In most cases, businesses hire management consultants to implement recommendations.

True
Consultancy usually involves the identification and assessment of a problem or the analysis of a specific area
of an organisation, the reporting of findings and the formulation of recommendations for improvement. True
Consultancies vary in size, specialism and focus. T
A type of ma nagement advisory services that is not directly related to the accounting and finance functions is
long range planning. F
The Code of Professional Ethics that specifically deals with the expression of an opinion does not apply in
MAS practice. F
It is unethical for a professional accountant to accept a MAS engagement for a company that is not his audit
client. F
Consultants give advice and solve complex issues. T
The primary purpose of MAS is to improve the client’s use of its capabilities and resources to achieve the
objectives of the firm.T
Management consultants are hired by decision makers for advise on, among others, strategy and
organisational matters. T
Competence must be retained in the rendition of MAS work and it can be impaired if the practitioner performs
decision making for the client or acts as employee of the client. F
In MAS consultations, the practitioner should be careful to avoid misleading the client into believing that he
guarantees the benefits the client seeks. T
MAS is repetitive as far as the same client is concerned. F
The practice of MAS is also governed by the external reporting standards in the accounting profession.F
An area of MAS which is directly related to the accounting and finance functions is project feasibility study. F\
The range of work in consultancy is extremely varied and consultants can be found in almost any sector. T
Not all significant matters relating to the results of the engagement need to be communicated to the client. F
An MAS practitioner is allowed to secure the assistance of other qualified professional in order to complete the
engagement. T
Engagements are usually recurring is one of the distinguishing characteristics of MAS. F
Management Consultancy is regulated by law, such that an individual must pass a government licensure
examination first before he could practice the same. F
Management services include audit, tax and legal services. F
Management consulting, often referred to as business consulting, is defined as “advisory and/or
implementation services to the (senior) management of organisations with the aim of improving the
effectiveness of their business strategy, organisational performance and operational processes”.T
Management consulting is the practice of helping organizations to improve their performance. T
Personal judgement should be exercised by the MAS practitioner in determining the nature and quality of
information. F
In a consulting service, the work is generally performed only for the use and benefit of the client. T
Accountants are concerned with evaluating only the financial aspects of a project. F
Especially under time pressure, it is not so necessary that sufficient relevant data has to be obtained,
documented and evaluated in developing conclusions and recommendations. F
Consultants are commonly called in for business improvement, change of management, information
technology and long-term planning projects. T
Should a consultant feels that he cannot effectively handle the proposed engagement because of limitations in
skills, competence and economic requirements, the consultant may refer this to another practitioner whom he
thinks can effectively do the job. F
Included in the practice of consulting is the provision of confidential service in which the identity of the client is
concealed. T
As an advisory expert, the practitioner should take responsibility for making policy and management decisions
in the engagement he has performed. T

These statements relate to MAS practice standards:

1. A practitioner is to notify the client of any reservation he has regarding anticipated benefits.
2. Throughout the engagement, there ought to be a systematic critical review of accomplishments and work
should be done within the framework of the code of ethics and other professional standards.
3. During the engagement, should there be a significant change between cost and anticipated benefits, the
client should be informed.
4. Before the engagement, the practitioner must make arrangements with, and inform the client on significant
matters related to engagement, in writing.
Of these statements, which pertain to the practice standard on client benefit? Statement 1

An MAS engagement , as opposed to an MAS consultation, generally involves advice or information that is
based upon

a. An analytical approach and process

b. An incidental effort devoted to a combination of activities.
c. Existing personal knowledge about the client.
d. The ability to implement management’s recommendations.

Which of the following statements is correct?

a. Covert symptoms are easy to perceive, call attention to, and/or remedy
b. Overt symptoms need a more detailed study and a logical extension of the CPA’s services
c. None of the above
d. Covert symptoms may simply be covered in the CPA’s usual letter to management prepared at the
completion of audit

Which of the following statements is false?

a. a.CPAs performing management services may be considered to be in the practice of
management consulting.
 b. b.Included in the practice of consulting is the provision of confidential service in which the identity of the
client is concealed.
c. c.Business firms hire management consultants to help define specific problems and develop
solutions.
d. d.CPAs provide management services to go around the ethical constraints as mandated by the
Accountancy Act

