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MSQ 13
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MSQ 13
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16. The chief management accountant called controller traditionally performs these functions except:
a. The establishment and implementation of the financial planning process.
b. Financial and management reporting and interpretation.
c. Protection of company resources and economic evaluation.
d. Preparation of proposals for product promotions.
17. As business increase in complexity, the function of controllership has attained top level recognition
in the corporate area. Many areas related to finance and accounting have been identified with
controllership. One area that becomes controversial when included under the controller and viewed
that such inclusion violates basic internal control is
a. Credit and collection.
b. Internal auditing.
c. Long-range financial planning.
d. Taxation and reporting to government agencies.
18. Which of the following is not usually a controllers function?
a. Planning for control.
c. Tax administration.
b. Protection of assets.
d. Credit and collection.
19. Which of the following is not a Controllers function?
a. In charge of planning and control
b. Protection of assets such as adequate insurance coverage. Etc.
c. Interpreting and reporting on effects of external factors on the business
d. Arranging short-term financing
20. Controllers are generally not concerned with
a. Reporting to government
b. Preparation of tax returns
c. Protection of assets
d. Investor relations
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25. Which of the following acts is not performed by an independent CPA engaged to install an
accounting system?
a. Formulation of the chart of accounts
b. Design of business and accounting forms
c. Supervision of application of system and procedures recommended
d. Preparation of an accounting manual.
26. The following characterize management advisory services except
a. Involve decision for the future.
b. Broader in scope and varied in nature.
c. Utilize more junior staff than senior members of the firm.
d. Relate to specific problems where expert help is required.
27. Which of the following is not a characteristic of management services?
a. A wider variety of assignments are encountered in MAS than in audit.
b. MAS engagements are recurring.
c. MAS pinpoint actions to be taken, the benefits of which will be received in the future.
d. In MAS engagements, the nature of work involved requires a lesser need for junior assistance.
28. Which of the following is not a characteristic of Management Advisory Services?
a. MAS is broad in scope
b. MAS involves problem-solving affecting the future operations of the client
c. Beneficiary of service is management
d. MAS is repetitive as far as the same client is concerned
29. Which of the following types of management services is normally related to accounting and finance?
a. Management audit.
b. Marketing forecasts.
c. Costs determination of alternatives in collective bargaining agreements.
d. Job evaluation and salary administration.
30. Which of the following types of management services is not directly related to accounting and
finance functions?
a. Cost analysis of major investment decision.
b. Long range planning.
c. Design, installation and review of budgetary system.
d. Valuation of capital stock of companies for purposes of merger or sales.
31. A certified public accountants scope of management services is broad and covers all of the
following except
a. Change management engagements.
c. Audit engagements.
b. Computerization engagements.
d. Re-engineering jobs.
32. Which of the following is not classifiable as a management advisory service by CPAs?
a. Systems design.
c. Make or buy analysis.
b. Project feasibility study.
d. Assistance in budgeting. (?)
33. Which of the following is not classifiable as a management advisory service by CPAs?
a. Annual financial planning and budgeting. c. Information systems.
b. Public relations work.
d. Lease-or-buy analysis.
34. Management services of certified public accountant cover all of the following except
a. Project feasibility studies.
c. Organizational development and planning.
b. Systems design, development and implementation.
d. Audit, tax and legal services.
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35. Which of the following does not relate to management services by CPAs?
a. Design and/or installation of accounting systems. c.Cost analysis of major investment decisions.
b. Financial analysis for project feasibility studies.
d. None of the above.
