope of consulting practice can be well defined for proper communication to the potential
clients.
_______6. A consultant should conduct market research to identify opportunities in the marketplace. T
_______7. Management consultancy services are provided not only to big business enterprises but also
to medium size and small companies.
_______8. Senior consultants performs week-to-week management of the engagements.
_______9. Leading is a management function involves setting goals and objectives and creating specific
plans for completing them.
_______10. The numbers in the pyramid refer to the typical number of personnel at each level.

ANSWER KEY:
1. T
2. F
3. T
4. F
5. T
6. T
7. T
8. F
9. F
10. T