In Advisory services, the practitioner’s function is to

a. Put an action plan into effect
b. Provide services related to specific client transaction, generally with a third party
c. Provide counsel in a short time frame, based mostly, if not entirely, on existing personal knowledge
about the client, the circumstances, the technical matters involved, client representations, and mutual
intent of the parties
d. None of the above

Management consulting
a. Is not limited to CPAs
b. May be practiced by anybody since it is not limited to CPAs
c. None of the above
d. Is limited to CPAs

Which of the following statements is correct?

a. A CPA-MAS practitioner need not be concerned with independence in his clients.
d. Documentation is not essential in MAS as it is in an audit engagement.
b. MAS by independent CPAs may involve decision making for the client.
c. To maintain his independence, a CPA limits its services to that of recommending and designing an
accounting system but leave the actual implementation and installation fo the client.

The following statements relate to MAS practice standards.

1. A practitioner is to notify the client of any reservations he has regarding anticipated benefits.
2. During the engagement, should there be significant changes between the cost and anticipated benefits, the
client should be informed.
3. Throughout the engagement, there ought to be a systematic critical review of accomplishments and work
should be done within the framework of the Code of Ethics and other professional standards.
4. Before the engagement, the practitioner must make arrangements with, and inform the client on significant
matters related to the engagement.
Which of the above statements pertain(s) to the MAS practice standard on Client benefit? Statement 1

Consulting services differ fundamentally from the CPA’s function of attesting to the assertions of other parties.
In a consulting service,
 a. The client develops the findings, conclusions, and recommendations
b. None of the above
c. The practitioner expresses a conclusion about the reliability of a written assertion that is the
responsibility of another party, the assertor.
d. The work is generally performed only for the use and benefit of the client

Which of the following statements is incorrect?

a. A consultant is hired because generally he is considered independent, objective and detached to the
problems faced by the organizations.
b. An experienced management consultant possesses special knowledge, skills and a variety of personal
attributes that make him the most desirable candidate to undertake management consulting
engagement involving his area of expertise.
c. The use of consultants is generally much more expensive to the company than hiring full time new
managers and employees to provide professional advisory services.
d. A consultant is considered a catalyst for change that can assist management in the administration of
the business entity.
Nixon is part of a private company (JN Inc.) that is evaluating a potential acquisition of another private
company (NA Corp.). Both JN Inc. and NA Corp. are publicly-listed companies. A significant portion of Nixon’s
personal investment portfolio is composed of NA Corp.’s shares of stock, which Nixon did not disclose. Nixon
is in violation of which ethical standard?
a. Credibility
b. Integrity
c. Confidentiality
d. Competence

It consists of that form of management advisory or consulting service in which an analytical approach and
process is applied in a study or project.
a. Consulting
b. Technicality
c. Engagement
d. Process Approach

Which of the following statements is True?

a. A certified public accountant by virtue of having the necessary academic preparation and by hurdling
the licensure examinations required to have a CPA license can readily render management services to
the public.
b. A practitioner with MBA and PhD degrees is automatically qualified to render management services.
c. Competence as a standard in the rendition of management services by a practitioner may be equated
to having excellent scholarly preparation to include the usual baccalaureate degree, an MBA, and other
post graduate studies.
d. Adequate training and experience in both the analytical approach and process in the particular
undertaking are requisites for the practitioner to be involved in a management service engagement.
In performing MAS engagements, CPAs should not take any positions that might
a. Constitute advice and assistance.
b. Provide technical assistance in implementation.
c. Impair their objectivity.
d. Result in new organizational policies and procedures.
The ability of the consultant to focus and direct the individuals in an organization in a way that brings the whole
organization benefits.
a. Ability to develop selling strategies
b. Ability to demonstrate leadership
c. Ability to build rapport and trust with the client.
d. Ability to work effectively as a team member

Which of the following is not an analytical approach in MAS engagement?

a. Ascertaining the pertinent facts and circumstances.
b. Presenting findings and recommendations.
c. Counselling management in planning, operating, and controlling functions.
a. b. Defining the problem or opportunity for improvements.

The primary purpose of management advisory services is

b. To help the client maximize its resources
c. To help the client identify its problems
d. To achieve the objectives of the firm
e. None of the above

Which of the following types of management services is normally related to accounting and finance?
a. Costs determination of alternatives in collective bargaining agreements.
b. Marketing forecasts.
c. Job evaluation and salary administration.
d. Management audit.

