Consultancy Reviewer

Consultancy Reviewer CHAPTER 1: Overview of Management Consultancy Services by CPAs 1.

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Which of the following statements is false? a. New developments and transformations could result to management consulting becoming more specialized. b. It is predicted that a consultant’s orientation will be towards being an insight-provider, creator and sharer of information. c. As a consultant grows in number, they tend to develop more sophisticated means of marketing their services. d. Because of the more stringent and technical qualifications required in management consulting, more not-so-bright graduates of accounting, management and business schools will be attracted to careers in this area. D Most definitions of consultancy would include such services related to the following except a. Information Technology b. Corporate Strategy c. Legal Advisory d. Systems and Operations Management C Which of the following statements is incorrect? a. A consultant is hired because generally he is considered independent, objective and detached to the problems faced by the organizations. b. An experienced management consultant possesses special knowledge, skills and a variety of personal attributes that make him the most desirable candidate to undertake management consulting engagement involving his area of expertise. c. The use of consultants is generally much more expensive to the company than hiring full time new managers and employees to provide professional advisory services. d. A consultant is considered a catalyst for change that can assist management in the administration of the business entity. C The actual output of a consulting engagement centers on providing the business organization with the following except a. Valuable information b. Support for internal arguments c. Support in acquiring a critical resource d. Support for contesting tax assessments by the BIR D Which of the following statements is false? a. CPAs have historically been business consultants to their clients. b. Management consultants are licensed and regulated by laws. c. The primary purpose of management consultancy is to improve the firm’s use of its capabilities and resources to achieve its objectives. d. Management consultancy services are provided not only to big business enterprises but also to medium-size and small companies. B

CHAPTER 1: Overview of Management Consultancy Services by CPAs 1.

2.

3.

Which of the following is not belonging to the traditional areas of expertise for CPA firms? a. Management consultancy b. Income tax work c. Accounting system design and installation d. Technical Development D It is a career structure in consulting firm where it needs to have 5-10 years of consulting experience. a. Analyst b. Consultants c. Senior Consultants/Managers d. Business Development Managers D They are involved in some large, complex consulting projects, and they are the one responsible for building relationship with their clients a. Consultants b. Analyst c. Business Development Managers

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Directors / Partners C It is described as independent and objective advisory service provided by qualified persons to clients in order to help them identify and analyze management problems or opportunities a. Management Advisory Services b. Management Consulting c. Accounting Firms d. Outsourcing Firms B It consists of that form of management advisory or consulting service in which an analytical approach and process is applied in a study or project. a. Engagement b. Technicality c. Consulting d. Processing Approach A Most definitions of consultancy would include the following, EXCEPT a. Corporate strategy b. Strategic management c. Consulting and System Integration d. Outsourcing B Give the 4 traditional areas of expertise in CPA Firms AUDITING MANAGEMENT CONSULTANCY INCOME TAX / TAX ADVISORY SERVICES ACCOUNTING SYSTEM DESIGN AND INTALLATION

Chapter 2 1.

The following are classifications of problem, except: a. Corrective b. Service delivery area c. Progressive d. Opportunistic

2.

A problems that involves a situation in which conditions have worsened a. Opportunistic b. Progressive c. Corrective d. Techniques

3.

It refers to the location of the engagement a. Industry or Nature of Organization b. Application of the Analytic Process c. Geographical Areas d. Techniques and Methodologies

4.

A way of carrying out a particular task a. Methodologies b. Techniques c. Geographical Areas d. Industry or Nature Organizations

5.

The following are the types of consultancy, except: a. Business planning and development (Project feasibility studies) b. Internal audit services c. Information systems consulting d. Nature of the problem

6.

It is the complete redesign of a process with an emphasis on finding creative ways to accomplish an objective a. Reengineering b. Business process

c. d.

Methodologies Marketing Research

7.

A type of marketing research that provides answers to questions when those answers need to be expressed in statistical or numerical form. a. Quantitative Research b. Qualitative Research c. Secondary Research d. Primary Research

8.

A type of marketing research that provides answer to questions that do not demand a quantified answer. a. Quantitative Research b. Qualitative Research c. Secondary Research d. Primary Research

9.

An audit which is conducted to evaluate the effectiveness and efficiency of operations. a. Internal b. Operational c. External d. None of the above

10. ________ Auditing is an independent, objective assurance and consulting activity design to add value and improve an organization’s operations. a. Internal b. Operational c. External d. None of the above Chapter 3 Stages of Management Consulting Engagement (Part 1) 1.

An engagement program contains the following except a. Engagement objectives b. List of manpower required c. Description of tasks to be accomplished d. Amount of fees to be earned for each tangible output completed

2.

