San Beda University

College of Arts and Sciences

Department of Accountancy
ACC14: Managerial Accounting Part 1

Management Consultancy Services by CPAs M. B. Guia

Part 1: Nature of Management Consultancy

A. Auditing B. Consultancy
1. The objective is to render an opinion
2. The beneficiaries of the services rendered are third party
3. Uses historical data in order to come up with futuristic data
4. The objective is to solve a problem
5. Usually non-recurring
6. Utilizes a mixture of experienced and inexperienced staff
7. Deals with past/historical data
8. The beneficiaries of the services rendered are internal members of the organization
9. Usually recurring on an annual basis
10. Utilizes highly experienced staff

Part 2: Professional Attributes

A. Technical Skills B. Interpersonal Skills C. Consulting Process Skills
1. Capacity for logical thinking and reasoning
2. Problem Definition
3. Courage
4. Presentation Skills
5. Ambition
6. Mathematics and statistics
7. Psychological maturity
8. Relationship-Building Skills
9. Selection from alternatives given
10. Masteral Studies
11. Certifications (i.e. Certified Management Accountant, Certified Internal Auditor)
12. Integrity
13. Constructions of Alternatives
14. Physiological Equilibrium
15. Languages

Part 3: Areas of Management Consultancy

A. Finance and Accounting B. Non-Finance and Non-Accounting
1. Establishment of Budgetary System
2. Plant Lay-out study
3. Total Quality Management System Review
4. Product Development
5. Construction and Analysis of a Capital Budget
6. Product Costing
7. Human Resource Policy on Hiring, Advancement, and Termination
8. Review of Credit and Collection Policy
9. Financial Statement Analysis
10. Collective Bargaining Agreement

Part 4: Stages of Management Consultancy Engagement

A – Negotiating the engagement C – Conducting a consultancy assignment
B – Engagement Planning D – Evaluating the engagement
1. Determining the objectives and a description of each task to be accomplished
2. Problem identification and desired outcome
3. Issuance of a proposal letter
4. Determination of deficiencies in the consultant’s activities
5. Providing a means for arranging, distributing, and assigning responsibility for various segments in the
engagement.
6. Generation of alternative solutions
7. Identification of suitable and accurate sources of information and data gathering
8. Determination of the scope and role of the management consultant
9. Determination of errors, if any, occurring during an interim or final reports
10. Determination of the starting and completion dates
11. Data analysis and diagnosis
12. Identifying deviations from work schedules and the reason for such.
13. Preparation and presentation of the report and recommended solutions
14. A description of the tangible output required at completion of each task
15. Fees and Billing Arrangement