Chapter 3: Areas of Mai, M.

Management Advisory Lim, V.

Services
Management Consultancy Services by CPAs:
TRADITIONAL SERVICES

1. Managerial 2. Design & 3. Financial 4. Project

Accounting Appraisal of Management- Feasibility
Accounting related services Studies
System
Financial Statements Development of an Study of WC
Analysis accounting requirements
Budget Preparation system(new) Methods of financing
Cost Analysis Revision of an asset acquisitions
Variance Analysis existing system Credit and collection
Extension of present studies and advice
system Analysis of capital
Management Consultancy Services by CPAs:
EMERGING CONSULTANCY SERVICES
5. Global Risk Management Solution involves managing the
totality of risks to improve financial and business performance.
Areas include: Area Example
Financial Risk Management Measurement of risk-adjusted
return on capital
Strategic Risk Management Review of whole business unit so
that risks of operation can be full
understood
Operational and Systems Risk Controls and assurance services
Management
Compliance Risk Management Review of compliance with
regulatory requirements and
ethical conduct standards
Internal Audit Services Assessment of units
performance against professional
standards and peer organization
Management Consultancy Services by CPAs:
EMERGING CONSULTANCY SERVICES

6. Transaction services involve services related to mergers,

acquisition, divestitures, joint ventures, spin-off and strategic
alliance.
7. Financial Advisory Services provide comprehensive,
financial, economic and strategic advice to companies with
complex business problems and disputes.
8. Project Finance and Privatization related to partnership
between the public and private sectors in delivering
infrastructure and services or privatization and project finance.
9. Valuation services service that guide clients through
complex business transactions(e.g. acquisition or divestiture of
investment, debt restructuring, entry to major stock exchange,
mergers.
Management Consultancy Services by CPAs:
EMERGING CONSULTANCY SERVICES

10.Business recovery services provide services to troubles

businesses by emphasizing on the implementation and
rationalization and recovery programs designed to rebuild value.
11.Dispute analysis and investigation e.g. environmental
analysis, investigative services, real estate damage.
12.Computer risk management - help client understand and
manage their business risks relating to he implementation and
use of technology.
13.Application software and selection and implementation
assist clients in prioritizing their needs, identifying the right
software and tailoring it to meet their specific requirement.
Determining the scope of
services
The accounting firm has the responsibility to determine the
scope of services it is competent to offer to the public
CPA rendering MAS and at the same time serving the same client as
independent auditor must not make managerial decisions which could
impair his objectivity and independence.
Firms must be competent enough to provide services which involves
choosing staff personnel having both the technical qualifications and
ability to supervise and evaluate the quality of work performed.
The requirements for specialization in certain areas may limit the
scope of MAS offered by any given independent accounting firm.
Determining the Scope of
Services
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.
The referral of MAS work could provide for an effective means by
which firms could develop cooperation and expanding their
knowledge and scope of services toward providing the full range of
MAS.
It is the responsibility of the independent 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
1. Contact Clients person who first approaches the consultant and proposes that
the consultant address the problem on behalf of the organization.
2. Intermediate clients members of the organization who become involved in
the consulting project. They may be the actual recipients of the report.
3. Primary clients person who have identified the problem or issue and are most
immediately affected by it. It is them who will be willing to pay in order to have
the issue solved.
4. Unwitting clients members of the organization affected by the intervention of
the consultant. They are not aware that they will be affected by the project.
5. Indirect clients members of the organization affected by intervention and are
aware that they will be affected. However, the consultant is unaware that the
project will have an impact on them. They can be very influential and can
facilitate or hinder the progress of the project.
6. Ultimate clients total community that will be affected by the consultants
intervention.
CLIENTS THAT CPAs CAN
PROVIDE MAS TO:
1. Privately-owned business firms merchandising, manufacturing,
banking, transportation, insurance, etc.
2. Governmental agencies and organization BIR, SEC, Bureau of
Customs, Department of Health, DENR, etc.
3. Not-for-profit nongovernmental organizations hospitals,
research institutions and charitable institutions for the purpose
of proper raising of funds and revenues while reducing costs.
4. Professional associations Associations organized by
professionals(lawyers, medical doctor, etc.)
5. Others labor unions , sports organizations, and religious
prganizations.
How consulting adds value
Hiring a consultant involves Apply analytical,
IMMEDIATE FINANCIAL COST
DISRUPTION OF MANAGERS ROUTINE project
management and
Therefore, why should a business manager hire a consultant?
relationship-building
COST-BENEFIT ANALYSIS. Would the benefits derived by hiring a
consultant outweigh the costs of hiring him/her? skills
Management consultant constantly asks himself:
a)What can I offer the client business that will enhance its
performance and help it achieve its objectives?
b)Why will my contribute on 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?
Actual Output of Consulting
Exercise Centers on
1. Provision of information
Customers needs and buying behavior;
Products design, technology, and development;
Market size, growth, dynamics

2. Provision of Specialist expertise Application of technical

knowledge and ability to use specialist analysis techniques.
3. Provision of a New Perspective Consultants can offer a fresh
mind to an issue and decrease the cognitive schema of the
managers. They can also offer support in helping individuals and
groups become more innovative in their thinking by using
creativity techniques.
Actual output of consulting
exercise centers on
4. Provision of Support for Internal Arguments A consultants
opinion is of clear value as it can be presented as independent
and coming from an expert.
5. Provision of Support in Gaining a Critical Resource The
consultant can offer the client business valuable in gaining
resources such as: goodwill of customers, capital from investors
or government support agencies, skilled and knowledgeable
people, and specialist. The consultant can be of great value in
structuring a proposal and advising on how to deliver strategy on
getting these resources.
6. Facilitating Organizational Change The effective consultant
must be aware of the human dimensions to the change he or she
is advocating and be competent in addressing the issues it
creates.
 Chapter 4: Professional Mai, M.
Attributes of Management Lim, V.

Consultants
Professional Attributes of
consultants:
According to Professor J. Owen Cherrington

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

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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
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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.

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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

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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

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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

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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

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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

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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

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

4. Presentation
5. Implementation Phase
putting the detailed plan into operation.

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Source:
Management Consultancy: Principles and Engagements
Ma. Elenita B. Cabrera 2015

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