Which of the following statements is false?

a. It is predicted that a consultant’s orientation will be towards being an insight-provider, creator and
sharer of information.
b. New developments and transformations could result to management consulting becoming more
specialized.
c. Because of the more stringent and technical qualifications required in management
d. As a consultant grows in number, they tend to develop more sophisticated means of marketing their
services.
These involves a series related to mergers, acquisitions, divestiture, joint ventures, spin-off and strategic
alliance.
a. Compliance risk management
e. Financial risk audit
b. Strategic risk management
c. Due diligence audit

The following are among the ground rules that a consultant should observe in providing support for internal
arguments in a client except
a. Provide the client manager information and insights that will strengthen hisposition against his
adversaries in the organization.
b. Build rapport which the client about the strengths and weaknesses of his or her argument.
c. Introduce and explore options which reconcile different positions in a win-win way.
d. Be sensitive to who is supporting different position in the organization.

The technical standards that apply to MAS engagements require the MAS practitioner to do all of the following
except
a. Obtain an understanding concerning the nature, scope, and limitations of an MAS engagements to be
performed.
b. Give support for and clearly identify as estimates any quantifiable results that are based on estimates.
c. Accepting responsibility for the client’s action.
d. Take no position which might impair the practitioner’s objectivity

The application of analytic approach and process in consultancy engagements involves the following, except
a. Identification and analysis of alternative solutions
b. Problem definition
c. Non-selection of the most desirable alternative
d. Implementation of the chosen solution
It is an engagement/consulting service where the redesign of a process with an emphasis on finding creative
ways to accomplish an objective.
a. Enterprise resource planning
b. Business process outsourcing
c. Marketing research
d. Business Process reengineering

A personal attribute of a consultant refers to his/her ability to view situations in perspective and to take action
needed on a calm and controlled basis without being diverted from a sound, logical and ethical course by
outside pressure.
a. Psychological maturity
b. Judgment
c. Courage
d. Physiological equilibrium
It is the practice of helping organizations to improve their performance, primarily through the analysis of
existing organizational problems and development of plans for improvement.
a. Auditing
b. Accounting
c. Management Consulting
d. Total Quality Management
Confidentiality of information about a client’s affairs is one of the ethical principles that should always be
observed by a management consultant. The following situations allow the consultant to disclose information
otherwise considered confidential except
a. when disclosure is authorized by the client.
b. when disclosure is necessary to protect the professional interest in legal proceedings. to produce
documents to give evidence in the course of legal proceedings.
c. to produce documents to give evidence in the course of legal proceedings.
d. to respond to an inquiry of shareholders and creditors of the entity.

Management advisory services may be defined as

a. None of the above
b. The art of recording, classifying, and summarizing in a significant manner and in terms of money,
transactions and events which are in part at least of a financial character and interpreting the results
thereof
c. The process of identifying, measuring, and communicating economic information to permit informed
judgment and decision by users of information
d. The function of providing quantitative information, primarily financial in nature, about economic entities,
that is intended to be useful in making economic decisions
This role is the lowest rank in a consultancy company, which is usually the entry-level role for those who aspire
to work for a consulting firm.
a. Senior Analyst
b. Partner
c. Manager
d. Junior Analyst
The MAS engagement that involves providing assistance to management in relation to planning, controlling
and decision making is
a. Taxation
b. Management Consultancy
c. Financial Accounting
d. Financial Management

Due professional care in the performance of a profession applies to

a. Tax practice
b. MAS only
c. Auditing only
d. Both Auditing and MAS
It is the practice of helping organization to improve the performance, primarily through the analysis of existing
organizational problems and development of plans for improvement.
a. Kaizen
b. Total Quality Management
c. Management Consultancy
d. None of the above

Some reasons for hiring management consultants are as follows, except:

a. None of the above
b. To provide confidential service in which the identity of the client is concealed
c. To render an independent opinion
d. To provide specialized skills and experience

It refers to the ability of the practitioner to maintain his role as an objective adviser or consultant without making
any attempt to make decisions for management.
a. Objectivity
b. Competence
c. Independence in mental attitude
d. Integrity
Which of the following is not a qualification of a CPA in MAS practice?
a. Auditor of the client.
b. Professional independence, objectivity and integrity.
c. Professional and technical competence.
d. Analytical experience in problem solving.
To attain the highest standards of professionalism, highest levels of performance and meet public interest
requirement, a CPA who provides management consultancy services should meet the following basic
requirements except:
a. Top of the line and world facilities
b. Confidence
c. Professionalism
d. Credibility

The practitioner who undertakes the performance of a MAS engagement should bear in mind that the results
should
b. Be communicated in quantitative terms.
d. Not be explicitly or implicitly guaranteed.
a. Increase the client’s earning capabilities.
c. Not be set forth as quantitative estimates.

