Quiz 2

Question 1
Confidentiality of information about a client’s affairs is one of the ethical principles that
should always be observed by a management consultant. The following situations allow
the consultant to disclose otherwise considered confidential except information
Response: to respond to an inquiry of shareholders and creditors of the business entity.
Correct answer: to respond to an inquiry of shareholders and creditors of the business
entity.
Score: 1 out of 1 Yes

Question 2
Factors that must be considered when defining the target level of competence of
management consultants include the following expect:
Response: Investment required.
Correct answer: Investment required.
Score: 1 out of 1 Yes

Question 3
The following are reasons why physiological equilibrium is needed by the consultant
except
Response: To enable him/her to accept as many clients as possible
Correct answer: To enable him/her to accept as many clients as possible
Score: 1 out of 1 Yes

Question 4
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
Response: News release (one-full page) in Philippine Daily Inquirer about the opening
of the consultancy firm.
Correct answer: News release (one-full page) in Philippine Daily Inquirer about the
opening of the consultancy firm.
Score: 1 out of 1 Yes

Question 5
Which of the following statements is true?
Response: Engagements are to be adequately planned, supervised and controlled
Correct answer: Engagements are to be adequately planned, supervised and controlled
Score: 1 out of 1 Yes

Question 6
Which of the following contains the best statement on how an accounting firm should
apply the concept of competence in serving clients?
Response: The firm should accept only those engagement which it is qualified to
undertake and asking personnel qualified to give effective service in solving the
particular problem or problems involved.
Correct answer: The firm should accept only those engagement which it is qualified to
undertake and asking personnel qualified to give effective service in solving the
particular problem or problems involved.
Score: 1 out of 1 Yes

Question 7
Which of the following statements is true?
Response: In management services engagement, the independent CPA renders
technical advice
Correct answer: In management services engagement, the independent CPA renders
technical advice
Score: 1 out of 1 Yes

Question 8
Which of the following statements is false?
Response: A CPA may continue rendering management services to a client even after
conflict of interest has arisen if in good faith he was not aware of the same at the time
he accepted the engagement
Correct answer: A CPA may continue rendering management services to a client even
after conflict of interest has arisen if in good faith he was not aware of the same at the
time he accepted the engagement
Score: 1 out of 1 Yes

Question 9
The most important factor in selecting an engagement team is to assign consultants:
Response: With the appropriate skills, experience and types of thinking to deal with the
clients’ problems.
Correct answer: With the appropriate skills, experience and types of thinking to deal
with the clients’ problems.
Score: 1 out of 1 Yes

Question 10
This individual is normally responsible for the successful completion of engagements,
dealing directly with clients and for “selling” work or consultancy services.
Response: Partners
Correct answer: Partners
Score: 1 out of 1 Yes

Question 11
Which of the following is considered a manifestation of a consultant’s project
management skills?
Response: Ability to recognize the business entity’s profile of strengths, weaknesses
and capabilities.
Correct answer: Ability to manage the financial resources that are to be invested in the
consulting project.
Score: 0 out of 1 No

Question 12
After making the preliminary audit arrangements, an engagement confirmation letter
should be sent to the client. The letter usually will not include
Response: A statement that management advisory services would be made available
upon request.
Correct answer: A statement that management advisory services would be made
available upon request.
Score: 1 out of 1 Yes

Question 13
A CPA engaged in MS practice may not
Response: Disclose confidential information unless authorized or legally obligated.
Correct answer: Disclose confidential information unless authorized or legally obligated.
Score: 1 out of 1 Yes
Question 14
Management services of certified public accountants cover all the following, except
Response: Audit, tax and legal services
Correct answer: Audit, tax and legal services
Score: 1 out of 1 Yes

Question 15
Which of the following statements is correct?
Response: To maintain his independence, a CPA limits his services to that of
recommending and designing an accounting system but leave the actual
implementation and installation to the client
Correct answer: To maintain his independence, a CPA limits his services to that of
recommending and designing an accounting system but leave the actual
implementation and installation to the client
Score: 1 out of 1 Yes

