MAS concepts,

practices and
standards
John Michael Cedric N. Nalus
Certified Poging Accountant
 Public Private
Four Sectors
of Accounting
Profession
Govermen
Academe
t
 • Bookkeeping
P
U • Audit /Assurance
B
L • Tax Compliance
I
• Advisory / Consultancy
C
 Management Advisory
Services (MAS)
Sometimes referred to:
Management Services
Advisory Services
Business Advisory Services
Financial and Advisory Services
 Management Advisory
Services (MAS)
▪ refers to that practice of accounting
concerned with providing advice
and technical assistance to help
management improve the use of
resources in achieving
organizational goals
 Management Advisory
Services (MAS)
▪The Certified Public
Accountant who practices
MAS work is called advisor or
consultant.
Management Advisory
Services (MAS)

Manage
Advisor MAS ment
 Management Advisory
Services (MAS)
▪MAS principally serves the needs
of the Top Management
▪The job of an of an advisor is to
provide advice and technical
assistance to mangers
 Management Advisory
Services (MAS)
The practitioner must not
assume the role of the
manager in making decisions
 Analytical Approach and
Process
It involves combination of activities in
determining client objectives, fact-
finding, opportunity, problem
definition, evaluation of alternatives,
formulation and follow-up
 Analytical Approach and
Process
It also refers to the systematic
objective and rational method of
solving organizational problems
 Areas of MAS Practice

Traditional Consultancy Emerging Consultancy

Services Services
 Traditional Consultancy Services

Finance & Accounting Nonfinance &

Nonaccounting
 Traditional – Traditional –
Emerging
Finance & NonFinance &
Consultancy
Accounting NonAccounting
• Cost accounting • Creation of • Computer Risk
company policies Management
and control
 Moral Ethical
(Religious teachings) (Code of Ethics)

MAS
Standards
Legal Technical
(Accountancy Act of (MAS Practice
2004) Standards)
MAS Practice Standard 1
Personal Characteristics
 The practitioner must act
with integrity and objectivity
and be independent in mental
attitude
MAS Practice Standard 2
Competence
 It is the measure of
intelligence, expertise and
required skills to perform the
engagement
MAS Practice Standard 2
Competence
 A practitioner should reject
possible engagement that would
require a level of competence that
he does not possess
MAS Practice Standard 3
Due Care
Exercising utmost prudence in
the conduct of the engagement
 This does not guaranty
perfection
MAS Practice Standard 4
Client Benefit
 Before accepting an
engagement, a practitioner should
notify the client of any limitations
in achieving anticipated benefits
MAS Practice Standard 4
Client Benefit
 A practitioner should reject
possible engagement that would
require a level of competence that
he does not possess
MAS Practice Standard 5
Understanding with the Client
 Before accepting an
engagement, a practitioner should
inform the client of all significant
matters relating to engagement
MAS Practice Standard 5
Understanding with the Client
The following matters
should be well understood
by the client:
▪ Objectives ▪ Manner of communication
▪ Scope ▪ Timetable
▪ Approach ▪ Fee
▪ Roles
MAS Practice Standard 6
Planning, Supervision & Control
Planning  translation of
engagement objectives into a
structured set of activities and
events within a targeted time
schedule
MAS Practice Standard 6
Planning, Supervision & Control
Supervision  careful selection of
engagement team members and
proper guidance during the
conduct of the engagement
MAS Practice Standard 6
Planning, Supervision & Control
Control  measurement of
progress in meeting the
engagement plan and objectives
MAS Practice Standard 7
Sufficient Relevant Data
Sufficient relevant data must be
obtained, documented and
evaluated in order to develop
conclusions and recommendations
MAS Practice Standard 7
Sufficient Relevant Data
Sufficiency  quantity or amount
of information
Relevance  reliability or quality
of information
MAS Practice Standard 7
Sufficient Relevant Data
The practitioner must exercise
professional judgement in
determining the quality and
quantity of data required
MAS Practice Standard 8
Communication of results
All significant matters relating to
the result of engagement must be
communicated to the client either
by oral or written form
MAS Practice Standard 8
Communication of results
MAS report shall include
the following: ▪ Limitations
▪ Principal findings ▪ Reservations & other
▪ Conclusions qualifications
▪ Recommendations ▪ Other results of the
▪ Major Facts & engagement
Assumptions
MAS Practice Standard
MAS Practice Standards 1 to 3
 pertains to personal qualifications

MAS Practice Standards 4 to 8

 pertains to relationship with client and
attitude towards work
 Characteristics of a MAS
Engagement
▪ Service is for management
▪ Scope is broad
▪ Future orientation
▪ Non-recurring
▪ Highly qualified staff
▪ Diversity
MAS Engagement Process
1. MAS Engagement Negotiation
It involves preliminary discussions
with the client to determine
whether the proposed
engagement should be pursued or
not
MAS Engagement Process
1. MAS Engagement Negotiation
Understanding with the client
should be confirmed in writing
through MAS
Engagement/Proposal Letter
MAS Engagement Process
2. Engagement Planning
Work Program  list of series of
tasks to be done in achieving the
engagement objectives. It includes
objectives, scope, approach, list of
tasks, staffing and schedules.
MAS Engagement Process
3. Engagement Execution
Date gathering  the process of
collecting sufficient relevant
information about the
engagement problem
MAS Engagement Process
3. Engagement Execution
Date analysis  the systematic
and logical evaluation of
information in view of developing
and recommending a course of
action at the end
MAS Engagement Process
3. Engagement Execution
Working papers are used to
document date gathering and
analysis process.
MAS Engagement Process
4. Presentation of Engagement results
Engagement reports may be
presented in oral or written form

Written Report: Long or Short Form

MAS Engagement Process
5. Implementation of Recommendation
The advisor’s participation is limited
on providing technical advice and
assistance to the client
MAS Engagement Process
6. Post-engagement Follow-up
It is done to make the necessary
modifications or corrections that may arise
from difficulties encountered due to
misunderstanding of instructions or other
factors not foreseen during the
implementation stage
Consultancy Fees
Service of CPA is not free
It involves preliminary discussions
with the client to determine
whether the proposed
engagement should be pursued or
not
Consultancy Fees
Cost of consultancy shall consist of
the following:
▪ Salaries or billing rates
▪ Reimbursable Cost
▪ Escalation
Methods of Billing Clients
Actual Fees charges plus per diem basis
Actual time spent multiplied by
the hourly rates agreed upon
Methods of Billing Clients
Flat or fixed fee basis
Pre-arranged all-in consultancy fee
for the entire engagement.
Methods of Billing Clients
Maximum Fee Basis
Charging is on per diem basis but
total charges will not exceed a
certain agreed maximum amount
Methods of Billing Clients
Retainer Basis
Fixed pre-determined fee during a
designated period of time, like
monthly basis.
Methods of Billing Clients
Out-of-Pocket Expenses
These are ordinary and necessary
expenses incurred during the
conduct of the engagement that
are billable on top of basic
engagement fee
“Wise men don’t need
advice. Fools won’t
take it”

THANK YOU!