The following are among the ground rules that a consultant should observe in providing support for internal
arguments in a client except
 a. Build rapport with the client about the strengths and weaknesses of his argument
b. Introduce and explore options which reconcile different positions in a win-win way
c. Be sensitive to who is supporting different positions in the organization
d. Provide the client manager information and insights that will strengthen his position against his
adversaries in the organization

This engagement involves the review of compliance with regulatory requirements and ethical conduct
standards.
a. Compliance risk management.
b. Strategic risk management.
c. Financial risk management.
d. Operational and systems risk management.

Which of the following statements is false?

a. As consultants grow in number, they tend to develop more sophisticated means of marketing their
services.
b. Because of the more stringent and technical qualifications required in management consulting, more
not-so-bright graduates of accounting, management and business schools will be attracted to careers in
this area.
c. It is predicted that a consultant’s orientation will be towards being an insight-provider, creator and
sharer of information.
d. New developments and transformations could result to management consulting becoming more
specialized.

Management services cover all of the following except

a. Organizational development
b. Audit, tax and legal services
c. Project feasibility study and planning
d. System design, development and implementation

Which of the following statements is incorrect?

a. A consultant is considered a catalyst for change that can assist management in the administration of
the business entity.
b. The use of consultants is generally much more expensive to the company than hiring full time new
managers and employees to provide professional advisory services.
c. A consultant is hired because generally he is considered independent, objective and detached to the
problems faced by the organization.
d. An experienced management consultant possesses special knowledge, skills and a variety of personal
attributes that make him the most desirable candidate to undertake management consulting
engagement involving his area of expertise.

Factors that must be considered when defining the target level of competence of management consultants
include the following, except
a. Client requirement
 b. Investment required
c. Scope of practice area
d. Service variety

Which of the following statements is not true?

a. MAS serves only in the areas of accounting and finance.
b. In the rendition of MAS, independence must be observed so as to maintain the essential requisites of
impartiality and objectivity.
c. All provisions of the code of professional ethics are applicable to the practice of MAS except those rules
related to the expression of an opinion on financial statements.
d. Before accepting an engagement, a practitioner should notify the client of any reservations he has
regarding anticipated benefits.

Generally, the emergence and growth of management consultancy may be attributed to the following factors,
except
a. Need for adequate and timely information in management decision-making
b. Growth in size and complexity of business firms
c. The development of techniques for the solution of management problems and the businessmen’s
awareness of how to solve such problems
d. Complexity in managing and conducting a business

Which of the following relate(s) to management advisory services?

a. Financial analysis for project feasibility studies
b. Design and/or installation of accounting systems
c. Cost analysis of major investment decisions
d. All of these choices

The actual output of a consulting engagement centers on providing the business organization with the following
except:
a. Support for contesting tax assessments by the BIR
b. Support in acquiring a critical resource
c. Support for internal argument
d. Valuable information

Which of the following statement is false?

a. CPAs have historically been business consultants to their clients.
b. Management consultancy services are provided not only to big business enterprises but also to
medium-size and small companies.
c. Management consultants are licensed and regulated by laws.
d. The primary purpose of management consultancy is to improve the firm’s use of its capabilities and
resources to achieve its objectives.
Which of the following statement is true?
a. If a firm is not reasonably competent to undertake a specific management services management, it
should employ a specialist to undertake the job on temporary basis.
b. A person who wants to become a consultant, must first pass the government board examinations given
for the purpose.
c. The CPA’s competence, coupled with his familiarity with the client’s finance and control systems,
business problems, and personnel, places him in logical position to perform management services for
that client.
d. It is desirable but not necessary that in performing management advisory services, a practitioner must
act with integrity and objectivity, and be independent in mental attitude.

MAS engagements, as opposed to a MAS consultation generally involves advice or information given by a
CPA that is based upon
a. Existing personal knowledge about the client.
b. The CPA’s ability to implement managements recommendation.
c. An analytical approach and process.
d. An incidental effort devoted to a combination of activities.