36. Which of the following is not an area related to the performance of management services by
independent accounting firms?
a. Introducing new ideas, concepts and methods to management.
b. Improving existing policies, methods and procedures
c. Performing special studies, preparing recommendations, and formulating plans and programs
d. Performing management functions and making decisions
37. A management advisory services engagement involves the following activities in what order?
I. Post-engagement follow-up.
II. Implementing the recommendation.
III. Conducting the engagement.
IV. Negotiating the engagement.
V. Preparing for and starting the engagement.
VI. Evaluating the engagement.
VII. Preparing and presenting report and recommendations.
a. VII, VI, V, IV, III, II and I.
c. IV, III, V, VI, II, VII, and I.
b. III, IV, V, VI, VII, I and II.
d. IV, V, III, VII, II, VI, and I.
38. The following statements refer to competence of CPAs in management advisory services except
a. In concept it refers to the technical qualification of the practitioner and his ability to supervise
and evaluate the quality of work of his staff assigned to the engagement so as to be responsible
for the successful completion of the project.
b. It is acquired by education, self study, attendance to professional development courses, actual
experience in MS work and research.
c. It is the ability to identify clients needs, use analytical approach and process, apply technical
knowledge, communicate recommendations and assist in implementation.
d. It must be retained in the rendition of MAS work and it can be impaired if the CPA performs
decision-making for the client or acts as employee of the client.
39. Which of the following statements is True?
a. Adequate training and experience in both the analytical approach and process in the particular
undertaking are requisites for the CPA to be involved in a management service engagement.
b. A CPA with MBA and PhD degrees is automatically qualified to render management services.
c. Competence as a standard in the rendition of management services by a CPA may be equated to
having excellent scholarly preparation to include the usual baccalaureate degree, an MBA, and
other post graduate studies.
d. A certified public accountant by virtue of having the necessary academic preparation and by
hurdling the licensure examinations required to have a CPA license can readily render
management services to the public.
40. These statements relate to MAS practice standards
1. A practitioner is to notify the client of any reservation he has regarding anticipated benefits.
2. Throughout the engagement, there ought to be a systematic critical review of
accomplishments and work should be done within the framework of the code of ethics and
other professional standards.
3. During the engagement, should there be a significant change between cost and anticipated
benefits, the client should be informed.
4. Before the engagement, the practitioner must make arrangements with, and inform the client
on significant matters related to engagement, in writing.
Of these statements, which pertain to the practice standard on client benefit?
a. Statements 1 and 3 only.
c. Statement 1 only.
b. All statements.
d. Statement 1, 3 and 4 only.
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MSQ 13
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47. Which of the following acts is not performed by an independent CPA engaged to design the
accounting system?
a. Formulation of the chart of accounts.
b. Design of business and accounting forms.
c. Supervision of implementation of system and procedures recommended
d. Preparation of an accounting manual.
48. Which of the following will not impair the independence of a CPA in the rendition of Management
Services?
a. The CPA performs decision-making services for his client.
b. The CPA performs services wherein he is in effect, acting as an employee of the client.
c. The CPA loses his objectivity and acts in a manner as if he is advocating for the interest of his
client.
d. The CPA does not extend his services beyond the presentation of recommendations or giving of
advice.
49. A CPA should reject management advisory services engagement if
a. It would require him to make management decisions for an audit client.
b. The proposed engagement is not accounting related.
c. His recommendations are to be subjected to a review by the client.
d. He audits the financial statements of a subsidiary of the prospective client.
50. After preliminary audit arrangements have been made, an engagement confirmation letter should be
sent to the client. This letter usually should not include
a. An estimate of the time to be spent on the audit work by audit staff and management.
b. A reference to the auditors responsibility for the detection of errors and irregularities.
c. A statement that management advisory services would be available upon request.
d. A statement that management letter will be issued outlining comments and suggestions as to any
procedures requiring the clients attention.
ANSWER KEY
1. C
2. B
3. B
4. B
5. A
6. B
7. D
8. C
9. C
10. C
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
C
A
A
D
B
D
B
D
D
D
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
A
B
C
C
C
C
B
D
C
B
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
C
D
B
D
D
D
D
D
A
A
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
D
C
A
A
B
C
C
D
A
C
MSQ 13
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