The objectives of an engagement program include the following except a. To facilitate time and efficiency control over personnel assigned to the engagement. b. To provide a means for arranging, distributing and assigning responsibility for various segments of an engagement. c. To provide a means for evaluating whether all segments of the engagement has in fact been completed. d. To provide a means of determining exactly how much and when to bill the client.

3.

Information about product pricing and costing could be easily make available by the a. Marketing department b. Production department c. Personnel department d. Accounting department

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Information on types of new products or services with market possibilities are usually provided by the a. Marketing department b. Production department c. Personnel department d. Accounting department

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Which of the following is generally not considered an effective technique of gathering facts? a. Interviews b. Questionnaires c. Observation d. Cutoff procedures

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An analysis strategy whereby numbers are combined in order to understand how they relate to each other. a. Categorization b. Classification c. Numerical analysis d. Correlation

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An analysis strategy whereby data, facts or items are sorted into different groups by virtue of their features thereby leading to identification of the significance of the information. a. Categorization b. Classification c. Causation d. Association

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In performing this analysis, the preferable procedure is to begin at the top level and then work down to the lowest activity level. a. Unstructured analysis b. Input/output analysis c. Structured analysis d. Decision level analysis

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A fact gathering technique that provides a pictorial representation of a dimension of the client’s organization or of its activities. a. Charting b. Document gathering c. Observation d. Interview

10. Stage where the CPA and the client discuss the proposed professional consulting services. a. Engagement planning b. Negotiating the engagement c. Consulting assignment d. Implementation ANSWER: 1. D 2. D 3. B 4. A 5. D 6. C 7. A 8. C 9. A 10. B Chapter 4 1.

2.

A personal attribute of consultant that refers to his/her ability to view situations in perspective and to take action needed on a calm and controlled basis without being diverted from a sound, logical and ethical course by outside pressure. a.

Psychological maturity

b.

Courage

c.

Physiological equilibrium

d.

Judgment

Ability to define objectives and outcomes is an example of a consultant’s a.

Relationship-building skills

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b.

Project management skills

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Analysis skills

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Interpersonal skills

Project management skills require the following except a.

Ability to define objectives and outcomes

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Ability to develop formal plans

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Ability to sequence and prioritize tasks

d.

Ability to accept numerous clients that will enable him/her to generate more income thereby spreading himself/herself too thinly.

A personal attribute of a consultant that refers his/her ability to anticipate human reactions to differing situations and establish friendly relations and mutual confidence with people at all levels and to recognize and respect the rights of others. a.

Integrity

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Capacity for logical thinking and reasoning

c.

Empathy

d.

Ambition

Ability of the consultant to focus and direct the individuals in an organization in a way that brings the whole organization benefits. a.

Ability to develop selling strategies

b.

Ability to demonstrate leadership

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Ability to work effectively as a team member

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Ability to build rapport and trust with the client

According to him, management consultant must possess the four broad areas of skills. a.

Professor J. Owen Cherringtonn

b.

Professor J. Owen Cherrington

c.

Professor J. Owen Cherington

d.

Professor J. Owen Cherringtone

One of the broad areas of skills that involve the ability to understand and use the following approach in solving business problems. a.

Technical skills

b.

Interpersonal skills

c.

Consulting process skills

d.

Consulting skills

Broad areas of skills of a management consultant Technical skills Interpersonal skills Consulting process skills

Chapter 5 1.

A CPA after presenting his report in a management services engagement may accept further engagement to render advice and technical assistance in the implementation of his recommendation. TRUE

2. A non-CPA is prohibited under the revised accountancy law to engage in professional management advisory services practice. FALSE 3. Documentation is not as essential in an MAS engagement as it is in audit engagement. FALSE 4. Due professional care may or may not be exercised in the performance of a management advisory service engagement. FALSE 5. Before accepting an engagement, a practitioner is to inform his client of some if not all of the significant matters related to the engagement. FALSE 6.

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To attain the highest standards of professionalism, highest levels of performance and meet public interest requirement, a CPA who provides management consultancy services should meet the following basic requirements except: a.

Credibility

b.

Professionalism

c.

Confidence

d.

Top of the line and world class facilities.

To achieve the objectives of the accountancy profession, professional accountants including those providing management advisory services should observe among others the following principles except: 1.

Integrity

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Confidentiality

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Knowledge of up-to-date technical and professional standards.

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Careful selection of clients to include only those big and financially capable business entities.

It is a highly personal characteristic which ensures that practitioner’s statements of findings and recommendation are free of intentional distortions or misstatements. a.

Objectivity

b.

Independence

c.

Integrity

d.

Confidentiality

It is the translation of engagement objectives into a structured set of activities and events within a targeted time schedule. a.

Planning

b.

Supervision

c.

Control

d.

Implementation

10. The ability to identify and define client needs, to utilize the analytical approach and process, to apply knowledge of the technical subject matter under consideration, to communicate recommendations effectively and to assist in implementing the recommendations. It is acquired and maintained through a combination of education and experience. 1.