These are professional services that employ the practitioner’s technical skills, education, observations,
experience, and knowledge of the accounting process.
a. Consulting services
b. Analytical process
c. Technical services
d. None of the above

The following skills are necessary in carrying out management consultancy services, except
a. Communication
b. Ability to work well with others
c. Logical reasoning
d. None of these choices

As a consultant, the MAS practitioner should

a. Conduct his engagement as if he is a member of the client’s organization.
b. Encourage dependence of client on the consultant’s staff so as to pinpoint clear responsibility in
implementing systems.
c. Not take responsibility for making decisions and policy judgements.
d. Exercise administrative control over the client’s staff to avoid unnecessary delays in implementation.

The definition of “Consulting Services” includes

a. Services subject to the AICPA technical standards
b. Engagements specifically perform tax return preparation and tax planning
 c. None of the above
d. Situations involving written reports

A person who is qualified by education, experience, technical ability and temperament to advise or assist
businessmen on a professional basis in identifying, defining and solving specific management problems
involving the organization, planning, direction, control and operation of a firm is called a
a. Management internal auditor
b. Management consultant
c. Management advisor
d. None of the above

To attain the highest standards of professionalism, highest levels of performance and meet public interest
requirement, a person or firm who provides management consultancy services should meet the following basic
requirements, except
a. Top-of-the-line and world-class facilities
b. Professionalism
c. Credibility
d. Confidence

Generally, the emergence and growth of management consultancy may be attributed to the following factors,
except
a. Complexity in managing and conducting a business
b. Growth in size and complexity of business firms
c. None of the above
d. Need for adequate and timely information in management decision-making

As a consultant, the CPA practitioner should

a. Not take responsibility for making decisions and policy judgments in MAS engagements.
b. Conduct his engagement as if he is a member of the client’s organization.
c. Encourage dependence of client on the consultant’s staff so as to pinpoint clear responsibility in
implementing systems.
d. Exercise administrative control over the client’s staff to avoid unnecessary delays in implementation.

A consultant’s ability to identify what information is needed in a particular situation is an example of

a. Interpersonal skills
b. Project management skills
c. Rapport-building skills
d. Analysis skills

Which of the following is not an area related to the performance of management services by independent
accounting firms?
a. Introducing new ideas, concepts and methods to management
 b. Performing special studies, preparing recommendations, and formulating plans and programs
c. Businesses hire management consultants to help define specific problems and develop solutions.
d. Performing management functions and making decision

It is the analytical approach and process applied in Consulting services

a. Consulting process
b. None of the above
c. Consulting services
d. Problem solving

It is a career structure in consulting firm where it needs to have 5-10 years of consulting experience.
a. Senior consultants/Managers
b. Business Development Managers
c. Analysts
d. Consultants

Most definitions of consultancy would include such services related to the following except
a. Corporate Strategy
b. Information Technology
c. Systems and Operations Management
d. Legal Advisory

This principle imposes the obligation on management accountants/consultants to be impartial, intellectually

honest, and free of conflicts of interests.
a. Integrity
b. Objectivity
c. Maturity
d. Independence in mental attitude

A personal attribute of a consultant refers to his/her ability to view situations in perspective and to take action
needed on a calm and controlled basis without being diverted from a sound, logical and ethical course by
outside pressure.
a. Judgment
b. Psychological maturity
c. Courage
d. Physiological equilibrium

Which of the following statements is correct?

a. Implementation services involve putting intooperation a plan or recommendation the practitioner has
accepted.
 b. The understanding with the client may limit the practitioner’s effort with regards to gathering relevant
data.
c. The performance of consulting services for an attest client does not in itself impair independence.
d. In a consulting service, the client develops the findings, conclusions and recommendations presented.

These enterprises are involved in varied business endeavors such as merchandising, manufacturing, financial
services, and are potential consultancy clients.
a. Not-for-profit nongovernment organizations.
b. Professional associations
c. Government agencies
d. Privately owned business firms

Which of the following is not classifiable as a management advisory service by CPAs ?

a. public relations work
b. lease or buy analysis
c. information systems
d. annual financial planning and budgeting.

