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Basic Considerations in Mas Practice Reviewer

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30 views3 pages

Basic Considerations in Mas Practice Reviewer

Uploaded by

rochellsubaan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MANAGEMENT ADVISORY SERVICES MA. CRISTINA P.

OBESO, CPA, MBA

BASIC CONSIDERATIONS IN MAS PRACTICE

MANAGEMENT ADVISORY SERVICES (MAS) - Is the function of providing professional advisory


(consultative) services primary purpose of which Is to Improve the client's use of its
capabilities and resources to achieve the objective of the organization

MANAGEMENT ADVISORY SERVICES can relate to areas such as:


1. The management functions of analysis, planning, organizing and controlling
2. The introduction of new ideas, concepts and methods of management
3. The improvement of policies, procedures, systems, method and organizational relationship
4. The application and use of managerial accounting control system, data processing and other
mathematical techniques and method
5. The conduct of special studies, preparation and recommendation, development of plans and
programs, and the provision of advises and technical assistance in their implementation

THE BROAD CATEGORIES OF MAS (PICPA MAS COMMITTEE)


1. AREAS NORMALLY RELATED TO ACCOUNTING AND FINANCE FUNCTIONS
(Assumed to be within the immediate competence of CPAs) such as: Preparation of Accounting
System, Establishment of budgetary controls, Cost Accounting and Financial Management
2. AREAS NOT NORMALLY RELATED TO ACCOUNTING AND FINANCE FUNCTIONS
(Assumed to be not within the competence of CPAs) such as Marketing, Operations
Research, Organization and Personnel

MAS CLASSIFICATIONS BASED ON REQUIRED EXPERTISE


1. Usual Services
2. Somewhat Specialized Services
3. Highly Specialized Services

CHARACTERISTICS OF MAS
1. Services rendered are for management
2. It involves problem solving
3. MAS relates to the future
4. It is broad in scope
5. It involves varied assignments
6. Engagements are usually non-recurring
7. Engagements require highly qualified staff
8. Human relations playa vital role in each engagement

ROLE OF CONSULTANTS AND CLIENTS IN MAS ENGAGEMENTS

The role of an independent accounting (or consultant) in performing Management Advisory


Services is to provide advice and technical assistance and should provide for client participation in the
analytical approach and process. Specifying this as the proper role recognizes both the appropriate
place of management advisory services and the realities of practice. This is the only basis on which
responsible management should permit it to be done.

ANALYTICAL APPROACH AND PROCESS


Refers to the systematic, objective and rational method of solving business problems

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Steps in the Analytical Approach and Process
1. Ascertaining the pertinent facts and circumstances
2. Seeking and identifying the objectives
3. Defining the problem or opportunity for improvement
4. Evaluation and determining possible solutions
5. Presenting findings and recommendations
6. Planning and scheduling actions to achieve the desired results
7. Advising and providing technical assistance In implementation

STAGES OF MANAGEMENT CONSULTING ENGAGEMENT


1. Negotiating the engagement
2. Preparing for and planning the engagement
3. Conducting the engagement
4. Preparing and presenting reports and recommendations
5. Implementing and installing the recommendation
6. Evaluating the engagement
7. Post engagement follow-up

Analysis stage — steps 1, 2 and 3


Design stage — steps 4 and 5
Implementation stage — steps 6 and 7
Full scope engagements
Special engagements

MAS PRACTICE STANDARDS


1. PERSONAL CHARACTERISTICS
In performing management advisory services, a practitioner must act with integrity
and objectivity and be independent in mental attitude
2. COMPETENCE
Engagements are to be performed by practitioners having competence in the analytical
approach and process and in the technical subject under consideration
3. DUE CARE
Due professional care is to be exercised in the performance of a management
advisory services engagement
4. CLIENT BENEFIT
Before accepting an engagement, a practitioner is to notify the client of any
reservations he has regarding anticipated benefits
5. UNDERSTANDING WITH THE CLIENT
Before undertaking an engagement, a practitioner is to inform his client of all
significant matters related to the engagement
6. PLANNING, SUPERVISING AND CONTROL
Engagements are to be adequately planned, supervised and controlled
7. SUFFICIENT RELEVAN DATA
Sufficient relevant data is to be obtained, documented and evaluated in developing
conclusions and recommendations

8. COMMUNICATION OF RESULTS
All significant matters relating to the results of the engagement are to be communicated

MAS PROPOSAL LETTER — is a formal written communication by the advisor to a prospective client for
MAS ENGAGEMENT PROGRAM - is a written detailed plan of work to be performed In carrying
out the MAS engagement. It atnormally Includes: the objectives and description of the work
to be performed, output at the end of the particular work, list of required personnel and
estimated date of start and completion
FEE ARRANGEMENTS
1. Per diem 2. Bracket quotation 3. Lump sum or fixed amount 4. Retainer

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MANAGEMENT ACCOUNTING
The branch of accounting which is primarily concerned with providing information that will be
useful in making decisions about the operation of business

PURPOSE OF MANAGEMENT ACCOUNTING


1. Planning and controlling routine operations
2. Non-routine decision, policy making and long-range planning
3. Inventory valuation and income determination
DISTINCTION BEMEEN MANAGEMENT ACCOUNTING AND FINANCIAL ACCOUNTING
MANAGEMENT ACCOUNTING
1. Provide information for internal users
2. Generates special purpose reports and statements
3. Reports on past or routine future plans

4. Has no externally imposed standardS


5. Allows subjective data
FINANCIALACCOUNTING
1. Provides information to external users
2. Generates general purpose financial statements
3. Reports on past activities
4. Must conform to externally imposed standards
5. Emphasizes on objective data
DISTINCTION BETWEEN CONTROLLERSHIP AND TREASURERSHIP

CONTROLLERSHIP TREASURERSHIP
Planning and control Provision of capital
1
2 Reporting interpreting Investor relations
3 Evaluating and consulting Short-term financing
4 Tax administration Banking and custod
5 Government reporting Credit and collection
6 Protection of assets Investments
7 Economic appraisal Insurance

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