Question 16
Which of the following statements is true?
Response: The CPA’s competence, coupled with his familiarity with the client’s finance
and control systems, business problems, and personnel, places him in logical position
to perform management services for that client.
Correct answer: The CPA’s competence, coupled with his familiarity with the client’s
finance and control systems, business problems, and personnel, places him in logical
position to perform management services for that client.
Score: 1 out of 1 Yes

Question 17
Which of the following statements is true?
Response: Competence in management advisory services can be acquired by formal
college education, experience in traditional services performed by CPA’s and actual
performance of management advisory services.
Correct answer: Competence in management advisory services can be acquired by
formal college education, experience in traditional services performed by CPA’s and
actual performance of management advisory services.
Score: 1 out of 1 Yes

Question 18
 An ability to identify, process and draw meaning from available relevant information as
a basis for decision-making is a manifestation of a consultant’s
Response: Analysis skills
Correct answer: Analysis skills
Score: 1 out of 1 Yes

Question 19
A consultant’s ability to identify what information is needed in a particular situation is an
example of
Response: Interpersonal skills
Correct answer: Analysis skills
Score: 0 out of 1 No

Question 20
An MS client asked for internal control system evaluation. During evaluation, the
practitioner suggests that certain changes are necessary in handling some accounts.
The client agrees. However, he (the client) requests that his former consultant supervise
the installation.

The practitioner knows that such former consultant lacks sufficient experience to
provide the necessary technical direction and supervision. In this case, the practitioner
should
Response: Decline the engagement if the client insists that the former consultant
supervise the installation, and the necessary technical competence would not be
provided even through other means.
Correct answer: Decline the engagement if the client insists that the former consultant
supervise the installation, and the necessary technical competence would not be
provided even through other means.
Score: 1 out of 1

Question 1
An ability to identify, process and draw meaning from available relevant information as
a basis for decision-making is a manifestation of a consultant’s
Response: Analysis skills
Correct answer: Analysis skills
Score: 1 out of 1 Yes

Question 2
 After making the preliminary audit arrangements, an engagement confirmation letter
should be sent to the client. The letter usually will not include
Response: A statement that management advisory services would be made available
upon request.
Correct answer: A statement that management advisory services would be made
available upon request.
Score: 1 out of 1 Yes

Question 3
A CPA engaged in public practice was engaged by a client who has a little accounting
and management experience to perform MAS. After presenting several alternative
solutions and the probable outcome for each, the CPA decided to implement the best
alternative solution and assumed full responsibility for which the client agreed.
Response: The CPA was correct in implementing the solution, but full responsibility
should have been assumed by the client.
Correct answer: The CPA should not have implemented the best alternative solution
and should not have assumed full responsibility even if the client agreed, for these
should have been done by the client.
Score: 0 out of 1 No

Question 4
Should ethical conflicts arise, the professional accountant who is also a management
consultant should observe the following except
Response: Follow the established policies of the firm to seek resolution of such conflict
Correct answer: Seek consulting and advice publicly with the applicable professional
accountancy body or regulatory body
Score: 0 out of 1 No

Question 5
To improve one’s relationship-building skills, he/she must have an ability to listen
effectively. Which of the following is not recommended if the consultant would want to
improve this skill?
Response: Allow the mind to drift from time to time to avoid boredom
Correct answer: Allow the mind to drift from time to time to avoid boredom
Score: 1 out of 1 Yes

Question 6
 Management consulting is a non-assurance engagement that may be performed by
professional accountants. If management consultancy service is provided to the audit
client of the same professional accountant during or after the period covered by the
financial statements but before the start of the audit engagement, consideration should
be given to threats of independence, if any, arising from the consultancy services. If the
threat is significant, safeguards are to be considered and applied as necessary to
reduce the threat to an acceptable level. These safeguards include the following except.
Response: declining acceptance of the audit engagement.
Correct answer: declining acceptance of the audit engagement.
Score: 1 out of 1 Yes

Question 7
This individual is normally responsible for the successful completion of engagements,
dealing directly with clients and for “selling” work or consultancy services.
Response: Partners
Correct answer: Partners
Score: 1 out of 1 Yes

