Organizational Structure of the MAS Practice or Division

I. STAFF PYRAMID AND BILLING RATES

LEVE POSITIONS DESCRIPTION ACTIVITIES BILLING

L RATES
1 Partners,  The Top of the pyramid  Performing P10, 000 to
Principals,  Typically the most practice planning, P20,000 per
Directors experienced highly paid  Administering hour
Senior professionals and developing
Managers,  Normally responsible for practice,
Managers, the:  Consulting with
Supervisors - Successful completion of top-client
Senior engagements managers,
Consultants, - Dealing directly with  Approving
Seniors clients engagement
Associate - For selling work reports, and
Consultants,  Managing client
Staff crises

2 Senior  The next tier of the pyramid  Planning P 8,000 to P

Managers, is made up of them engagements 10, 000 per
Managers,  They perform week-to-week  Evaluating hour
Supervisors management of consultants
engagements and are  Supervising
responsible for: consultants
- Identifying new client  Writing proposals
prospects  Reviewing
- Assisting in the sales working papers
process and reports
 Consulting with
client managers 
 Serves as expert
in one or more
applied
knowledge areas
3 Senior  The third tier of the pyramid P5,000 to P
Consultants, includes these individuals 8,000 per
Seniors  They typically have 2 or 3 hour
years of consulting
experience
 They are capable of
supervising the daily work
of the younger staff.
 They possess the right
combination of experience
and dedication to complete
different projects with
limited supervision
 Normally, seniors are short
in supply in most firms
4 Associate  The final layer of the P2,000 to P
Consultants, pyramid consists of the 5,000 per
Staff young or new staff hour
 Depending upon the firm,
these individuals usually
have less than 2 years of
consulting experience and
may have been hired
directly out of graduate or
undergraduate school
 Some firms require prior
business experience, while
others prefer to train their
own personnel and hire
some undergraduate
students

II. PROBLEM AREAS IN RENDERING MAS BY AN INDEPENDENT ACCOUNTING FIRM

1. Questions as to the effect of the practice of MAS on the firm’s independence.

2. Development and maintenance of a high level of competence in MAS.
3. Questions of what fee to charge.
4. Question of AUDIT-MAS cooperation in obtaining engagements.
5. Question of regular communication between the MAS function and the rest of the firm.

III. FINANCIAL MANAGEMENT OF A MAS PRACTICE

A consulting practice is a business and, like all businesses, must have financing.

Financing can be provided by capital invested by you or the initial group of consultants or by funds
borrowed from banks and others

 This will be used to pay and fund for:

- Monthly operating expenses
- Accounts receivable that represent time billings to client.

 It is prudent to have working capital for at least three to four months’ expenses
- Care should be exercised to avoid a FINANCIAL TRAP where funds are received and spent
before the work is actually performed.