Ouiz-2-Chapters-5-13na

MANAGEMENT CONSULTANCY

JACF

QUIZ 2 – Chapters 5 - 13 Instructions: Choose the letter of the best answer and shade the box correspondin correspondin to !our choice on the answer sheet" 1" # $anae$ent ad%isor! ser%ices ser%ices enae$ent enae$ent enerall! enerall! in%ol%es the followin followin acti%ities in what order& I" 'ost enae$ent follow-up" II" I$ple$entin th the rec reco o$$e $$endation" III" Conductin th the en enae$ent" I(" )eotiatin th the en enae$ent" (" 'rep 'repar arin in  for for and and star starti tin n the the ena enae e$e $ent nt"" (I" *%aluatin tth he en enae$ent" (II" (II" 'repa 'reparin rin  and and repr represe esenti ntin n the the repor reportt and and reco reco$$e $$enda ndatio tions" ns" a" (II+ (I+ (+ I(+ III+ II and I c" I(+ III+ (+ (I+ II+ (II and I b" III+ I(+ (+ (I+ (II+ I and II d" I(+ (+ III+ (II+ II+ (I and I 2" ,he acti%ities in a $anae$ent $anae$ent s!ste$s s!ste$s control control process process can be rouped rouped into four: I" .easure$ent of actual perfor$ance" II" II" /eci /ecidi din n and and i$p i$ple le$e $ent ntin in  cor corrrecti ecti%e %e acti action on"" III" III" /ete /eterr$ini $inin n sta stand ndar ards ds of perf perfor or$a $anc nce" e" I(" I(" Co$par Co$parin in actual actual perfor perfor$an $ance ce %ers %ersus us stan standar dards ds and and anal anal!0i !0in n resu results lts""  ,he abo%e acti%ities acti%ities $ust be done done in this seuence: seuence: a" I(+ III+ II+ I c" I+ III+ I(+ II b" III+ I+ I(+ II d" III+ I(+ I+ II 3" #s a consulta consultant+ nt+ the C' C'# practiti practitioner oner shoul should d a" *xercise *xercise ad$inistrati%e ad$inistrati%e control control o%er the clients sta to a%oid unnecessar! unnecessar! dela!s in in i$ple$entation" b" *ncourae dependence of the client client on the the consultants consultants sta so as to pinpoint clear responsibilit! responsibilit! in i$ple$entin the s!ste$" c" )ot tae tae responsibilit! responsibilit! for $ain decisions and polic! polic! 4ud$ents in .# enae$ents" enae$ents" d" Conduct his his enae$ent enae$ent as if he is a $e$ber of the the clients orani0ation" orani0ation" 6" 7hich 7hich of the the followin followin state$ent state$ents s is not not true& true& a" In the rendition rendition of .#+ independence independence $ust $ust be obser%ed obser%ed so as to $aintain the essential essential reuisites of i$partialit! and ob4ecti%it!" b" #ll pro%isions pro%isions of the the code of professional professional ethics ethics are applicable applicable in the practice of .# except those rules related to the expression of an opinion on 8nancial state$ents" c" .# ser%e ser%e onl! onl! in the the areas areas of accou accountin ntin  and 8nanc 8nance" e" d" 9efore acceptin acceptin an an enae$ent+ a practitioner practitioner should notif! the the client of an! reser%ation he has reardin anticipated bene8ts" 5" Identif! Identif! the the followin followin state$ state$ents ents as true or false false"" principall! in%ol%es the consultati%e consultati%e ser%ices to $anae$ent $anae$ent in his Statement 1: .# principall! decision $ain" Statement 2: .# consultation+ consultation+ unlie .# .# enae$ent+ enerall! enerall! in%ol%es ad%ise of infor$ation b! a C'# in which an anal!tical process is applied" Statement 3: 9ecause the C'# $ust be independent+ he $ust not allow the client to participate in an! phase of his enae$ent"

a" b" c" d"

tate$ent 1 ,rue alse alse ,rue

tate$ent 2 ,rue ,rue alse alse

tate$ent 3 alse alse alse alse

;" Indicate Indicate whether whether the followi followin n state$ents state$ents are are true or false" false" Page 1 of 4

MANAGEMENT CONSULTANCY

JACF

# C'# 8r$s pri$ar! purpose of perfor$in .# is to enable the sta $e$bers to acuire the necessar! continuin education in all areas of business" Statement 2: In $anae$ent audit+ a tea$ with a $ix of $e$ber s who are accountants and non-accountants will produce a desirable co$bination of specialists and will oer a cross fertili0ation of ideas fro$ dierent business 8elds" Statement 3: #n area of .# which is directl! related to accountin and 8nance functions is pro4ect feasibilit! stud!"  ,rue alse a" 1 2 b" 2 1 c" 3 2 d" 1 3 Statement 1:

