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Nature of MAS by Independent Accounting

Firms
Management advisory services - the function of providing
professional advisory (consulting) services, the primary
purpose of which is to improve the clients use of its
capabilities and resources to achieve the objectives of the
organization.
Management consulting - independent and objective
advisory service provided by qualified persons to clients in
order to help them identify and analyze management problems
or opportunities. Management consultants also recommend
solutions or suggested actions with respect to these issues and
help, when requested, in their implementation.

Nature of MAS by Independent Accounting

Firms

These activities of management consultants can involve

two types of encounters with clients:
1. Consultations and; 2. Engagements.

Consultation
Short time frame
Qualified by stated limitations due to lack of first-hand observation
of the problem situation or lack of familiarity with underlying
technical aspects, and so on.

Engagement

An analytical approach and process is applied in a study or project.

Types of MAS Engagements

Management consultants in general apply the consulting

process to engagement having widely varying
characteristics. It may therefore be useful to classify
management services engagements according to six
dimensions. These dimensions include the following:
a)
b)
c)
d)
e)

nature of the problem

service delivery area
phase(s) of the analytic process
techniques and methodologies applied
industry (or nature of organization) to which the client belongs;
and
f) geographical area(s) where the engagement takes place.

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Nature of the Problem

Corrective problem: involves a situation
in which conditions have worsened and
arises suddenly and demands urgent
action.
Progressive problem: involves an
existing situation that can be improved
Opportunistic problem: involves a
situation in which a future opportunity
exists.

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Application of the Analytic Process

The analytic process in a consulting
engagement includes:
identifying the objectives
defining the problem
finding out the facts
developing the solution
implementing the solution

Techniques and Methodologies Applied

Most engagements can be aided by technical models or

methodologies. For example, capital investment planning
can be aided by a discounted cash flow model such as
the present value or the internal rate of return model.
Information systems planning and design can be aided
by a structured methodology.

Industry or Nature of Organization

A client who is the subject of an

engagement may be a privately owned
business firm, a government agency, or notfor-profit nongovernmental organization, a
professional association or some other type
of organization.

Geographical Areas

A consulting engagement may be restricted to a single

location, such as the home office of the client. It may also
involve multiple locations such as the several production
plants and warehouses of a large manufacturing firm. It
may even involve locations in foreign countries.

Service Delivery Areas

1. General management
2. Manufacturing

6. Procurement
7. Research and development

3. Personnel
8. Packaging

4. Finance and accounting

5. Marketing

9. Administration
10. International operations

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