MANAGEMENT
ACCOUNTING CONCEPTS,
PRACTICES, AND
STANDARDS
Group 1
Campomayor
Mahilum
Paradiang
MANAGEMENT SERVICES
refers to that practice of professional accountant concerned with
providing advice and technical assistance to help management
improve the use of resources in achieving organizational goals.
The certified public accountant who practices MAS work is
called an “advisor” or "consultant".
OBJECTIVES OF MANAGEMENT
SERVICES:
To improve efficiency
To enhance effectiveness
To simplify processes
To standardize operations
To support decision-making
CHARACTERISTICS OF MS
ENGAGEMENT:
Service is for management
Scope is broad
Future Orientation
Non-recurring
Highly Qualified Staff
Diversity
MS ENGAGEMENT PROCESS
[Link]
Identify client’s problem
Identify goals
Come to an agreement on to task to be performed
Come to an agreement on the billiing
[Link]
[Link]
[Link] of Results
[Link] of Recommendation, if applicable
[Link]-engagement Follow-up
AREAS OF MS
PRACTICE
The genesis of MS is traceable from the traditional CPA services of
auditing, tax, and financial accounting. As an extension to these
traditional services, CPAs are also made involved in activities such as:
Operational advice - counseling management in its analysis, planning, ‘organizing, operating and controlling
functions.
Special studies - conducting social studies, proposing plans and programs and providing guidance and technical
assistance in their implementation.
Organizational analysis - reviewing and suggesting improvement of policies, procedures, systems, methods, and
organizational relationships.
Innovations - introducing new approaches, methods, techniques, and concepts to management
The advisory services rendered by CPAs may be divided into two period of practices: (1) pioneering consultancy services, and (2)
emerging consultancy services.
PIONEERING CONSULTANCY SERVICES AND
EMERGING CONSULTANCY SERVICES
1. Pioneering Consultancy 2. Emerging Consultancy
Services Services
These are consultancy services that introduce new ideas, These are newer or rapidly developing areas of consulting
methods, or solutions to an organization or industry. They are that are becoming increasingly important because of changes
usually innovative and may be among the first of their kind. in technology, society, regulations, or business practices.
Unlike pioneering services, they may already exist but are still
developing and gaining wider adoption.
Pioneering consultancy services are innovative consulting
services that introduce new approaches or solutions to Emerging consultancy services are newer consulting areas
address business problems. that are gaining importance and adoption as business needs
and industries change.
Pioneering MS services: FINANCE AND
ACCOUNTING and NON-FINANCE AND
ACCOUNTING
The [Link] services are listed: The list represents the start-up services performed by CPAs in the advent of their professional advisory
services.
FINANCE AND ACCOUNTING
Financial management Management accounting Financial accounting
Establishment of capital budgeting Management accounting (i.e., cost Financial accounting system
procedures accounting) design and development
Study of cost of capital, structures Financial accounting system design
and systems financial and development
Financial analysis for project studies Management accounting design and
Establishment of operating and cash development system.
budgets Development and establishment of
Common stock valuation for budgetary controls.
purposes of mergers and sale (eg, Standard costs system development
stock price determination) Cost analysis and control
International finance, leases and Variance analysis
pensions, dividends policy, treasury
stock management, long-term credit
and financing management, and
working capital management.
Pioneering MS services: FINANCE AND
ACCOUNTING and NON-FINANCE AND
ACCOUNTING
NON-FINANCE AND ACCOUNTING
General management Organizatin and personnel
Marketing
Services of existing organizational structure
Management of operations audit
Organization and administrative manual Product profitability analysis
Measurements of operating
preparation Pricing policy and
performance
Job evaluation and salary administration determination
Mergers and acquisition studies
Development of personnel rating program Market forecasting
Development of compensation Retirement plan benefits Distribution cost analysis
program Studies of office cost reduction systems Salesmen’s incentive
Pension plan review Determining cost of alternative in collective
compensation evaluation
Special studies on industry potential bargaining agreements
Long-range planning Operating research
Industrial engineering
Production planning, scheduling and control involves the use of
Project feasibility studies
Plant layout studies mathematical techniques like
Preparation of projecy feasibility study
Inventory management studies linear programming, dynamic
Preparation of business plan
Materials control system, design and programming, Gantt chart,
Evaluation of project study’s major development Pert/CPM, queuing theory,
assumptions Development of work standards simulation analysis, regression
Evaluation of project study’s general Preventive maintenance system, design and analysis, forecasting models,
management’s aspects, marketing aspects, development
and others to solve operational
technical(engineering) aspects, financial Purchasing management including value
problems.
aspects, and sociodesirability aspects. analysis
Pioneering MS services: FINANCE AND
ACCOUNTING and NON-FINANCE AND
ACCOUNTING
The traditional advisory services are divided into two: those relating to finance and accounting
services and those not relating to finance and accounting services.
