OVERVIEW OF MANAGEMENT

ADVISORY SERVICES
 It is someone who has
expertise in a specific area
or areas and offers unbiased
opinion and advise for fee
Who is a consultant?
 Frustration with current job.

Want stimulating , dynamic growing career.

Why people
choose to Dissatisfied with lack of challenges, opportunity or
creativity in existing job.
be
consultant?
In between jobs and seeking new opportunities &
careers.

Foresee getting laid off & wish to established

themselves in a business to earn livelihood. May
start part-time while unemployed.
 Supplementary income.

Why people Retired with expertise & wisdom.

choose to
be People with working experience & industry
knowledge or other skills who want to combine
consultant? family life with work at home.

People who understand gov’t operations and the

contract process or who have built up contacts in
gov’t, politics & industry over years.
 MAS EVOLUTION

Accounting
system Income tax Management
Auditing design and work consultancy
installation

TRADITIONAL AREAS OF CPA FIRM

 EVOLUTION OF MAS IN CPA FIRMS

CPA firms
engage in
audit

Natural area of
development of
Management
a public
consultancy accountant

Provide
extremely useful
services to
business
managers
 CPA’s • “To utilize the essential qualifications it
Purpose in has available to provide advice and
technical assistance which will enable
Engaging in client’s management conduct its affairs
more effectively.”
MAS
 Technical competence

Familiarity with client’s finance, control

Essential system and business problems.
Qualifications Analytical ability & experience in
problem solving

Professional independence, objectivity

& integrity.
 NATURE OF MAS BY
INDEPENDENT ACCOUNTING
FIRM

MANAGEMENT ADVISORY SERVICE

• The function of providing professional
advisory.
• Primary purpose is to improve client’s use of its
capabilities and resources
NATURE OF MAS BY
INDEPENDENT
ACCOUNTING FIRM
MANAGEMENT CONSULTING
• Independent and
objective advisory service
provided by qualified persons to
clients
• Recommend solutions or suggested
actions with respect to the issues
involved
• Helps to effect constructive
change in the organization
 NATURE OF MAS BY INDEPENDENT
ACCOUNTING FIRM

TWO TYPES OF ENCOUNTERS

1. Consultations • Providing advice and
information during a short
2. Engagements time frame
• Information provided is
orally
• Information are qualified to
limitations

• Analytical approach and

process is applied in a
study or project
 OVERVIEW OF MAS BY CPAS
WHY USE MANAGEMENT
CONSULTANTS?
Professional Temporary
Independent Advisory Professional Agent of
Viewpoint • possesses Service Change
• see the true special • less • catalyst for
nature of the knowledge, expensive change
problems skill and • temporary
• distinguish variety of professional
feasible and personal help
infeasible attributes
• unbiased • introduce
suggestion new ideas
into the
organization
THE CONSULTING INDUSTRY

 InformationTechnology (IT)
 Consulting and system integration

 Corporate strategy

 Operations management

 Human resources management

 Outsourcing
OVERVIEW OF MAS BY CPAS

IT Firms

Accounting
firms
offering
MAIN consultancy

TYPES OF
CONSULTI
NG FIRMS
Major
consulting
only firms

Independents
 Data Gathering &
CAREER STRUCTURE processing
• Evaluation and
recommendations of the
 Analyst client business
 Consultants •3-5 years of experience
•Leads a consulting team
 Senior Consultants/Managers •Dealing with the client team
•Ability to take
 Business Development Managers
responsibility in running
 Directors/Partners (private small consultancy project

• Most experienced
•5-10 years of experience
consultant
•Developing firms product
•Responsible for the
•Responsible for building
development of the
relationship with its client
organization
•Involved in some large,
• Leads strategic
complex consulting
development
projects
•Over-all responsibility for
 DEVELOPING TRENDS

Specialization Improvement Change in the

in different of business management Technical
areas education culture Development
FUTURE PROSPECT

 Management consulting will become even

more specialized
 Orientation will be towards being
insight provider, creator and sharer of
information
 Management consultancy firms will tend to
remain small or quite large. Small firm will
focus on narrow areas of specialization;
large will develop & offer wide range of
services to sustain high cost of operation
 Dev’t of sophisticated marketing of services

