STAGES OF MANAGEMENT

CONSULTING ENGAGEMENT
- PART 1
 THE STAGES
I. NEGOTIATING THE ENGAGEMENT
II. ENGAGEMENT PLANNING
III. CONDUCTING A CONSULTING ASSIGNMENT
A. Problem identification and solution
B. Identification of suitable and accurate sources of information
C. Data analaysis and diagnosis
D. Solution development
E. Preparation and presentation of the report and recommended
solution
F. Implementation
G. Follow-up evaluation of the implementation solution
IV. EVALUATING THE ENGAGEMENT AND POST -ENGAGEMENT
FOLLOW-UP
I. NEGOTIATING THE ENGAGEMENT
It involves discussion of proposed professional consulting services
whereby the client decides whether or not he wishes to engage the
CPA and the CPA determines whether or not to accept that
assigment.

The necessary steps to assess this can be summarized as

follows:
1. Ascertain the real problem and what is required solution. This may
require a limited survey before a responsible conclusion can be made.
2. Identify the end product of the assignment, report of findings, suggested
systems, installation of the system or other objectives.
3. Agree on the role to be performed by the CPA. This may vary from
occasional consultation to full-time participation by one or more staff
members who perform significant portions,or all, of the work.
4. Agree on the basis for establishing and billing fees.
5. Confirm understanding in writing.
(AICPA MAS Guideline Series No. 1)
 PROPOSAL LETTER
A letter of proposal is a written communication between the CPA
and the client setting forth the terms and conditions of a proposed
consultancy work. It may prepared by either CPA or the client.

Purposes:
1. To minimize misunderstanding between the CPA and the client.
2. To assist in better administration of the engagement.

Generally includes:
1. The objectives and benefits of the engagement.
2. The scope of the work and the role of CPA.
3. The approach to the study.
4. The project organization.
5. Fees and billing arrangement.
6. Firm qualifications, where appropriate.
 1.) OBJECTIVES AND BENEFITS
Establish the benefits to be derived like improved customer
service, better management reporting, reduced costs,
improved operating efficiency and the like.
 2.) SCOPE OF THE WORK AND ROLE OF
THE CPA
The extent of the work to be done and the degree of
participation, joint or individual, of client and CPA
personnel should be clearly stated.
 3.) APPROACH TO THE STUDY
Understanding "How the work should be
undertaken".

Specific approaches covered in a letter or engagement program:

1. Data gathering methods like questionnaires and interview checklist.
2. Flowcharting and documentation.
3. Extent of use of mathematical methods such as linear programming and
simulation.
4. The order in which the various phases of the project are to be
undertaken.
 4.) PROJECT ORGANOZATION
Specify the assignment and organization of the CPA
and client personnel, the working relationships
between them.

The following specified:

1. Functions and responsibilities to be assigned to the project.
2. Number and types of personnel.
 5.) FEES AND BILLING ARRANGEMENTS
The fee estimate, frequency of interim and final
billing and the method of billing.

The following considered in setting the fee:

1. Nature of the MAS job
2. The job's of difficulty and complexity.
3. Qualifications of the staff required.
4. Time involved.
5. Technical importance of the service to the client.
II. ENGAGEMENT PLANNING
It begins when the consultant contacted by the potential
client and where detailed work plan is developed which
become blueprint of the remainder of the project after the
proposal is accepted.
 ENGAGEMENT PROGRAM OR WORK
PLAN
Contents :
1. The objectives and description of each task to be
accomplished.
2. A description of tangible output required at completion of
each task.
3. A list of manpower required.
4. A list of the personnel assigned.
5. The starting and completion dates.
6. Project costs.
Objectives:
Engagement program or work plan is an operational plan for
consulting a management service engagement. The engagement
programs.........
1. Provide a means for arranging, distributing and assigning responsibility
for various segements of an engagement.
2. Provide a means of control for determining whether all segments of the
engagement have in fact been completed.
3. Provide the framework for reporting progress of an engagement.
4. Facilitate time and efficiency control over personnel assigned to the
engagement.
5. Assist in an engagement review by a partner or supervisor.
6. Provide the basis for estimating fees.
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