Consultancy

Which of the following is not a characteristic of MAS practice?

• MAS practice is broad in scope while specific in approach

• MAS practice involves problem-solving affecting the future operations of the client

• The beneficiary in MAS service is the government

• MAS practice is relatively young and had been tremendously evolving in the recent times

Which of the following is not a characteristic of MAS practice?

• MAS practice is broad in scope while specific in approach

• MAS practice involves problem-solving affecting the future operations of the client

• The beneficiary in MAS service is the government

• MAS practice is relatively young and had been tremendously evolving in the recent times

It refers to the ability of the practitioner to maintain his role as an adviser or consultant without making any attempt to make decisions for the management.

• Objectivity

• Competence

• Independence in mental attitude

• Due care

The chief executive officer wants to know whether the purchasing function is properly meeting its charge to "purchase the right materials at the right time in the right quantities." Which of the following types of engagements addresses this request?

• A financial engagement relating to the purchasing department

• An operational engagement relating to the purchasing function

• A compliance engagement relating to the purchasing function

• A full-scope engagement relating to the manufacturing operation

In performing management advisory services, a practitioner must act with integrity and objectivity and be independent in mental attitude. This statement falls under:

• Competence

• Client benefit

• Due care

• Personal characteristics

The MAS Practice Standards include the following specific attributes of practice, except

• Competence, confidentiality, and integrity

• Personal characteristics, competence, and due care

• Client benefit, understanding with the client, and planning, supervision, and control

• Sufficient relevant data and communication of results

All except one are the advantages of a CPA over management consultants of other professions:

• The CPA is a specialist in accounting and taxes

• The CPA is known to the client and enjoys his confidence

• The CPA is already familiar with the client's business

• The CPA is a member of a profession with recognized standing

A CPA should not undertake a management advisory service engagement that includes continued participation through implementation, unless:

• the CPA accepts overall responsibility for implementation of the chosen course of action

• the CPA acquires an overall knowledge of the client's business that is equivalent to that of possessed by management

• upon implementation the client's personnel will have the knowledge and ability to adequately maintain and operate such systems as may be involved

• upon implementation a new study and evaluation of the system of internal control

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

• Familiarity with the client's financial accounting and internal control systems

• Analytical experience in problem-solving

• Professional independence, objectivity, and integrity

• Auditor of the client

Answer explanation

Being the auditor of the client does not automatically qualify the CPA to render MAS practice to his client. This is because the primary criterion in accepting auditing is independence while the paramount criterion in accepting MAS engagement is competence.

A CPA should reject management advisory services engagement if

• It would require him to make management decisions for an audit client

• The proposed engagement is not accounting related

• His recommendations are to be subjected to a review by the client

• He audits the financial statements of a subsidiary of the prospective client

Answer explanation

A CPA advisor may render study, analyses, research, interpretation, comment, and the like except for one authority which exclusively belongs to the manager- that is, the power to make decisions. Therefore, any advisory engagement that requires him to make decisions should be rejected.