 Bright students’ career attraction will

continue in management consulting.
 CHAPTER 2
• Areas of Management Advisory Services - Part I
 TYPES OF MAS ENGAGEMENTS
a) Nature of the Problem
b) Service Delivery Area
c) Phases of the Analytical Process
d) Techniques and Methodologies
Applied
e)Industry(or nature of
organization)
f) Geographical Area
 NATURE OF THE PROBLEM

a. Corrective • Situation in which

conditions have worsened.
• Existing situation
b. Progressive • that can be
improved.
c. Opportunistic • Situation in which a future
opportunity exists.
 SERVICE DELIVERY AREAS
o i.e. the functions or activities in which the
problem exists.

Example:
1. General Management

2. Manufacturing

3. Personnel General Accounting

4. Finance and Accounting Cost Accounting

Capital Investment
PHASES OF
ANALYTICAL PROCEDURE

a. Identifying objectives
b. Defining the problem
c. Finding out the facts
d. Developing the solution
e. Implementing the solution
TECHNIQUES AND
METHODOLOGIES APPLIED

Example:
Capital Investment planning can
be aided by a discounted cash
flow model.
INDUSTRY OR NATURE OF ORGANIZATION

GEOGRAPHICAL AREAS
 AREAS OF MS PRACTICE
1. Management functions of analysis, planning, organizing
and controlling.

2. Introduction of new ideas, concepts and methods to

management.

3. Improvement of policies, procedures, systems, methods

and organizational relationships.

4. Application and use of managerial accounting, control

systems, data processing, and mathematical techniques
and methods.

5. The conduct of special studies, preparation of

recommendation.
TYPES OF CONSULTANCY WORK
A. Business planning and development or Project
feasibility studies
B. Information systems consulting
C. Internal audit services
D. Management Operations audit
E. Business process improvement / reengineering
F. Others such as
1) Marketing Research
2) Marketing Strategy Development
3) Developing promotional campaign
4) Planning sales force activity
5) New product development
6) Developing proposal for financial support
7) Staff Recruitment
BUSINESS PLANNING AND DEVELOPMENT
(PROJECT FEASIBILITY)

o Effective consultant can use the project

proposal to establish exactly what the
client wants and to manage his or her
expectations about what can
realistically be achieved.
INFORMATION SYSTEMS CONSULTING
Information needed:
Business’s external situation and its
internal state.

MANAGEMENT / OPERATIONS AUDIT

Operational Audit are conducted to
evaluate the effectiveness and/or efficiency of
operations.
BUSINESS PROCESS IMPROVEMENT /
REENGINEERING
o It is the complete redesign of a process with
an emphasis on finding creative new ways to
accomplish an objective.

o It involves developing new ways to perform

existing activities and ways to stop
performing non-value adding activities.
 OTHER TYPES OF CONSULTANCY WORK

MARKETING RESEARCH
o Process through which managers
discover the nature of the competitive
environment in which they are operating.

TWO TYPES:
1. Primary Research
a. Quantitative Research
b. Qualitative Research
2. Secondary Research
OTHER TYPES OF CONSULTANCY WORK
MARKETING STRATEGY DEVELOPMENT
 Defines the approach the business will take
in order to get the customer’s attention and
get them to spend their money on the
business’s products or services

DEVELOPING PROMOTIONAL CAMPAIGNS

 Any program of activities dedicated to
informing customers about a product,
stimulating their interest and encouraging
purchase.
OTHER TYPES OF CONSULTANCY WORK

PLANNING SALES FORCE ACTIVITY

 Overall organization of the team

 Sales team training
 Sales team motivation
 Planning sales campaigns
 OTHER TYPES OF CONSULTANCY WORK
NEW PRODUCT DEVELOPMENT
 Understanding the customer’s needs through market
research
 Technical advice on product development

