Ramon Joseph Diano BSA 4-C

Chapter 3
Areas of Management Advisory Services Part II

Traditional Services
1. Managerial Accounting This engagement involves providing assistance to management related to
planning and controlling business operations as well as decision making.
2. Design and appraisal of accounting system - This will involve development of an accounting system for a
newly-organized firm; extension of the present accounting system to cover new business activities;
accounting service in general; accounting machines installation; internal control studies and installations.
3. Financial Management-related services - The planning, directing, monitoring, organizing, and controlling
of the monetary resources of an organization. Financial Management means planning, organizing,
directing and controlling the financial activities such as procurement and utilization of funds of the
enterprise. It means applying general management principles to financial resources of the enterprise.
4. Project Feasibility Studies - An analysis of the ability to complete a project successfully, taking into
account legal, economic, technological, scheduling and other factors. Rather than just diving into a project
and hoping for the best, a feasibility study allows project managers to investigate the possible negative
and positive outcomes of a project before investing too much time and money.

Emerging Consultancy Services

5. Global Risk Management Solution involves managing the totality of risks financial, operational and
systems, and strategic to improve financial and business performance.
6. Transaction services - involves services related to mergers, acquisitions, divestitures, joint ventures, spin-
off, and strategic alliance. Ex: Due diligence services to uncover potential financial and strategic risks and
rewards.
7. Financial Advisory Services - CPAs provide comprehensive, financial, economic, and strategic advice to
companies with complex business problems and disputes. Ex: investment banking, fraud, and dispute
analysis, intellectual property disputes.
8. Project finance and privatization - involves mas related to partnership between the public and private
sectors in delivering infrastructure and services or privatization and project finance. Ex: development of
the commercial structure for a deal, including risk mitigation and contracts.
9. Valuation services - include service that guide clients through complex business transactions such as
acquisition or divestiture of investment, debt structuring.
10. Business Recovery Services emphasizing on the implementation and rationalization and recovery
programs designed to rebuild value such as creditor services, business regeneration, hands on
turnaround, insolvency/executory services, insurance services such as collectability of reinsurance
recoveries, collections, disputed claims. Etc.
11. Dispute Analysis and Investigations Most common types of services under this category are
environmental analysis, real estate damage, investigative services, construction disputes, economic and
financial analysis.
12. Computer Risk Management Management consultants help client understand and manage their
business risk relating to the implementation and use of technology.
 13. Application Software Selection and Implementation The management consultant assists clients in
prioritizing their needs, identifying the right software and tailoring to meet their specific requirement.

Determining the Scope of Service

1. Responsibility to establish scope of services the accounting firm has the responsibility to determine the
scope of services it is competent to offer to the public.
2. Independence The accounting firm, when providing MAS should give particular consideration to both
independence and the appearance of independence.
3. Competence Independent accounting firms have the responsibility of evaluating their ability to render
MAS of professional quality in each specific area.
4. Requirements for specialization the requirements in certain areas may limit the scope of MAS offered
by any given independent accounting firm.
5. Identification and resolution of clients basic problems the scope of services offered by the
independent accounting firm should be adequate to identify and resolve the basic clients problems and
not just problem symptoms.
6. Referrals Referral MAS work to other independent accounting firms is another way of developing that
firms capability.
7. Code of professional Ethics it is the responsibility of the independent accounting firm to assure itself
that the nature and scope of the MAS it elects to offer are in conformity with the code of professional
ethics.

Types of Clients Served

Contact clients
Intermediate clients
Primary clients
Unwitting clients
Indirect clients
Ultimate clients

Groups of clients that CPAs can provide MAS

1. Privately-owned business firms
2. Governmental agencies and organizations
3. Not-for-profit nongovernmental organizations
4. Professional associations
5. Others

How Consulting Adds Value

The Decision to Use a Consultant
Hiring a consultant involves:
An immediate financial cost
Disruption of a managers routine

Management consultants must constantly ask three fundamental questions:

a. What can I offer the client business that will enhance its performance and help it achieve its objectives?
 b. Why will my contribution be more valuable than that which existing managers and potential recruits, can
contribute?
c. How can I communicate to the client business that what I offer is valuable?

The actual output of a consulting exercise centers on providing one or more of the following:

1. Provision of information the consultant can offer the small business manager a service in providing him
or her with information which can help the business.
2. Provision of specialist expertise certain projects require the application of technical knowledge and an
ability to use specialist analysis techniques.
3. Provision of new perspective The consultant can contribute some conceptual frameworks that open up
thinking and aid the development of the managers cognitive schema.
4. Provision of support for internal arguments
5. Provision of support in gaining a critical resource the consultant can offer the client business valuable
support in gaining these resources:
Goodwill of customers
Capital from investors
Capital from government support agencies
People with particular skills and knowledge
Specialist materials, equipment and services
6. Facilitating organizational change All types of project may, if they are to be implemented successfully,
demand some degree of change in the structures and operating practices of the business.