Basic Considerations in MAS
Basic Concepts
Management Advisory Services, as a public accounting practice, is sometimes referred to as management services, business advisory services, business and financial advisory services, and other similar names.
Basic Concepts
Management Advisory Services (MAS) refers to that practice of accounting concerned with providing advice and technical assistance to help management improve the use of resources in achieving organizational goals. A person who practices a MAS work is called as an advisor or consultant. Management consultancy is not limited to Certified Public Accountants (CPAs).
Basic Concepts
The job of an advisor is to provide advice and technical assistance to manager. An advisor is an individual (or firm) who is not a member of the organization but has the trust and confidence of the manager.
Basic Concepts
Management Advisory Services by independent accounting firms can be described as the function providing professional advisory (consulting) services, the primary purpose of which is to improve the client’s use of capabilities and resources to achieve the objectives of the organization.
Basic Concepts
The client in MAS practice is the management. Managers are entrusted with organizational resources to make more wealth. Managers must have the power to make decisions in doing their fiduciary and proprietary functions. The quality of their decisions would define the organizational survival, growth and leadership.
Characteristics of MAS Engagement
Service is for management Involves problem solving Scope is broad Diversity Future orientation Non-recurring Highly qualified staf Vital role of human relations
Areas of MAS Practice
All services rendered to management except those in the areas of auditing, legal services, and taxation are included in the professional service of management advisory services
Areas of MAS Practice
The advisory services rendered by CPAs may be divided into two areas – (1) finance and accounting services and (2) non-finance and non-accounting services
Areas of MAS Practice Below are examples of tasks undertaken in an MAS engagement:
Finance and Accounting
Financial accounting Management accounting system design and development Financial management
Non-Finance and Non-Accounting
General Management Project feasibility studies Organization and personnel Industrial engineering Marketing Operating research
Determination of Scope of Service In determining the scope or type of service, the consultant should consider the following guidelines
Responsibility to establish scope of services. Independence Competence Requirements for specialization Attention to the client’s basic problems Referral arrangements The Code of Professional Ethics
Analytical Approach and Process
MAS involves the use of analytical approach and processes. It typically involves more than an incident efort devoted to some combination of activities in determining client objectives, factfact finding, opportunity, or problem definition, evaluation of alternatives, formulation and followup. Analytical approach and processes also refers to the systematic, objective and rational method of solving organizational problems. It involves, at a professional level, the ability to find facts and define the basic problems (not symptoms), identify alternative solutions, and to adopt the most applicable solution under the circumstances.
Role in Engagements
Full Scope Engagements Special Study Engagements Informal Advice
Professional Standards and MAS Practice Standards
Professional standards include the divine laws, the constitution, the Accountancy Act of 2004 (Republic Act No. 9298), and the Code of Ethics for Professional Accountants in the Philippines
Professional Standards and MAS Practice Standards
MAS Practice Standards 1.
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Personal characteristics. In performing Management Advisory Services, a practitioner must act with integrity and objectivity and be independent in mental attitude. Competence. Engagements are to be performed by a practitioner having competence in the analytical approach and processes, and in the technical subject matter under consideration. Due care. Due professional care is to be exercised in the performance of Management Advisory Services engagements. Client Benefit. Before accepting an engagement, a practitioner is to notify the client of any reservations he has regarding anticipated benefits
Professional Standards and MAS Practice Standards
MAS Practice Standards 5.
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Understanding with client. Before undertaking an engagement, a practitioner is to inform his client of all significant matters related to the engagement. Planning, Supervision, and Control. Engagements are to be adequately planned, supervised and controlled. Sufficient Relevant Data. Sufficient relevant data is to be obtained, documented, and evaluated in developing conclusions and recommendations. Communication of Results. All significant matters relating to the result of the engagement are to be communicated to the client.
MAS Engagement Process
Engagement Negotiation Engagement Planning Engagement Execution Presentation of Engagement Results Implementation of recommendation, if applicable Engagement Evaluation Post-engagement follow-up
