MAS Practice – Management Consultancy and Management Advisory Services

Questions:
1. It is the practice of helping organizations to improve their performance, primarily through the analysis of existing
organizational problems and development of plans for improvement.
A. Accounting
B. Management Consulting
C. Auditing
D. Total Quality Management

2. The following are activities involved in a consulting process, except

A. Gathering and finding facts
B. Implementation of the chosen action/alternative
C. Follow-up procedures
D. Preparation of financial statements

3. A management advisory services engagement generally involves the following activities in what order?
I. Post engagement follow-up.
II. Implementing the recommendation.
III. Conducting the engagement.
IV. Negotiating the engagement.
V. Preparing for and starting the engagement.
VI. Evaluating the engagement.
VII. Preparing and representing the report and recommendations.
A. VII, VI, V, IV, III, II and I.
B. IV, III, V, VI, II, VII, and I.
C. III, IV, V, VI, VII, I, and II.
D. IV, V, III, VII, II, VI, and I.

4. People who make information-based decision go through a series of fundamental steps in their decision-making
process.
i. Evaluate alternative. iv. Gather appropriate information.
ii. Identify constraints. v. Choose the most acceptable alternative.
iii. Set objectives. vi. Identify alternative.
The most desirable sequence in the above steps is:
A. iv, ii, iii, vi, i, v
B. ii, iii, iv, vi, i, v
C. iii, ii, iv, vi, i, v
D. ii, iii, vi, iv, I, v

5. A CPA should reject management advisory services engagement if

A. It would require him to make management decisions for an audit client.
B. The proposed engagement is not accounting related.
C. His recommendations are to be subjected to a review by the client.
D. He audits the financial statements of a subsidiary of the prospective client.

6. Which of the following is not a characteristic of management advisory services?

A. MAS is broad in concept.
B. MAS involves problem-solving affecting the future operations of the client.
C. Beneficiary of service is management.
D. MAS is repetitive as far as the same client is concerned.

7. The following characterize management advisory services, except

A. Involves decisions for the future.
B. Broader in scope and varied in nature.
C. Utilize more junior staff than senior members of the firm.
D. Relate to specific problems where expert help is required.

8. Which of the following is not a characteristic of management services?

A. Design and/or installation of accounting system.
B. Financial analysis for project feasibility studies.
C. Cost analysis of major investment decisions.
 D. None of the above.

9. Management services of certified public accountants cover all of the following, except
A. Project feasibility studies.
B. System design development and implementation.
C. Organizational development and planning.
D. Audit, tax, and legal services.

10. The activities in a management system’s control process can be grouped into four:
i. Measurement of actual performance.
ii. Deciding and implementing corrective action.
iii. Determining standards of performance.
iv. Comparing actual performance versus standards and analyzing results.
The above activities must be done in this sequence:
A. iv, iii, ii, i
B. iii, i iv, ii
C. i, iii iv, ii
D. iii, iv, i, ii

11. As a consultant, the CPA practitioner should

A. Exercise administrative control over the client’s staff to avoid unnecessary delays in implementation.
B. Encourage dependence of the client on the consultant’s staff so as to pinpoint clear responsibility in
implementing system.
C. Not take responsibility for making decisions and policy judgments in MAS engagements.
D. Conduct his engagement as if he is a member of the client’s organization.

12. Which of the following is not an area related to the performance of management services by independent
accounting firms?
A. Introducing new ideas, concepts and methods to management.
B. Improving existing policies, methods and procedures.
C. Performing special studies, preparing recommendations, and formulating plans and programs.
D. Performing management functions and making decisions.

13. Which of the following statements is not true?

A. In the rendition of MAS, independence must be observed so as to maintain the essential requisite of
impartiality and objectivity.
B. All provisions of the code of professional ethics are applicable in the practice of MAS except those rules
related to the expression of an opinion on financial statements.
C. MAS serves only in the areas of accounting and finance.
D. Before accepting an engagement, a practitioner should notify the client of any reservation he has
regarding anticipated benefits.

14. Which of the following statements is/are correct?

A. MAS principally involves the consultative services to management in his decision making.
B. MAS consultation, unlike MAS engagement, generally involves advise of information by a CPA in which
an analytical process is applied.
C. Because the CPA must be independent, he must not allow the client to participate in any phase of his
engagement.
D. All of the choices are correct
E. None of the choices are correct

15. The following statements refer to competence of CPAs in management advisory services, except
A. In concept, it refers to the technical qualification of the practitioner and his ability to supervise and
evaluate the quality of work of his staff assigned to the engagement to be responsible for the successful
completion of the project.
B. It is acquired by education, self-study, attendance to professional development courses, actual
experience in MS work, and research.
C. It is the ability to identify client’s needs, use analytical approach and process, apply technical knowledge,
communicate recommendations and assist in implementation.
D. It must be retained in the rendition of MAS work and it can be impaired if the CPA performs decision-
making for the client or acts as employee of the client.
16. Which of the following statements is true?
A. Adequate training and experience in both analytical approach and process in the particular undertaking
are requisites for the CPA to be involved in a management service engagement.
B. A CPA with MBA and PhD degrees is automatically qualified to render management services.
C. Competence as a standard in the rendition of management services by a CPA may be equated to having
scholarly preparation to include the usual baccalaureate degree, an MBA and other post-graduate
studies.
D. A certified public accountant by virtue of having the necessary academic preparation and by hurdling the
licensure examinations required to have a CPA license can readily render management services to the
public.

17. Which of the following will not impair the independence of a CPA in the rendition of management services?
A. The CPA performs decision-making services for his client.
B. The CPA performs services wherein he is in effect acting as an employee of the client.
C. The CPA losses his objectivity and acts in a manner as if he is advocating for the interest of his client.
D. The CPA does not extend his services beyond the presentation of recommendations of giving of advice.

18. The Revised Accountancy Law incorporates the Code of Professional Ethics for CPAs. The provision of
management advisory services is among the areas for public accounting. It is, however, not exclusive to CPAs.
Considering these premises, which of the following statements is applicable?
A. Management advisory services as a field of practice is considered as an integral part of public accounting
thus, the Code of Professional Ethics for CPAs covers management advisory services.
B. CPAs in the practice of audit and management consulting services may advertise and charge contingent
fees.
C. The practice of management advisory services should not be extended to existing audit clients since this
will adversely affect the CPAs independence.
D. CPAs in the practice of management advisory services are not bound by the Board of Accountancy Law
but are bound by the said law in the practice of audit

19. Which of the following statements is false?

A. CPAs provide management services to go around the ethical constraints as mandated by the
Accountancy Act.
B. Businesses hire management consultants to help define specific problems and develop solutions.
C. Included in the practice of consulting is the provision of confidential service in which the identity of the
client is concealed.
D. CPAs performing management services may be considered to be in the practice of management
consulting.

20. Which of the following statements is not acceptable?

A. A CPA represents three major players in the industry in rationalizing the industry’s incentive before the
government public hearings.
B. A CPA shares with a new and substantial client information regarding another client belonging to the
same industry.
C. A CPA provides consulting services to an existing audit client.
D. A CPA offers and provides consulting services to two major competing clients.

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