Those relating to finance and accounting include financial accounting, management
accounting, and financial management. Those not relating to finance and accounting include all
other areas rendered in the field of advisory services.
EMERGING CONSULTANCY
SERVICES
Over a stretch of several decades, the advisory services have been shifting and continuously
updating to flex in with the changes and demands of managerial environment. Other ~ services
that may be rendered depend on the practitioner's competence, technical ability and
professional integrity.
The advisory services of top global accounting firms organically change to accommodate
multifarious demands from clients outside of the traditional audit and regulatory financial
Services. The fast-paced dynamism in managerial environment, freshness of approaches,
situations, and contingencies characterizing today's business world have pushed for the changes
in the terminology used to describe advisory services
Emerging MS services:
Risk Consulting
MANAGEMENT CONSULTING Transaction and Restructuring
Accounting advisory
Corporate finance
Business performance services services
Restructuring services
Business effectiveness Financial risk management
Transaction services
Financial management
Forensic
Forensic services
People and change
Valuation services Internal audit, risk, and
IT advisory services
Business recovery services compliance services
Investment advisory services Global risk management
solutions
Dispute analysis and
investigations
A 2016 survey reported the most frequently provided consulting and advisory services include corporate advisory, management
accounting, human resources and employment regulations, business planning, business devélopment, restructuring, insolvency,
liquidation, succession transfers, forensic accounting, fraud investigation, information technology, business intelligence, enhanced
corporate reporting, wealth management, retirnement planning, health and safety, and environmental legislation. An area that has gained
widespread attention in recent years is the field of information technology, also referred to as information and communications
technology. This new emerging dimension in advisory services has been extremely critical in redefining the systems and procedures in
most industries and organizations.
MS STANDARDS
A CPA is guided by standards in the performance of his
professional practice. There are two essentials:
guided by the standards of morality and amorality,
ethics, and rules to preserve integrity.
guided by technical processes and approaches to
provide benchmarks in performance and results.
STANDARDS IN THE CONDUCT OF
MS WORK
Moral Standards - are rooted in spiritual laws,
religious teachings, and societal traditions.
Ethical Standards - govern the CPA’s relationships
with clients, colleagues, and society.
Legal Standards - promote compliance, fairness,
and justice.
FUNDAMENTAL PRINCIPLES FOR
CPA’S IN THE PHILIPPINES
Integrity - is the baseline of MS professional practice.
Objectivity - is fairness and balance.
Professional Competence - refers to the practitioner’s technical
qualification to perform.
Due care - defines the manner a practitioner conducts services.
Confidentiality - core to the professional domain of accountancy is
the value and the confidentiality of communication.
Professional Behavior - professional CPA’s are principally expected
to promote the “right thing” more than “doing the things right”.
TECHNICAL STANDARDS
A professional accountant should carry out professional
services in accordance with the relevant technical and
professional standards. They should conform with the
technical and professional standards of the following:
Board of Accountancy (BOA) and Professional Regulation Commission
(PRC);
Securities and Exchange Commission (SEC)
Auditing Standards and Practices Council (ASPC);
Accounting Standards Council (ASC); and,
Relevant legislations.
STANDARDS FOR CONSULTING
SERVICES
The American Institute of Certified Public Accountants has issued
the Statement on Standards for Consulting Services (SSCS) and
provides standards of practice for a broader range of professional
services relating to consulting services. Fundamentally, Rule 201 of
the AICPA Code of Professional Conduct identified the controlling
standards as follows:
Controlling Standards
Additional General Standards
CONTROLLING STANDARDS
Professional competence
Due professional care
Planning and supervision
Sufficient relevant data
ADDITIONAL GENERAL STANDARDS
Client Interest
Understanding with Client
Communication with Client
THANK YOU
Thanks For Listening