An MS client asked for internal control evaluation. During evaluation, the practitioner suggests that certain
changes are necessary in handling some accounts. The client agrees. However, the client requests that his
former consultant supervise the installation. The practitioner knows that such former consultant lacks sufficient
experience to provide the necessary technical direction and supervision. In this case, the practitioner should
a. Decline the engagement if the client insists that the former consultant supervise the installation and the
necessary technical competence would not be provided even through other means.
b. Prevent the former consultant to supervise the installation. c. Tell the client everything he knows about
the former consultant so he could be prevented from supervising the installation.
c. Prevent the former consultant to supervise the installation.
d. Encourage the former consultant to attend a seminar/workshop to learn the basics of engagement
supervision.

Examples of product services are the following, except:

a. Sale and implementation of computer software
b. Sale and installation of systems development methodologies
c. None of the above
d. Sale and delivery of packaged training programs
QUIZZZES
Which of the following is true?
a. A professional accountant should not maintain confidentiality of information disclosed by a prospective
client.
b. A professional accountant is not required to disclose information even if disclosure is permitted by law
or authorized by the client.
c. A professional accountant should not maintain confidentiality even in a social environment.
d. The need to comply with the principle of confidentiality continues even after the end of relationships
between a professional accountant and his client.

One of the following is not a ground rule that the consultant should observe in providing support for internal
arguments in a client:
a. Find and explore options that will reconcile different positions in a positive way.
b. Provide the client manager information and insights that will strengthen his position against his
adversaries in the organization.
c. Build rapport with the client about the strengths and weaknesses of his/her arguments.
d. Be sensitive to who is supporting different positions in the organization.

Which of the following is not a qualification of a CPA in MAS practice?

a. Professional independence, objectivity, and integrity
b. Analytical experience in problem-solving
c. Familiarity with the client’s financial accounting and internal control systems
d. None of the choices

In performing MAS, a practitioner must act with integrity,and objectivity and be independent in mental attitude.
This statement falls under
a. personal characteristics
b. client benefit
c. due care
d. competence

Which of the following is not a characteristic of management services?

a. MAS pinpoints actions to be taken, the benefits of which will be received in the future
b. None of the choices
c. In MAS engagements, the nature of work involved requires a lesser need for junior assistance
d. A wider variety of assignments are encountered in MAS that in audit

An audit independence issue might be raised by the auditor’s participation in MAS engagements. Which of the
following statements is most consistent with the profession’s attitude towards this issue?
a. The decision as to loss of independence must be made based upon the facts of the particular case.
b. The auditor who is asked to review management decisions is also competent to make these decisions
and can do so without the loss of independence.
 c. Information obtained as a result of MAS engagement is confidential to that of specific engagement and
should not influence the performance of the attest function.
d. The auditor should not make the management decisions for an audit client.

Which of the following does not relate to MAS?

a. Expressing independent expert opinion on the client’s financial statements.
b. Design/installation of accounting system
c. Financial analysis for project feasibility studies
d. Cost analysis for major investment decisions.

Usual services maybe offered readily by the practitioner based on his basic training and background.
True

Which of the following is not an area related to the performance of MAS by independent accounting firms ?
a. Introducing new ideas, concepts and methods to management.
b. Performing special studies, preparing recommendations, and formulating plans and programs.
c. Improving existing policies, methods and procedures.
d. Performing management functions and making decisions.

In performing MAS engagements, the consultant should not take any position that might
a. Result in new organizational policies and procedures.
b. Impair objectivity.
c. Constitute advice and assistance.
d. Provide technical assistance in implementation.

These are groups of clients that the consultant can provide MAS which includes organizations such as
hospitals, research institutions, and charitable institutions.
a. Professional associations
b. Governmental agencies and instrumentalities
c. Privately owned firms
d. Not for profit organizations

Before undertaking the engagement, a practitioner is to inform his client of all matters significant to the
engagement. True

Competence in MAS is acquired by

a. Education
b. Auditing and other experience.
c. All of these.
d. Actual performance of MAS.
Which of the following statements is not acceptable ?
a. The practitioner provides consulting services to an existing audit client.
b. The CPA does not extend his service beyond the presentation of recommendation or giving of advice.
c. The practitioner offers and provides consulting services to two major competing clients.
d. The practitioner shares with new client substantial information regarding another client belonging to the
same industry.

Which of the following statements is false ?

