Management Advisory Services b.

Objectivity
c. Independent in mental attitude
MAS - the function of providing professional (advisory) services, 2. Professional Competence
the primary purpose of which is to improve the client’s use of the a. Identify the client’s need
capabilities and resources to achieve the objectives of the b. Apply the appropriate analytical approach and
organization (AICPA Committee on Management Services) process
c. Apply knowledge of the technical subject
Scope of MAS matter under consideration
MAS are usually related to CPA services in the areas of auditing, 3. Due Professional Care
tax and accounting, and may involve activities such as: B. Technical Standards
1. Counseling management in its analysis, planning, 4. Client Benefit
organizing and controlling functions 5. Understanding with the Client
2. Introducing new ideas, concepts, and methods to a. Engagement objectives
management b. Engagement scope
3. Reviewing ad suggesting improvements of policies, c. Roles and responsibilities
procedures, systems, methods and organizational d. Engagement approach
relationships e. Communication
4. Improving the management information system, f. Work schedule
application and use of managerial accounting, control g. Fees and expense arrangement
systems, data processing and mathematical techniques 6. Planning, Supervising and Control
and methods 7. Sufficient Relevant Data
5. Conducting special studies proposing plans and 8. Communication of Results
programs, and providing guidance and technical
assistance in their implementation Stages in MAS Engagements
1. Engagement Negotiation
Auditing vs. MAS a. Proposal letter must contain the following:
External Auditing MAS i. Engagement objectives
Beneficiaries Third Party Management ii. Engagement scope
of Services iii. Roles and responsibilities
Objective Issue and opinion Solve a problem iv. Engagement approach
Focus Past or historical Historical and v. Communication
data futuristic data vi. Work schedule
Scope Specific Broad and varied vii. Fees and expense arrangement
Recurrence of Annually Non-recurring 2. Engagement Planning
Engagement a. Forming the engagement team
Staff Experienced and Usually highly b. Developing the work program
Requirement inexperienced staff qualified staff i. Engagement objectives, scope of work and the
Client’s Usually people Usually requires approach to be used
Coordination from the both executives and
ii. Breakdown and schedule of tasks to be
accounting employees of the
performed
department client
iii. Staffing requirements and assignments of
tasks to the team members
Professional Attributes of Management Consultants
3. Engagement Execution
1. Technical skills
a. Data gathering
2. Interpersonal skills
b. Data analysis
3. Consulting process skills
4. Presentation of Engagement Results
a. Oral presentation
MAS Practice Standards
b. Written report
A CPA is guided by standards in the performances of his
i. Long form report
professional practice, including management advisory services.
ii. Short form report
Accordingly, a CPA should observe the following standards set by
5. Implementation of Recommendation
PICPA in the practice of MAS:
6. Engagement Evaluation
A. General Standards
7. Post Engagement Follow-up
1. Personal Characteristics
a. Integrity
Management (Managerial, Internal) Accounting Contemporary Focus of Management Accounting
-Field of accounting concerned with the accumulation, analysis, 1. Just in Time (JIT) System
and presentation of information thru appropriate concepts and 2. Total Quality Management (TQM)
techniques, to assist management in planning, directing or 3. Business Process Reengineering (BPR)
coordinating and controlling business operations to attain the 4. Theory of Constraints (TOC)
organizational objectives 5. Kaizen Costing
-Field of accounting that provides economic and financial
information for internal users, particularly managers or decision
makers in an organization

Financial Accounting vs. Management Accounting

Fin Acctg Mgmt Acctg
Type of Primarily financial Financial and non-
information financial
Primary User External user Management
Purpose Produce general Produce special
purpose FS purpose FS
Frequency of Periodic As needed
report
Emphasis of Reliability and Relevance and
reports precision timeliness
Focus Pertains to the Pertains to specific
company as a units on the business
whole
Amount of Compressed and Extensive and detailed
details simplified
Time Historical Futuristic
orientation
Guiding PFRS Management’s needs
Principle
Unifying A=L+C None
model

Role of Management Accountant in the Management Process

-all management functions involve DECISION MAKING, which is
BASED on INFORMATION, provided by management accountants
1. In PLANNING, accounting provides quantitative
information to help management establish
organizational goals
2. In CONTROLLING, accounting is the principal means of
measuring and recording actual performance. Through
accounting reports, actual results are compared with
standards set to guide management in making
corrective actions
3. In NON-ROUTINE DECISION MAKING, accounting
provides relevant cost and benefits, regarding different
courses of action, coupled with recommendation on the
best possible course of action.

Standards of Ethical Conduct for Management Accountants

1. Competence
2. Confidentiality
3. Integrity
4. Objectivity