Lecture Notes – Management Advisory Services
ACC 407 – Management Accounting Refresher Course with Comprehensive Examination
I. Overview of MAS Practices by CPA’s Conducting special studies, proposing plans and
programs and providing guidance and technical
Management Advisory Services – refers to the area of
assistance in their implementation
accounting work concerned with providing advice and
technical assistance to help clients improve the use of their Broad Areas of MAS
resources to achieve their goals.
Areas normally related to the accounting and management
Management Consultant – a person who is qualified by functions:
education, experience, technical, ability and temperament
1. Financial accounting systems design and
to advice or assist businessmen on a professional basis in
development
identifying, defining, and solving specific management
2. Management accounting systems design and
problems involving in the organization, planning,
development
direction, control and operation of the firm.
3. Development and establishment of budgetary
Reasons for Hiring Management Consultants controls
a. Help define specific problems and develop The field covers the following
solutions
a. Cost accounting
b. Provides specialized skills and experience
b. Financial management
c. Provide confidential service in which the identity
of the client’s concealed Areas Not Normally Related to the Accounting and
d. Train client personnel Finance
e. Help improve intra-company communications
f. Render an independent opinion General Management Consultation
g. Help get results. Project Feasibility Studies
Organization and Personnel
MAS by CPA’s – CPA’s performing management Industrial engineering
consulting and other advisory services are considered in Marketing
the practice of professional accounting and are bound by Operations research
the Code of Ethics of Professional Accountants
Advantages of CPAs over other Professionals in MAS
Characteristics of MAS Practice
1. Services are rendered for the management rather They are already familiar with the client and his
than for third parties business and enjoy the client confidence
2. Involves problem solving They are members of a profession with recognized
3. Relates to the future standing and are equipped with technical know-
4. Broad in scope how in accounting and taxation
5. Involved varied assignments
6. Engagements are usually non-recurring Analytical Approach and Process
7. Engagements require highly qualified staff 1. Ascertaining the pertinent facts and circumstances
8. Human relations play a vital role in each 2. Seeking and identifying the objectives
engagement 3. Defining the problem or opportunity for
Scope of MAS improvement
4. Evaluating and determining possible solutions
Counseling management in its analysis, planning, 5. Presenting findings and recommendations
organizing, operating and controlling 6. Planning and scheduling actions
Reviewing and suggesting improvement in 7. Advising and providing technical assistance in
policies, procedures, systems, methods and implementing
organizational relationship
Introducing new ideas, concepts and methods to
management
3 Broad Stages 8. Stages in MAS Engagements
1. Analysis stage – consists of ascertaining the Specific Activities involve in MAS Engagement)
pertinent facts and circumstances, seeking and
1. Pre-engagement considerations
identifying objectives and defining the problem or
2. Engagement planning
opportunity for improvement
3. Engagement management and execution
2. Design stage – consists of evaluating and
4. Engagement conclusion
determining possible solutions and presenting
findings and recommendations
II. Overview of MAS Practices by CPA’s
3. Implementation stage – consists of planning and
scheduling actions and advising and providing System – an organized or established set of procedures of
technical assistance in implementing operation)
Role of Consultants and Clients in MAS Engagements Information System – network of all the used in
communicating information the organization.
a. In full Scope Engagements
b. Limited to that of an advisor; in the The Major Information System
implementation stage, his role is merely to provide
technical assistance a. Financial Information System – flow the monetary
information in the organization
In Special Study Engagement b. Personal Information System - flow of
information about the staff or personnel working
a. To proceed through the first five phases
in an organization
of the analytical process, apply objective
c. Logistic Information System- information about
judgment to the facts and present findings
the physical of goods within an organization
and recommendations to the client for
decision and further action Management Information System - a set of data gathering,
c. In Informal Advice analyzing, and reporting functions designed to provide
b. To respond as practicable at the moment management with the information it needs to carry out its
and express the basis for the response functions.
MAS Practice Standards Accounting Information System- a sub- system of the
broad management information system, an orderly
General Standards
arrangement of procedures, personnel, written records,
a. Professional competence equipment and devices used for the systematic or
b. Due professional care organized collection, processing and reporting of financial
c. Planning and supervision and other information essential to the official and effective
d. Sufficient relevant data conduct and evaluation of the activities or transactions of a
e. Forecasts business enterprise.
Technical Standards Data Processing
a. Role of MAS Practitioner – adviser Data- refers to facts that pertain to or describe some
b. Understanding with the client situation or condition
c. Client benefit
Processing – refers to handling or manipulation of data
d. Communication of results
Data processing – operation needed to collect and
Stages in MAS Engagements
transform data into useful information
1. Negotiating the engagement
Basic Data Processing Operations
2. Preparing for and starting the engagement
3. Conducting the engagement 1. Classifying
4. Preparing and presenting the reports and 2. Sorting
recommendation 3. Calculating
5. Implementing the recommendations 4. Summarizing
6. Evaluating the engagements 5. Recording
7. Post-engagement follow-up 6. Storing
7. Communicating
Data Processing Methods
a. Manual data processing -performed by
hand, pen, pencil Phases In Systems Development
b. Mechanical data processing – performed
by using mechanical equipment Phase 1: System Analysis
c. Electronic data processing (EDP)- data are Phase 2: System Design
converted into machine-readable form and
then processed through electronic Phase 3: Programming
impulses.
Phase 4: Conversion and Implementation
EDP Systems
Phase 5: Post Implementation
Computer competency – the fundamental understanding of
PHASES OF SYSTEM ENGAGEMENT
the technology, operation, applications and issues about
computers. 1. Gathering and analyzing facts
2. Designing the system
Computer system – refers collectively to all interconnected
3. Preparing and presenting the system report
hardware including the processors, storage device,
4. Implementation or installation of recommendation
input/output devices and communication equipment
5. Follow-up
Basic Components of Computer System 6. Documentation of the system
1. Input References:
2. Processing
BIBLIOGRAPHY Rodelio S. Roque, B. C. (2011). Reviewer
3. Output
4. Storage in Management Advisory Services. Manila: GIC
Enterprises and Co. Inc.
Computer Information Systems
Executive Information System (EIS)- a system designed
specifically to support decision -making at the executive
levels of management, primarily the tactical and strategic
levels.
Decision Support System (DSS)- an interactive information
system that relies on integrated set of user-friendly
hardware and software tools to produce and present
information focused to support management decision -
making involving semi-structured and unstructured
problems
Expert System – an interactive knowledge-based system
that responds to questions, ask for clarifications, makes
recommendations, and generally helps users make
complex decisions.
Assistant System- a type knowledge-based system that
helps users make relatively straightforward decisions.
The System Life Cycle
1. Birth Stage
2. Development Stage
3. Production Stage
4. Death Stage