Statement 1 In management audit, a team with a mix of members who are accountants and non accountants
will provide a desirable combination of specialists and will offer a cross fertilization of ideas from different
business fields.
Statement 2- Because the CPA must be independent, he must not allow the client to participate in any phase
of the engagement.
Statement 3 – Although MAS extend beyond the traditional accounting services, MS practitioners are still
bound by the rules of professional ethics in the practice of accounting in general.
Statement 2

Which of the following is not a characteristic of management services?

a. Cost analysis of major investment decisions
b. Design and/or installation of accounting system
c. None of the choices
d. Financial analysis for project feasibility studies

The following are among the ground rules that a consultant should observe in providing support for internal
arguments in a client except
a. Introduce and explore options which reconcile different positions in a win-win way.
b. Be sensitive to who is supporting different positions in the organization
c. Provide the client manager information and insights
d. Build rapport with the client about the strenths and weaknesses of his or her argument.

The following are among the ground rules that a consultant should observe in providing support for internal
arguments in a client except
a. Provide the client manager information and insights that will strengthen hisposition against his
adversaries in the organization.
b. Build rapport which the client about the strengths and weaknesses of his or her argument.
c. Introduce and explore options which reconcile different positions in a win-win way.
d. Be sensitive to who is supporting different position in the organization.

Independence, rather than competence is the underlying quality that the practitioner must possess in an MAS
engagement.
Ability to define objectives and outcomes is an example of a consultant’s
a. Rapport building skills
b. Project management skills
c. Analysis skills
d. Interpersonal skills
The basic analytical process applied in consulting engagements include
1. Definition of the problem.
2. Im plementation of the recommended solution to the problem.
3. Development of the solution.
4. Identification of objectives.
5. Fact finding and analysis.
6. The order in which the above mentioned steps are generally applied are:

a. 4,5,1,3,2
b. 1,2,3,4,5
c. 4,1,4,3,2
d. 4,1,3,5,2

Which of the following statements is(are) false ?

Statement 1- All of the provisions of the Code of Professional Ethics for CPAs in public accounting must be
observed without exception by those in MAS.
Statement 2 – MAS are confined only to such areas as financial accounting, auditing and tax services.
Neither statement 1 nor 2

A practitioner’s scope of MAS is broad and covers all of the following except
a. Re engineering engagements
b. Computerization engagement.
c. Audit engagements
d. Change in management engagements.

Indicate which of the following statements is(are) true.

Statement 1- A CPA firm’s primary purpose for performing MAS is to enable the staff members to acquire the
necessary continuing education in all areas of business.
Statement 2- MAS consultation, unlike MAS engagement, generally involves advice in which the analytical
process is applied.

Statement 2
In all aspects of the practitioner’s performance of MAS, he must avoid assuming the role of management,
limiting his services to those of an objective researcher, analyst or advisor, rather than a decision maker.
True

Which of the following statements is false?

a. A person who wants to become a consultant, must first pass the government board examinations given
for that purpose.
b. Competence can be acquired by formal college education, experience in traditional services and actual
performance of MAS.
c. It is necessary that in performing MAS, a practitioner must act with integrity and objectivity and be
independent in mental attitude.
d. The consultant’s competence places him in logical position to perform MAS for a certain client.

The concept of due professional care

a. Requires that in each technical area, the practitioner should perform the engagement with utmost
professional quality.
b. Involves diligence and appropriate attention in carrying out the assignment.
c. Does not require that all work be done within the provisions of the Code of Professional Ethics and
other Professional standards.
d. Is acquired and maintained through a combination of education and experience.

Management services of CPAs cover all the following, except

a. Organizational development and planning
b. None of the choices
c. System design development and implementation
d. Project feasibility studies

An MS client asked for internal control evaluation. During evaluation, the practitioner suggests that certain
changes are necessary in handling some accounts. The client agrees. However, the client requests that his
former consultant supervise the installation. The practitioner knows that such former consultant lacks sufficient
experience to provide the necessary technical direction and supervision. In this case, the practitioner should
a. Decline the engagement if the client insists that the former consultant supervise the installation and the
necessary technical competence would not be provided even through other means.
b. Prevent the former consultant to supervise the installation.
c. Tell the client everything he knows about the former consultant so he could be prevented from
supervising the installation.
d. Encourage the former consultant to attend a seminar/workshop to learn the basics of engagement
supervision.

Which of the following statements is not correct ?

a. Documentation is essential in an MAS engagement as it is in an audit engagement.
 b. To maintain his independence, the consultant limits his services to that of recommending and designing
an accounting system but leave the actual implementation and installation to the client.
c. MAS may involve making decisions for the client.
d. An MAS practitioner need to be concerned with independence in his clients and the overriding
consideration for the engagement is competence.
Competence in MAS engagement is derived from the following, except
a. Research capability.
b. Frequent communication with the client.
c. Experience and specialized training.
d. b.Technical and supervisory skills.