Question 8
Which of the following contains the best statement on how an accounting firm should
apply the concept of competence in serving clients?
Response: The firm should accept only those engagement which it is qualified to
undertake and asking personnel qualified to give effective service in solving the
particular problem or problems involved.
Correct answer: The firm should accept only those engagement which it is qualified to
undertake and asking personnel qualified to give effective service in solving the
particular problem or problems involved.
Score: 1 out of 1 Yes

Question 9
Which of the following statements is true?
Response: A CPA’s competence in management services embraces only the analytical
approach and process and not necessarily the technical subject matter of the areas
involved.
Correct answer: Competence in management advisory services can be acquired by
formal college education, experience in traditional services performed by CPA’s and
actual performance of management advisory services.
Score: 0 out of 1 No
Question 10
Which of the following statements is true?
Response: Engagements are to be adequately planned, supervised and controlled
Correct answer: Engagements are to be adequately planned, supervised and controlled
Score: 1 out of 1 Yes

Question 11
The following are reasons why physiological equilibrium is needed by the consultant
except
Response: To enable him/her to accept as many clients as possible
Correct answer: To enable him/her to accept as many clients as possible
Score: 1 out of 1 Yes

Question 12
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
Response: Top-of-the-line and world-class facilities
Correct answer: Top-of-the-line and world-class facilities
Score: 1 out of 1 Yes

Question 13
To achieve the objectives of the accountancy profession, professional accountants
including those providing management advisory services should observe among other
the following principles except
Response: Careful selection of clients to include only those big and financially capable
business entities
Correct answer: Careful selection of clients to include only those big and financially
capable business entities
Score: 1 out of 1 Yes

Question 14
Identify from the following a possible barrier to effective communication between the
client and the consultant
Response: Know-it-all-attitude and/or prejudice of some personnel of the client
Correct answer: Know-it-all-attitude and/or prejudice of some personnel of the client
Score: 1 out of 1 Yes

Question 15
Which of the following is considered a manifestation of a consultant’s project
management skills?
Response: Ability to recognize the business entity’s profile of strengths, weaknesses
and capabilities.
Correct answer: Ability to manage the financial resources that are to be invested in the
consulting project.
Score: 0 out of 1 No

Question 16
Which of the following statements is false?
Response: A CPA may continue rendering management services to a client even after
conflict of interest has arisen if in good faith he was not aware of the same at the time
he accepted the engagement
Correct answer: A CPA may continue rendering management services to a client even
after conflict of interest has arisen if in good faith he was not aware of the same at the
time he accepted the engagement
Score: 1 out of 1 Yes

Question 17
A consultant’s ability to identify what information is needed in a particular situation is an
example of
Response: Analysis skills
Correct answer: Analysis skills
Score: 1 out of 1 Yes

Question 18
A CPA engaged in MS practice may not
Response: Disclose confidential information unless authorized or legally obligated.
Correct answer: Disclose confidential information unless authorized or legally obligated.
Score: 1 out of 1 Yes

Question 19
Which of the following statements is correct?
Response: To maintain his independence, a CPA limits his services to that of
recommending and designing an accounting system but leave the actual
implementation and installation to the client
Correct answer: To maintain his independence, a CPA limits his services to that of
recommending and designing an accounting system but leave the actual
implementation and installation to the client
Score: 1 out of 1 Yes

Question 20
The primary purpose of mA consianagement advisory services is
Response: To improve the client’s use of its capabilities and resources to achieve the
objectives of the organizations.
Correct answer: To improve the client’s use of its capabilities and resources to achieve
the objectives of the organizations.
Score: 1 out of 1

Question 1
Factors that must be considered when defining the target level of competence of
management consultants include the following expect:
Response: Investment required.
Correct answer: Investment required.
Score: 1 out of 1 Yes

Question 2
In marketing and promotion of themselves and their work, professional accountants,
including those engaged in management consulting, should
Response: Not make exaggerated claims for the services they are able to offer, the
qualifications they possess, or experience they have gained.
Correct answer: Not make exaggerated claims for the services they are able to offer,
the qualifications they possess, or experience they have gained.
Score: 1 out of 1 Yes