Due care

2.

Professionalism

3.

Competence

4.

Independence

Chapter 6 1) This individual is normally responsible for the successful completion of engagements, dealing directly with the clients and for “selling” work of consultancy services. a.

Senior managers

b.

Senior consultants

c.

Partners

d.

Supervisors

2) Factors that must be considered when defining the target level of competence of management consultants include the following except: a.

Scope of practice area

b.

Client requirement

c.

Service variety

d.

Investment required

3) Before entering a consulting practice, the prospective consultant should conduct market research to identify opportunities in the market place. This will involve the following except: a.

Study of the listing of actively practicing management consultants

b.

Survey of local CPA firms to determine which are offering consulting services

c.

News release in Philippine Daily Inquirer about the opening of the consultancy firm

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Identification of new services that may provide a competitive edge.

4) In developing MAS practice, goals and objective should include: a) desired income level b) potential clients c) strategies to obtain clients d) all of the above 5) The primary source of MAS engagements of the CPA. a) Audit client b) Individuals c) Senior Consultants d) Private Sector

6) Service delivery is the application of consulting skill and without this, even high levels of knowledge and understanding cannot be put to effective use for clients. TRUE 7) Management advisory services of an accounting firm may be rendered by a man who is primarily an accountant or by a specialist. TRUE 8-10)

Give atleast 3 fields of technical consultation in developing MAS practice.

 Engineering  Industrial management  Marketing  Business management  Financial areas Chapter 7

Chapter 8 1.Solution development phase of the problem-solving process involves the following steps 1. Detailed development of the selected solution. 2. Choice of the preferred solution alternative. 3. Evaluation of solution alternative. 4. Generation of solution alternative. In what order should the above-listed activities be performed? a 1,2,3,4 . b 4,3,2,1 . c 2,1,3,4 . d 4,3,1,2 . ____

____

2. a . b . c . d .

The following can generally conduct a post-implementation evaluation except special audit team selected from among the managers of the client organization.

3. a . b . c . d .

What of the following is not belong in Generation of Alternative Solutions? Delphi approach

an internal audit team. external team of consultants. independent external audit team.

Decision tree approach Brainstorming approach Pattern recognition and matching approach.

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4. Which typically employs one of the mathematical techniques such as linear programming, integer programming, and dynamic programming. a Optimizing approach . b Satisficing approach . c Rationality approach . d Delphi approach .

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5. a .

b .

c .

Which of the following is an example of Rationality approach?

d .

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6. This involves the determination if the alternative solution can be rendered operational by a specified time and/or date in order to achieve certain objectives or avoice certain consequences. a Scheduling feasibility . b Operational feasibility . c Technical feasibility . d Legal feasibility .

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7. This approach emphasizes experience especially thise having very similar characteristics to the problem situation being investigated. a Pattern recognition and matching approach . b Brainstorming approach . c Delphi approach . d SCAMPER approach .

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Which of these following is not true about the Expected Value Computation?

(A) weighting the outcomes for the states of nature by the probabilities of occurrence (B) adding up the weighted outcomes to obtain the expected value of the payoff for each solution alternative. (C) choosing the solution alternative having the maximum expected payoff. a . b . c . d .

B C A All statements above are true.

MULTIPLE CHOICE 1. ANS: B

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2. ANS: D

PTS:

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3. ANS: B

PTS:

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4. ANS: A

PTS:

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5. ANS: B

PTS:

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6. ANS: A

PTS:

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7. ANS: A

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8. ANS: D

PTS:

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Chapter 9 1. It serves as the nucleus of a consulting engagement and provides a guide to staff assignment and completion dates. 2. This will play a key role in establishing the tenor of the project and should be carefully orchestrated to cover significant points in the project process 3. This serves as the blueprint for execution of the engagement 4. It is the process of taking the task estimates and dependencies as well as the project team assignments and availability and matching them against a calendar 5. It means planning , executing, scheduling and controlling activities to provide solutions to the identified problems 6. Its purpose is to enable the project leader to present to the team members the engagement background and objective and to outline clearly the roles that each person will play in the project 7. Planning is not just about defining a course of action. It is about building in the ________ to respond to the unexpected. 8. A project management tool used to schedule, organize, and coordinate tasks within a project a. Gantt chart c. Schedule plan b. Pert diagram d. Bubble charts 9. It is commonly used in project management which is one of the most popular and useful ways of showing activities (tasks or events) displayed against time. a. Gantt chart c. Schedule plan b. Pert diagram d. Bubble charts 10. These are the important topics to be discussed in an engagement kick off meeting except: a. Review of the engagement proposal b. Discussion of the work objectives c. Project completion date d. Staffing and project costing Chapter 10