As a consultant, the MAS practitioner should

a. Conduct his engagement as if he is a member of the client’s organization.
b. Exercise administrative control over the client’s staff to avoid unnecessary delays in implementation.
c. Not take responsibility for making decisions and policy judgements.
d. Encourage dependence of client on the consultant’s staff so as to pinpoint clear responsibility in
implementing systems.

The ability to identify and define client needs, to utilize the analytical approach and process, to apply
knowledge of the technical subject matter under consideration, to communicate recommendations effectively
and to assist in implementing the recommendations. It is acquired and maintained through a combination of
education and experience.
a. Competence
b. Independence
c. Professionalism
d. Due care

MAS by CPAs maybe defined as those services which are designed primarily to furnish advice or assistance
to management through ordinary relationship with respect to planning, organizing or controlling any phase of
business activity. True

Common outcomes desired from business planning and development generally include the following except
a. Development of new products
b. Internal structural reorganizations.
c. Better trained personnel
d. Increase in market share

Which of the following statements is false ?

a. CPAs are expected to be experts in all areas of MAS.
b. Competence in MAS can be acquired by formal college education, experience in traditional services
and actual performance of MAS.
c. It is necessary that in performing MAS , a practitioner must act with integrity and objectivity and be
independent in mental attitude.
 d. Engagements must be performed by practitioners having competence in the analytical approach and
process.

A CPA’s scope of management services is broad and covers all the following, except
a. None of the choices
b. Change in management engagements
c. Re-engineering engagements
d. Computerization engagements

The following are managerial accounting related consultancy services that a CPA may provide except
a. Financial statement services
b. Variance analysis
c. Evaluation of working capital requirements of the business entity
d. Cost analysis for managerial decision

As a consultant, the CPA practitioner should

a. Encourage dependence of the client on the consultant’s staff to pinpoint clear responsibility in
implementing system
b. Conduct his engagement as if he is a member of the client’s organization
c. None of the choices
d. Not take responsibility for making decisions and policy judgments in MAS engagements

Which of the following is false?

a. Included in the practice of consulting is the provision of confidential service in which the identity of the
client is concealed
b. None of the choices
c. CPAs in performing management services may be in the practice of management consulting
d. Businesses hire management consultants to help define specific problems and develop solutions

A management consultant will make recommendations to help make a company’s operations more streamlined
and, in the long run, help the company to boost its productivity and profitability.
True
All practitioners whether CPAs or not are obliged to observe MAS Practice Standards. Moreso, these are
applicable only to structured or organized Mas Practice Engagements.
False
Before accepting an engagement, the practitioner does not need to notify the client of any reservations he has
regarding anticipated benefits. False

Which of the following statements is true ?

 a. A non CPA is prohibited under the revised accountancy law to engage in professional MAS practice.
b. Strict adherence to GAAP in MAS is required..
c. In MAS engagements, the independent CPA renders technical advice.
d. A CPA in MAS engagement, may take position that would impair his independence if the client is not
his audit client at the same time.

Which of the following is not an area related to the performance of management services by independent
accounting firms?
a. Improving existing policies, methods, and procedures
b. None of the choices
c. Introducing new ideas, concepts, and methods of management
d. Performing special studies, preparing recommendations, and formulating plans, and programs

Which of the following is not an area in MAS Practice ?

a. Reviewing and suggesting improvements of policies, procedures, systems, methods and the like.
b. Conducting special studies
c. Marketing and public relations work.
d. Introducing new ideas, concepts and methods.

Which of the following is not an analytical approach in MAS engagement ?

a. Defining the problem or opportunity for improvement.
b. Ascertaining the pertinent facts and circumstances.
c. Counseling management in planning, operating and controlling functions.
d. Presenting findings and recommendations.

Integrity is the ability to avoid bias and to maintain an impartial attitude on all matters under review. False

Competence in management advisory services is acquired by

a. Auditing and other experience
b. All the above
c. Education
d. Actual performance of management advisory services

The following characterize management advisory services, except

a. Involves decisions for the future
b. Broader in scope and varied in nature
c. Relate to specific problems where expert help is a must
d. None of the choices