King Mark Lester B.

Sardido

1. What are the two broad areas of Management Advisory Services. Discuss.

A. Areas which are normally related to the accounting and finance functions.
- Requires professional training of CPAs, Especially in Finance and Control
1. Preparation of accounting system to be used and procedure manual
2. Enhancement of management oriented accounting and reporting systems
3. Assessment of the appropriateness and utilization of developed equipment
4. Setting up budgetary controls
5. Studies that reduces cost
B. Areas which are not normally related to the accounting and finance functions.
- Practitioners’ training in professions other than that of CPAs. Among are these areas:
1. General Management Consultation
a. Management or Operations audit
b. Measurement of operating performance
c. Merger and Acquisitions study
d. Creation of compensation programs
e. Review of pension plans
f. Industry potential on special studies
g. Long range planning
2. Project Feasibility Study
3. Organization and Personnel
a. Existing organizational structure review
b. Manuals for organization and administration preparation
c. Evaluation of jobs and administration of salary
d. Personnel rating programs development
e. Cost determination of alternatives
f. Retirement plans study
g. Office cost reduction systems study
4. Industrial Engineering
a. Production Planning
b. Plant layout study
c. Inventory Management
d. Material control systems
e. Preventive maintenance systems
f. Work standards development
g. Purchasing management
5. Marketing
6. Operations Research
2. In performing management advisory services, a practitioner must act with integrity and objectivity
and be independent in mental attitude. What is meant by integrity, objectivity, and independence in
mental attitude?

Integrity of a practitioner refers to being honest and confident with the output. He/she should not be
move by any intimidation and should always keep it mind service to public trust rather than personal
interest.

Objectivity means a practitioner should be unbiased and use factual or gathered data information
during the course of consultancy as a guide to give performance with quality in the service provided.

Independence in mental attitude means a practitioner must be fair, intellectually honest and free from
conflict of interest not only to management and owners of a business but also to creditors.

3. What is the purpose of the engagement letter?

The purposes of an engagement letter are the following:

 to set expectations between the client and the consultant.
 to formally engage the client and ensure that both of you understand and are working
toward the same objective.
 to refine goals and any changes that need to be made;
 to ensure that the client’s objectives are being met with work plan; and
 to maintain firm’s high-quality standards.