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Prelim Topic 1 - Basic Considerations in MAS

The document outlines the nature and stages of management consultancy, emphasizing the importance of problem-solving, human relations, and the need for highly qualified staff. It details the broad scope of consultancy services, which can be related or unrelated to accounting and finance, and describes the various stages involved in a consultancy engagement from negotiation to post-engagement follow-up. Additionally, it highlights the classification of management advisory services based on required expertise and the types of billing arrangements for clients.

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2 views

Prelim Topic 1 - Basic Considerations in MAS

The document outlines the nature and stages of management consultancy, emphasizing the importance of problem-solving, human relations, and the need for highly qualified staff. It details the broad scope of consultancy services, which can be related or unrelated to accounting and finance, and describes the various stages involved in a consultancy engagement from negotiation to post-engagement follow-up. Additionally, it highlights the classification of management advisory services based on required expertise and the types of billing arrangements for clients.

Uploaded by

mitchphilbackup
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Management Advisory Services

Strategic Business Analysis Topic 1


Topic outline

NATURE OF MANAGEMENT STAGES IN MANAGEMENT


CONSULTANCY CONSULTANCY
S - Services are rendered in behalf of management

I - Involves problem solving

R - Relates to future

H - Human relations play a vital role


Nature of
E - Engagement requires highly qualified staff
mgt
consultancy B - Broad in scope

I - Involves varied assignments

E - Engagements are non-recurring


Nature of mgt consultancy
S – Services are rendered in behalf of management
Professional Fees

Consultant Management
Services (Advice)
1) Consultations – advice for a short time frame
2) Engagements – analytical approach and process is applied in
the study or investigation
Nature of mgt consultancy
I – Involves problem solving R – elates to future
Consultants are catalyst of change Management consultancy is
specifically in providing solutions to clients FUTURE-ORIENTED
and problems

What will benefit on every advice a


The role of consultants is to provide consultant makes is the FUTURE.
technical advice and assistance to its clients
on areas which needed development,
solution or improvements.
Nature of mgt consultancy

H - Human relations play a vital role

Technical Skills
Professional Attributes of Interpersonal Skills
Management Consultants Consulting Process Skills (Project Management Skills)
Nature of mgt consultancy

An experienced
management
E- consultant possesses
Engagement special knowledge, No law limits the
skills and a variety of
practice of
requires highly personal attributes that
consultancy to
make him the most
qualified desirable candidate to CPAs
staff/s undertake the
engagement involving
his area of expertise
Nature of mgt consultancy

A. Related to the Accounting and


Finance
• Cost Accounting
B- Broad in scope • Financial Management
• Financial Accounting Systems Design and
Development
• Development and Establishment of
Budgetary Controls
Nature of mgt consultancy

B. Not related to the Accounting and Finance


1) General Management Consultation
2) Project Feasibility Studies
B- Broad in scope 3) Organization and Personnel
4) Industrial Engineering
5) Marketing
6) Operations Research
Nature of mgt consultancy
MAS CLASSIFICATIONS BASED ON REQUIRED EXPERTISE

Examples:
•Analysis of financial and operating
Usual services – these are services statements
which a CPA can readily offer •Assistance in the preparation of forecasts and
budgets
because of his/her background. •Design of filing systems for storing
accounting records
•Evaluation of form of business organization
Nature of mgt consultancy
MAS CLASSIFICATIONS BASED ON REQUIRED EXPERTISE
Examples:
•Giving advice on dividend policy and plans for
Somewhat Specialized expansion
Services – extension of •Finding sources of capital and figuring the
the common acctg work approximate cost of small business loans, bond
but need additional issue, and stock issuance
training or experience •Advising on accounting and tax matters relative to
estate planning
•Presenting and analyzing the pros and cons of
various retirement and profit- sharing plans
Nature of mgt consultancy

I – Involves varied assignments

E – Engagements are non-recurring


•Engagements are non-repetitive in nature.
•The assignment is completed when a satisfactory
solution has been developed and provided
Stages of mgt
consultancy
• Stage 1: Negotiating the engagement
(Preliminary Engagement Stage)
- Client Acceptance and Retention (Client
Background Investigation)
- Preparation of Proposal Letter and Engagement
Contract
- Establishing fees and billing arrangement

Methods of Billing Clients:


*Actual Time/per diem basis
*Flat or Fixed Basis
*Maximum Fee Basis (combination of the two
above)
*Retainer Basis (work or no work)
Stages of mgt
consultancy
• Stage 2: Preparing for and starting the engagement
(Engagement Planning)
- Preparation of work plan or (engagement
program)
- Selection of personnel
- Scheduling of tasks
• Stage 3: Conducting the Engagement
- Problem Identification
- Data Gathering
- Data Analysis and Diagnosis
- Solution Development
Stages of mgt consultancy (Stage 4-5)

Stage 4 Preparing and


Stage 5 Implementing the
presenting the report and
recommendation
recommendation

Stage 7 Post-engagement
Stage 6 Evaluating the
follow-up
engagement

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