 Identifying and contacting suppliers of critical

components
 Development of marketing and PR campaigns to
support the launch
 Developing promotion campaigns to get distributors on
board
 Financial planning and evaluation of the return on new
product investment
OTHER TYPES OF CONSULTANCY WORK
DEVELOPING PROPOSALS OF FINANCIAL
SUPPORT
 Evaluation of the business’s investment
needs
 Identification of funding providers and how
they might be contacted
 Developing an understanding of the criteria
employed by funding providers and how
these might be addresses
 Developing communications with funding
providers
OTHER TYPES OF CONSULTANCY WORK
STAFF RECRUITMENT

 Assessing the firm’s human resource

requirement and identifying skill and knowledge
gaps
 Creating advertisements to attract the right
people
 Development assessment criteria, interview
procedures and psychometric testing of
candidates
 Advice on the reimbursement packages new
recruits will expect
OTHER TYPES OF CONSULTANCY WORK
EXPORTING AND INTERNATIONAL
MARKETING
 IN PARTICULAR THE CONSULTANT CAN
SUPPLY:

 An overall insight into regional, social and

macroeconomic development

 An analysis of the growth and evolution of

specific markets

 An evaluation of consumer needs and

requirements and how these are being
satisfied currently
 IN PARTICULAR THE CONSULTANT CAN
SUPPLY:

 Information on regulatory and legal issues

 Details of the existing supply structure and

competitors present

 An investigation into distribution channels and

possible partners

 Information on advertising and promotional

opportunities
CHAPTER 3

• Areas of Management Advisory Services- Part II

I. TRADITIONAL SERVICE

Planning

Management Controlling
Accounting

Decision
Making
 I. TRADITIONAL SERVICE
B. Design and Appraisal of Accounting System

1. Development of an accounting system for newly-organized

firm
2. Revision, partial or complete, of an existing accounting
system
3. Extension of the present accounting system to cover new
business activities.
4. Accounting service in general
5. Accounting Machines installation
6. Internal Control Studies and Installation

B. Financial Management- related services

C. Project Feasibility Studies
 II. EMERGING CONSULTANCY SERVICES
Global Risk Management Solution
 Managing totality of risks-financial, operational
and systems, and strategic to improve financial
and business performance.
1. Financial Risk Management
2. Strategic Risk Management
3. Operational and Systems Risk
Management
4. Compliance Risk Management
5. Internal Audit Services
 II. EMERGING CONSULTANCY SERVICES
Transaction Services
 Involves services related to mergers, acquisition,
divestitures, joint ventures, spin-off and strategic
alliance

Financial Advisory Services

 CPA’s provide financial, economic and strategic
advice to companies with complex business
problems and disputes.
 II. EMERGING CONSULTANCY SERVICES
Project Finance and Privatization
 Involves management advisory services related to
partnership between the public and private sectors in
delivering infrastructure and services or privatization
and project finance.

Valuation Services
 Guide clients through complex business
transaction such as acquisition or divestiture of
investment, debt structuring and finance-raising,
entry to major stock exchange, mergers.
 II. EMERGING CONSULTANCY SERVICES
Business Recovery Services
 CPA’s provide services to troubled business by
emphasizing on the implementation and
rationalization and recovery programs designed
to rebuild value.

Dispute Analysis and Investigations

 Environmental analysis, real estate damage,
investigative services, construction disputes,
investigative services, economic and financial
analysis.
 II. EMERGING CONSULTANCY SERVICES
Computer Risk Management
 Help client understand and manage their
business risks relating to implementation and use
of technology

Application Software Selection and

Implementation
 Assist clients in prioritizing their needs, identifying
the right software and tailoring it to meet their
specific requirement.
DETERMINING SCOPE OF SERVICE
1. Responsibility to establish scope of
services
2. Independence
3. Competence
4. Requirement for specialization
5. Identification and Resolution of client’s
basic problems
6. Referrals
7. Code of Professional Ethics
TYPES OF CLIENTS SERVED
Contact
Clients

