Topic I: Management Advisory
Services and Professional Ethics
MAS in the CPA Profession
Management Advisory Services – the area of accounting concerned with providing advice and technical
assistance to help clients improve the use of their resources to achieve their goals. This is also called
Management Consulting Services/Business Advisory Services/Management Services.
Management Consulting – an independent and objective advisory service provided by qualified persons
to clients in order to help them identify and analyze management problems and opportunities
Activities include:
• Consultations – providing advice and information during a short time frame
• Engagement – An analytical approach and process applied in a study or project
o Ascertaining facts and circumstances
o Seeking and identifying objectives
o Defining the problem or rooms for improvements
o Evaluating and determining possible solutions
o Presenting findings and recommendations
o Implementing appropriate solutions
Professional Attributes
• Technical Skills (Accounting and Financial know-how, Administrative Knowledge, Tech Savvy)
• Interpersonal Skills (Communication and Relationship Skills)
• Consulting Process Skills (Creativity and Analytical Skills, Problem Solving)
Consulting Process
Identify Selecting
Define the Pitch the Implement
Alternative the Best
Problem Solution the Solution
Solutions Alternative
***MECE Model from McKinsey Consulting – MECE stands for Mutually Exclusive, and Collectively
Exhaustive; the MECE principle suggests that to understand and fix any large problem, you need to
understand your options by sorting them into categories that are: Mutually Exclusive– Items can only fit
into one category at a time and Collectively Exhaustive – All items can fit into one of the categories.
Systems Development Life Cycle
Closely tied to the consulting process is the SDLC, which is the bread and butter of any Transformation
Engagement that consultants are usually hired for.
Conceptual Design Operation and
System Analysis Physical Design Implementation
and Documentation Maintenance
• The SDLC is concerned with generating business improvements. Thus, Business Process Analysis
is conducted to determine business needs, gaps, and their appropriate solutions. Diagrams and
Flowcharts are a staple in consulting work; hence it is necessary that the basics are mastered.
• Some examples of BPA include:
o Inquiry, Observations, and Inspection of Documents, Reperformance, Analytical Procedures,
Materiality assessments, (like in audit) and Maturity assessments
o Flowcharting and Process Mapping
o Identifying value-adding and non-value-adding activities
o Time-and-motion studies
• In some cases, the usual steps in SDLC are not done in order or that there are innovations that
are implemented. The typical SDLC is considered a ‘Waterfall’ approach to managing projects
for consulting. New ways of working such as the ‘Agile’ methodology are quickly catching pace.
Moral Philosophies
Ethics can be learned, and practiced, much like any other skill. We do it subconsciously to some degree,
but being intentional with living through an ethical life is actually challenging, especially when we
consider that we have to consider the information available to us, and that we must account for things
even beyond our control; and so it becomes difficult to be conscientious about moral decisions. Here are
some guides:
Morality ≠ Virtue
• Morality is the rule that we apply. It answers what we ought to do.
• Virtue is the character traits. It answers who we ought to be.
Teleology Deontology Virtue Ethics Utilitarianism Relativism Justice
Purpose- Duty-driven, How a virtuous Which choice Individual – Platonic –
driven, end categorical person would benefits the you create Case-by-case
goal imperative decide most good for your codes. justice
the most Cultural – your
people culture Aristotelean –
decides your Consistently
code applied across
any case
Decision-making is a process and not an outcome. There are qualities listed below:
• Fairness – A decision involves a transparent process that emphasizes empathy for all those
affected. It makes any decision sustainable enough that those involved will understand and
support the decision in the future.
• Integrity – A rule is consistently applied to an individual’s moral philosophy. Hypocrisy is not
tolerated, and a process is holistic and complete.
• Due Diligence – A decision is very well-informed by facts and circumstances surrounding the
decision. It means to consider perspectives that one may overlook. It also means to operate
around a compliance framework.
• Fiduciary Responsibility – This is particular for finance professionals, whose duty are to the
stakeholders of the firm.
Resolution of Ethical Dilemmas in Engagements
The IMA sets out a guideline that Management Accountants must follow in performing engagements,
these were also adapted by the Philippine Standards on Auditing concerning Consultancy engagements.
(See Auditing Theory – Code of Ethics of Professional Accountants)
In the face of an ethical dilemma, these are the steps to take:
•Take action over the Fraud (Be rational and thoughtful; do not ignore the situation)
1
•Evaluate Personal Risks
2
•Follow your organization's policies (Determine internal ethics or whistleblowing mechanisms
3 internally first)
•Discuss with an immediate supervisor
4
•Involvement in fraud by the supervisor means to go up one level
5
•Use the IMA Ethics Hotline
6
•Consult your own attorney
7
•If needed, resign from your organization
8
IMA Ethical Standards
The Ethical standards governing the Management Accounting profession is provided by the Institute of
Management Accountants (IMA). It provides the following principles and standards:
Principles Standards
Honesty – staying true to what actually Competence – having the skills and
happened in an event in their capabilities to deliver quality work
communications, analyses, and work and leadership
Fairness – balanced without bias in Confidentiality – judgment on
work and professional relationships appropriate disclosure of information
Objectivity – analysis should be Integrity – standing firm on what is
reasoned, thorough, and dispassionate right
Responsibility – Upholds the standards Credibility – conformance to ethical
herein stated and professional standards
Principles are to be understood as the reason why the standards are in place. In other words. Principles
set the direction, while standards are the driving force toward quality and professional work ethics.
Quite essentially, adherence to ethical standards is a very personal endeavor. It affects even our personal
relationships, our personal ‘brand’ or name, and the world around us.
Some considerations to look into when making decisions:
‘Will my loved ones be honored ‘How will my reputation be ‘How will the people around me
when this choice is made?’ impacted when this decision is take or perceive the decision I
made made?’
Organizational Considerations for Ethics
Compliance Considerations Business Sustainability Social Responsibility
Compliance with Laws and Business sustainability Carroll’s CSR Pyramid mainly
Regulations should always be contemplates which concerns talks about the order of priority
considered in decision-making should take priority over for an organization wanting to
Compliance with Ethical others. When people needs, expand. In a nutshell, as an
Standards such as thru the IMA planet needs, and profit needs organization becomes more
and the Ethics Committee of are all met, the business is said successful, it starts to add
the Professional Regulation to be sustainable. This further responsibility to itself
Commission objective is known as the triple to comply with corporate social
Other pertinent rules and bottom line. responsibility.
regulations
Carroll’s CSR Pyramid
The triple bottom-line