" ,hese state$ents relate to .# standards" I" # practitioner is to notif! the client of an! reser%ation he has reardin anticipated bene8ts" II" ,hrouhout the enae$ent+ there ouht to be a s!ste$atic critical re%iew of acco$plish$ents and wor should be done within the fra$ewor of the Code of *thics and other professional standards" III" /urin the enae$ent+ should there be sini8cant chanes between cost and anticipated bene8ts+ the client should be infor$ed" I(" 9efore the enae$ent+ the practitioner $ust $ae arrane$ent with+ and infor$ the client on sini8cant $atters related to the enae$ent in writin" ?f these state$ents+ which pertains to the practice standard on client bene8t& a" tate$ents I and II onl!" b" #ll state$ents" c" tate$ent I onl!" d" tate$ents I+ III and I( onl!" 1@"Aris ,een+ a C'# 8r$s partner – in – chare of ualit! assurance and re%iew is aruin with  Bi$ .ene0+ the consultin partner reardin the uestion on independence Bi$ .ene0 is presentl! renderin consultin ser%ices to Aee$ 'oleen and #lba ee0e+ an audit client of the 8r$" elated to this issue of independence+ all of the followin state$ents are not %alid+ except Page 2 of 4

MANAGEMENT CONSULTANCY

JACF

a" Independence is ne%er sacri8ced for as lon as the auditor D consultant is correct in ad%ice for the client" b" # C'# who renders both audit and consultin ser%ices to a client b! %irtue of his co$petence D expertise and extensi%e nowlede of the clients business is in the best position to render decisions for the client and should do so" c" ,he client is the ulti$ate decision $aer and the auditor and D or consultant should not $ae decisions for the client" d" It is up to professional 4ud$ent and discretion of the auditor D consultant to render decisions for the client for as lon as his professional fees are co$$ensurate to the bene8t that the client will deri%e fro$ the enae$ent" 11"#fter preli$inar! audit arrane$ent has been $ade+ an enae$ent con8r$ation letter should be sent to the client" ,he letter usuall! would not include: a" #n esti$ate of the ti$e to be spent on the audit wor b! audit sta and $anae$ent" b" # reference to the auditors responsibilit! for the detection of errors or irreularities" c" # state$ent that $anae$ent ad%isor! ser%ices would be $ade a%ailable upon reuest" d" # state$ent that $anae$ent letter will be issued outlinin co$$ents and suestions as to an! procedures reuirin the clients attention" 12"7hich of the followin state$ents is false& a" C'#s pro%ide $anae$ent ser%ices to o around the ethical constraints as $andated b! the #ccountanc! #ct" b" 9usinesses hire $anae$ent consultants to help de8ne speci8c proble$s and de%elop solutions" c" Included in the practice of consultin is the pro%ision of con8dential ser%ice in which the identit! of the client is concealed" d" C'#s perfor$in $anae$ent ser%ices $a! be considered to be in the practice of $anae$ent consultin" 13"7hich of the followin state$ents is not acceptable& a" # C'# represents three $a4or pla!ers in the industr! in rationali0in the industr!s incenti%e before the o%ern$ent public hearins" b" # C'# shares with a new and substantial client infor$ation reardin another client belonin to the sa$e industr!" c" # C'# pro%ides consultin ser%ices to an audit client" d" # C'# oers and pro%ides consultin ser%ices to two $a4or co$petin clients" 16"In which wa! should an accountin 8r$ appl! the concept of co$petence in ser%in its clients& a" ,he 8r$ should as its sta to euip the$sel%es for the enae$ent at hand b! stud!in+ consultin with other professional and other $eans" b" ,he 8r$ should occasionall! accept enae$ents outside the scope of its reular ser%ices and then collaborate with outside specialists on such enae$ent" c" ,he 8r$ should accept enae$ent in which it has personnel uali8ed to undertae and help sol%e the particular proble$ in%ol%ed" d" ,he 8r$ should e$plo! a specialist te$poraril! when it is not reasonabl! co$petent to undertae a particular enae$ent" 15"7hich of the followin cannot $axi$i0e the usefulness of obser%ation& a" .ae a record of what is obser%ed as speci8c as possible+ a%oidin eneralities and %aue descriptions" b" *xpressin %alue 4ud$ents when interactin with the persons bein obser%ed" c" If persons are to be aware of the obser%ations+ explain to the$ what will be done and wh!" d" Identif! and de8ne what it is that the consultant will obser%e and the esti$ated lenth that the obser%ation will entail" 1;"7hich of the followin areas will not be co%ered in conductin a post – enae$ent follow – up& a" ee earned on each i$portant part of the enae$ent" b" *nae$ent prora$" Page 3 of 4

MANAGEMENT CONSULTANCY

JACF

c" 'roposal" d" ource data" 1