Ultimate Intermediate
Clients Clients

Types of
Clients
Served

Indirect Primary
Clients Clients

Unwitting
Clients
GROUP OF CLIENTS THAT CPA’S CAN
PROVIDE MAS

1. Privately-owned Business firms

2. Governmental Agencies and Organization
3. Not-for-Profit Nongovernment Organization
4. Professional Association
5. Others
THE DECISION TO USE AN
ACCOUNTANCT
A. What can I offer the client business that will
enhance its performance and help 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

than what I offer is valuable?
PROVISIONS
Provision of Information
• Information is valuable to a business
• It has a cost
• Information is a resource that must be managed
Provision of Specialist Expertise
• Require the application of technical knowledge and
an ability to use specialist analysis techniques
Provision of a New Perspective
• Managers are not decision making automata
• 'cognitive maps', 'mindsets', or 'dominant logics' are
used by managers to see their managerial world
• Consultant can offer a fresh mind to an issue
PROVISIONS

Provision of Support for Internal Arguments

• Disagreements arise over a wide range of issues
• Conflicts of opinion take a variety of form

Provision of Support in Gaining a Critical

Resource
• Organization must attract resources in order to
survive
• One of the manager's most critical function is
attracting resources on behalf of the firm
• Consultant can be of great value in structuring a
proposal and advising on how it might be delivered
PROVISIONS

Facilitating Organizational Change

• Organizations change all the time

• Managers change their roles and responsibilities
• Change usually meets resistance
• Sometimes organizations call for change as the
primary goal of the consulting exercise
 FACILITATING ORGANIZATIONAL
CHANGE

Sometimes
organizations
Managers
Organizations Change call for change
change their
change all the usually meets as the primary
roles and
time resistance goal of the
responsibilities
consulting
exercise
Professional Attributes of Management
Consultants
Mai, M.
Lim, V.
 Professional Attributes of consultants:

According to Professor J. Owen Cherrington

• I. TECHNICAL SKILLS
• II. INTERPERSONAL SKILLS
• III. CONSULTING PROCESS SKILLS

7/21/2024
 I. TECHNICAL SKILLS
• - understanding and experience in a technical discipline.
Education Requirements:
A. TECHNICAL TRAINING
1. Length of Education
- usually an attainment of a Bachelor's degree
2. Type of Education
- programs include a technical degree and a general degree
B. COMMON CORE REQUIREMENT
1. Communications
2. Mathematics and statistics
3. Computer data processing

7/21/2024
 II. INTERPERSONAL SKILLS
• 1. INTELLIGENCE OR CAPACITY FOR LOGICAL THINKING AND REASONING
• degree of mental organization and development that enables him/herto absorb and relate
facts to reason inductively and deductively.
• 2. INTEGRITY
• moral and ethical soundness, fairness, equity, honesty, dependability
• 3. UNDERSTATING OF PEOPLE
• ability to anticipate human reactions to differing situations.
• 4. JUDGMENT
• ability and reasoning power to arrive at a wise decision
• 5. OBJECTIVITY
• unbiased, independent
• 6. COURAGE
• strength of mind and character that enables him to encounter disagreement, difficulties
and obstructions with firmness of spirit.

7/21/2024
 II. INTERPERSONAL SKILLS

• 7. AMBITION
• the desire and motivation to earn and obtain full recognition for the
attainment of professional status

• 8. PSYCHOLOGICAL MATURITY
• ability to view situations in perspective and to take action needed on a
controlled basis

• 9. PHYSIOLOGICAL EQUILIBRIUM
• a high energy level

7/21/2024
 II. INTERPERSONAL SKILLS

• 10. RELATIONSHIP BUILDING SKILLS

• An ability to build rapport and trust with the client
• An ability to question effectively
• An ability to communicate ideas succincly and precisely
• An ability to negotiate objectives and outcomes
• An ability to convince through verbal, written and visual mediums
• An ability to use information to make a case for a particular course of action
• An ability to develop selling strategies
• An ability to work effectively as a member of a team
• An ability to listen effectively
• An ability to demonstrate leadership

7/21/2024
 Common barriers to effective communication
between the client and consultant

• 1. Know-it-all-attitude and/or prejudice of some

personnel of the client
• 2. Inability to understand technical language
• 3. Inadequate background or knowledge
• 4. Resistance to change
• 5. Information overload

