Mas_basic Considerations

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  • 1/10 Questions

    Which of the following is not a qualification of a CPA in a MAS practice?

    • Professional and technical competence.
    • Analytical experience in problem solving.
    • Auditor of the client.
    • Professional independence, objectivity and integrity
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About This Quiz

The MAS_Basic Considerations quiz focuses on evaluating understanding of management advisory services within accounting and finance. It tests knowledge on financial management, CPA qualifications, and the scope of management services, crucial for professionals in the field.

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  • 2. 

    The following characterize management advisory services except

    • A. Involve decision for the future

    • B. Broader in scope and varied in nature

    • C. Utilize more junior staff than senior member of the firm

    • D. Relate to specific problems expert help is required.

    Correct Answer
    A. C. Utilize more junior staff than senior member of the firm
    Explanation
    Management advisory services typically involve senior members of the firm who have extensive experience and expertise in the field. These services are sought when specific problems require expert help and guidance. They are broader in scope and varied in nature, as they cover a wide range of management-related issues. Additionally, management advisory services focus on making decisions for the future, helping organizations plan and strategize for their long-term success. Therefore, it is incorrect to say that these services utilize more junior staff than senior members of the firm.

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  • 3. 

    How should a management consultant undertake to secure a consulting engagement when a prospective client has inquired about the services he offers?

    • The consultant should present the value of his services as forcefully as he can because the potential client will benefit from the use of these services

    • The consultant should call to the prospective client, listen to an explanation of the problem, and then agree to do as the prospective client wishes provided the work lies within the field of the consultant’s competence.

    • The consultant should diagnose the existing problem by personal investigation, help the prospective client define it clearly, consider various methods of solutions, recommend the approach which will best meet the requirement of the situation and make sure that the prospective client understands what the consultant purposes to do, how long it will take, how much it will cost and what probable benefits will result.

    • The consultant should recommend the technique or procedure which will solve the prospective client’s problem and should refer him to other clients who have used the same technique or procedure successfully in the past.

    Correct Answer
    A. The consultant should diagnose the existing problem by personal investigation, help the prospective client define it clearly, consider various methods of solutions, recommend the approach which will best meet the requirement of the situation and make sure that the prospective client understands what the consultant purposes to do, how long it will take, how much it will cost and what probable benefits will result.
    Explanation
    The correct answer is to diagnose the existing problem by personal investigation, help the prospective client define it clearly, consider various methods of solutions, recommend the approach which will best meet the requirement of the situation and make sure that the prospective client understands what the consultant purposes to do, how long it will take, how much it will cost and what probable benefits will result. This answer is the most comprehensive and professional approach to securing a consulting engagement. It involves understanding the client's problem, providing expert recommendations, and ensuring clear communication about the process, timeline, cost, and expected outcomes.

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  • 4. 

    Which of the following statements is True?

    • Adequate training and experience in both the analytical approach and process in the particular undertaking are requisites for the CPA to be involved in a management service engagement.

    • A CPA with MBA and Ph.D. degrees is automatically qualified to render management services.

    • Competence as a standard n the rendition of management services by a CPA may be equated to having excellent scholarly preparation to include the usual baccalaureate degree, an MBA and other post graduate studies

    • A certified public accountant by virtue of having the necessary academic preparation and by hurdling the licensure examinations required to have a CPA license can readily render management services to the public.

    Correct Answer
    A. Adequate training and experience in both the analytical approach and process in the particular undertaking are requisites for the CPA to be involved in a management service engagement.
    Explanation
    The correct answer states that adequate training and experience in both the analytical approach and process are necessary for a CPA to be involved in a management service engagement. This means that simply having an MBA and Ph.D. degrees does not automatically qualify a CPA to render management services. Similarly, having a CPA license and academic preparation is not enough, as competence in management services requires specific training and experience in the analytical approach and process.

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  • 5. 

    CPAs are in a more advantageous position than members of other professions to render MAS because

    • CPAs are highly educated

    • Only CPAs may render MAS

    • The CPA is already familiar with the client and his business, ad enjoys his client’s confidence.

    • A CPA is a person with recognized standing

    Correct Answer
    A. The CPA is already familiar with the client and his business, ad enjoys his client’s confidence.
    Explanation
    CPAs are in a more advantageous position than members of other professions to render MAS because they are already familiar with the client and his business, and enjoy his client's confidence. This familiarity and trust allow CPAs to have a deeper understanding of the client's financial situation and business operations, enabling them to provide more accurate and tailored advice. Additionally, CPAs' high level of education and recognized standing further enhance their ability to provide effective MAS services.

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  • 6. 

    Which of the following is not an area related to the performance of management services by independent accounting firms?

    • Performing management functions and making decisions

    • Introducing new ideas, concepts and methods to management

    • Improving existing policies, methods and procedures

    • Performing special studies, preparing recommendations, and formulating plans and programs.

    Correct Answer
    A. Performing management functions and making decisions
  • 7. 

    Which of the following types of management services does not directly relate to accounting and finance functions?

    • Cost analysis of major investment decisions

    • Long-range planning

    • Design, installation or review of budgetary system

    • Valuation of capital stock of companies for purposes of mergers or sales

    Correct Answer
    A. Long-range planning
    Explanation
    Long-range planning is not directly related to accounting and finance functions because it involves setting goals and making strategic decisions for the future, rather than analyzing financial data or managing financial resources. While accounting and finance functions are important for providing the necessary information and resources for long-range planning, the actual planning process itself is separate from these functions.

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  • 8. 

    The fields of cost accounting and financial management are among the MAS areas that are normally related to the accounting and finance functions.  Financial management cases may involve the following except

    • A. Establishment of capital budgeting procedures

    • B. Study of the cost of capital and cost of debt

    • C. Establishment of operating and cash budgets

    • D. Variance analysis

    Correct Answer
    A. D. Variance analysis
    Explanation
    Variance analysis is part of cost accouting

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  • 9. 

    Due professional care in the performance of a management advisory service engagement implies the following except

    • Diligence and appropriate attention in carrying out the assignment

    • Systematic critical review of the work done and judgment exercised

    • Infallibility

    • All of the above.

    Correct Answer
    A. Infallibility
    Explanation
    The correct answer is "Infallibility". Due professional care in the performance of a management advisory service engagement requires diligence and appropriate attention in carrying out the assignment, as well as a systematic critical review of the work done and judgment exercised. However, infallibility, or the inability to make mistakes, is not a realistic expectation for any professional.

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  • 10. 

    The most important factor in selecting an engagement team is to assign consultants:

    • With prior experience in the client’s industry

    • With a combination of skills and experience in various business functional areas as well as in different industries.

    • Who are likely to employ different approaches to problem solving such as highly imaginative thinking, or unusual skill in the interpretation and use of financial and statistical data.

    • With the appropriate skills and experience and types of thinking to deal with the client’s problems.

    Correct Answer
    A. With the appropriate skills and experience and types of thinking to deal with the client’s problems.
    Explanation
    The most important factor in selecting an engagement team is to assign consultants who have the appropriate skills and experience and types of thinking to deal with the client's problems. This ensures that the team is equipped to understand and address the specific challenges faced by the client. Consultants with the right skills and experience will be able to provide valuable insights and solutions, leading to a successful engagement.

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Quiz Review Timeline (Updated): Mar 22, 2023 +

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Nov 18, 2010
    Quiz Created by
    Timcpa
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