7/21/2024
 II. INTERPERSONAL SKILLS

• 11. PROJECT MANAGEMENT SKILLS

• An ability to define objectives and outcomes
• An ability to develop formal plans
• An ability to sequence and prioritize taks
• An ability to manage the financial resources that are to be invested in the consulting
project
• An ability to recognize the human expertise necessary to deliver the project
• An ability to manage personal time

•
7/21/2024
 II. INTERPERSONAL SKILLS

• 12. ANALYSIS SKILLS

• An ability to identify what information is available in a particular situatuion
• An ability to identify what information is needed in a particular situation
• An ability to process that information to identify the important relationships within it
• An ability to draw meaning from that information and use it to support decision-making
• An ability to recognize the business's profile of strengths, weaknesses and capabilities
• An ability to recognize the opportunities and challenges the environment offers the business
• An ability to asses the business's financial situation
• An ability to evaluate the business's markets and how they are developing
• An ability to asses the business's internal conditions
• An ability to analyze the way in which decision-making occurs within the business

7/21/2024
III. CONSULTING PROCESS SKILLS

• FOUR AREAS:
• 1. Problem definition phase
• fully describing the underlying problem. Begins with the recognition of the symptom pointing to the
problem and ends with the complete description of the problem.

• 2. Identification of Alternative Solutions

• fact-finding and analysis phase which involves the gathering of facts needed to solve the problem

• 3. Selection of the most desirable alternative

• plan
solution development phase, involves the selection of the optimal solution and developing a detailed
of the action.

• 4. Presentation
• 5. Implementation Phase
• putting the detailed plan into operation.
7/21/2024
 CHAPTER 6

ORGANIZATION AND
MANAGEMENT OF MAS PRACTICE
 ASSESS OWN
TALENTS AND REVIEW WRITTENT
EXPERTIES (AND AND ORAL
EXPERIENCE) COMMUNICATION
SKILLS

SALES ABILITY

ABILITY TO FOCUS ON
A PROJECT

ABILITY TO MAINTAIN
OBJECTIVITY
 SCOPE OF CONSULTING PRACTICE

EXPERTIES EXPERIENCE

FIELD OF EXPERTIES MAY

INCLUDE:
1. ENGINEERING
2. INDUSTRIAL
MANAGEMENT
3. MARKETING
4. BUSINESS
MANAGEMENT
5. FINANCIAL AREAS
HOW TO MAKE YOUR FIRM
SUCCESSFUL?

1. RECOGNIZE THE FIRM’S

BACKGROUND AND EXPERTIES
AND PROPERLY
COMMUNICATE IT TO THE
POTENTIAL CLIENTS. (DO NOT A. STUDY OF THE LISTINGS OF THE
MANAGEMENT CONSULTANT
OVERSELL) B. SURVEY THE LOCAL CPA FIRMS TO
DETERMINE WHICH ARE OFFERING
2. IDENTIFY MARKET CONSULTING SERVICES
OPPORTUNITIES C. DETERMINATION OF POSSIBLE
OVERSATURATION OF CONSULTANTS IN
ONE’ SPECIALTY AREA
D. IDENTIFICATION OD NEW SERVICES
THAT MAY PROVIDE A COMPETITIVE
EDGE.
ESTABLISH AN OPERATING PLAN

1. Set goals and objectives, which shall

include
1. Services to
a. Desired income level provide
b. potential clients 2. Potential
c. strategies to obtain those clients Client
2. Identify Staff requirements and 3. Amount of
financing needs Work
3. Develop meaningful and worthwhile
network
 MANAGEMENT
ACCOUNTING ADVISORY
FIRM SERVICES

SIZE
WHAT IF DEFICIENCIES EXIST?
1. IT CAN EMPLOY ADDITIONAL
CONSULTANT WITH
KNOWLEDGE AND ADEQUATE KNOWLEDGE AND
SKILLS VS NEEDS SKILLS
2. UNDERTAKE “STAFF
DEVELOPMENT” ACTIVITIES.
 STAFF PYRAMID
LEVEL 1
PARTNERS
PRINCIPAL
1
DIRECTOR
LEVEL 2
SENIOR
MANAGERS
MANAGERS 1-3
SUPERVISORS

LEVEL 3
SENIOR
CONSULTANT
SENIOR 1-5

LEVEL 4
ASSOC.
CONSULTANT
STAFF 2-6
 Organization of MAS Division

• 1. Partners, Principals, Directors- typically the most

experienced highly paid professional responsible for
the successful completion of engagements, dealing
directly with clients and for selling work.
• 2. Senior managers, managers, Supervisors-perform
week to week management of the engagements and
are responsible for identifying new client prospects
and assisting in the sales process.
 Organization of MAS Division

• 3. Senior Consultants, Seniors- typically have 2 or three

years of consulting experience and are capable of
supervising the daily work of the younger staff.
• 4. Associate Consultants, Staff- young or new staff with
usually less than two years of consulting experience and
maybe hired directly from graduate or undergraduate
school.
 Defining the Target Level of
Competence of Management
Consultants

Major factors that must be considered : 1. REVIEW THE ECONOMIC

REGION, REGION IN
1. Scope of practice area WHICH YOU EXPECT TO
DRAW YOUR CLIENTS
2. Service variety 2. 2. INVENTORY THE
SERVISES NEED BY
3. Client requirements EXISTING AND
POTENTIAL CLIENTS
3. ACQUIRE COMPETENCE
4. Service delivery capability 4. NOTIFY ACLIENTS
POTENTIAL CLIENTS
 Defining the Target Level of
Competence of Management
Consultants

Major factors that must be considered :

1. Scope of practice area
2. Service variety The range of services that
consultants typically provide is
3. Client requirements extremely broad.

4. Service delivery capability

 Defining the Target Level of
Competence of Management
Consultants

Major factors that must be considered :

1. Scope of practice area
2. Service variety Take into consideration the
particular circumstances of a
3. Client requirements client.

4. Service delivery capability

 Defining the Target Level of
Competence of Management
Consultants

Major factors that must be considered :

This is the application of
1. Scope of practice area consulting skills and without
this, even high levels of
knowledge and understanding
2. Service variety cannot be put to effective use
for clients.
3. Client requirements
(Set objective, identify
4. Service delivery capability problems, implementation,
etc)
 Steps in Starting the MAS
Practice

1. Determine and make a list of services that one can truly

offer with a confidence of competence to perform.
2. review a client list classified by industry, size, and
others, then prepare a package tailored to fie the firms
competence and a particular type of clientele.
3. Prepare a line up of Mas personnel
4 Seek out advisory engagements.
 Problem Areas in rendering MAS
by an Independent Accounting
Firm
1. Question as to the effect of the practice of MAS on
the firm’s independence
2. Development and maintenance of a high level of
competence in MAS
3. Question of what fee to charge
4. Question of AUDIT-MAS cooperation in obtaining
engagements.
5. Question of regular communication between the
MAS function and the rest of the firm.
 Financial Management of an MAS
Practice
Initial and basic capital requirements:
This will be used
1. Working Capital to pay monthly
operating
2. Office Facilities and Equipment expenses such as
Requirements salaries of
consultant, rent,
3. Revenues and Expenses supplies, utilities,
etc.
4. Billings and Collections
 Financial Management of an MAS
Practice
Initial and basic capital requirements:
1. Working Capital
2. Office Facilities and Equipment Maintenance of
office and office
Requirements expenses.

3. Revenues and Expenses

4. Billings and Collections
Business Plan for MAS Practice

• Business plan-a written summary of what the

consultant hopes to accomplish by being in
business and how to organize the resources to meet
the goals and objectives.
• Format of a Business Plan:
1. The introduction
2. The business concept
3. The financial plan
4. The appendix
 Business Plan for Mas Practice
• Introductory page- highlights the business plan.
• Business concept- begins with the description of the
industry, identifies the consultant’s market potential within
the industry and outlines the action plan for the coming
year.
• Financial plan- outlines the level of present financing and
identifies the financing sought. It contains the pro-
forma(projected ) financial forecasts.
• Appendix- contains all the items that do not naturally fall
elsewhere in the document.