Question 3
Which of the following contains the best statement on how an accounting firm should
apply the concept of competence in serving clients?
Response: The firm should accept only those engagement which it is qualified to
undertake and asking personnel qualified to give effective service in solving the
particular problem or problems involved.
Correct answer: The firm should accept only those engagement which it is qualified to
undertake and asking personnel qualified to give effective service in solving the
particular problem or problems involved.
Score: 1 out of 1 Yes

Question 4
A personal attribute of a 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.
Response: Physiological equilibrium
Correct answer: Psychological maturity
Score: 0 out of 1 No

Question 5
The primary purpose of management advisory services is
Response: To improve the client’s use of its capabilities and resources to achieve the
objectives of the organizations.
Correct answer: To improve the client’s use of its capabilities and resources to achieve
the objectives of the organizations.
Score: 1 out of 1 Yes

Question 6
Which of the following statements is true?
Response: Engagements are to be adequately planned, supervised and controlled
Correct answer: Engagements are to be adequately planned, supervised and controlled
Score: 1 out of 1 Yes

Question 7
A CPA should reject an MAS engagement if
Response: He audits the financial statements of a subsidiary of the prospective client.
Correct answer: It would require him to make management decisions for an audit client.
Score: 0 out of 1 No
Question 8
Identify from the following a possible barrier to effective communication between the
client and the consultant
Response: Know-it-all-attitude and/or prejudice of some personnel of the client
Correct answer: Know-it-all-attitude and/or prejudice of some personnel of the client
Score: 1 out of 1 Yes

Question 9
After making the preliminary audit arrangements, an engagement confirmation letter
should be sent to the client. The letter usually will not include
Response: A statement that management advisory services would be made available
upon request.
Correct answer: A statement that management advisory services would be made
available upon request.
Score: 1 out of 1 Yes

Question 10
The following are reasons why physiological equilibrium is needed by the consultant
except
Response: To enable him/her to accept as many clients as possible
Correct answer: To enable him/her to accept as many clients as possible
Score: 1 out of 1 Yes

Question 11
Which of the following statements is true?
Response: Competence in management advisory services can be acquired by formal
college education, experience in traditional services performed by CPA’s and actual
performance of management advisory services.
Correct answer: Competence in management advisory services can be acquired by
formal college education, experience in traditional services performed by CPA’s and
actual performance of management advisory services.
Score: 1 out of 1 Yes

Question 12
 Confidentiality of information about a client’s affairs is one of the ethical principles that
should always be observed by a management consultant. The following situations allow
the consultant to disclose otherwise considered confidential except information
Response: to respond to an inquiry of shareholders and creditors of the business entity.
Correct answer: to respond to an inquiry of shareholders and creditors of the business
entity.
Score: 1 out of 1 Yes

Question 13
Ability of the consultant to focus and direct the individuals in an organization in a way
that brings the whole organization benefits.
Response: Ability to demonstrate leadership
Correct answer: Ability to demonstrate leadership
Score: 1 out of 1 Yes

Question 14
Management consulting is a non-assurance engagement that may be performed by
professional accountants. If management consultancy service is provided to the audit
client of the same professional accountant during or after the period covered by the
financial statements but before the start of the audit engagement, consideration should
be given to threats of independence, if any, arising from the consultancy services. If the
threat is significant, safeguards are to be considered and applied as necessary to
reduce the threat to an acceptable level. These safeguards include the following except.
Response: declining acceptance of the audit engagement.
Correct answer: declining acceptance of the audit engagement.
Score: 1 out of 1 Yes

Question 15
An MS client asked for internal control system evaluation. During evaluation, the
practitioner suggests that certain changes are necessary in handling some accounts.
The client agrees. However, he (the client) requests that his former consultant supervise
the installation.

The practitioner knows that such former consultant lacks sufficient experience to
provide the necessary technical direction and supervision. In this case, the practitioner
should
Response: Decline the engagement if the client insists that the former consultant
supervise the installation, and the necessary technical competence would not be
provided even through other means.
Correct answer: Decline the engagement if the client insists that the former consultant
supervise the installation, and the necessary technical competence would not be
provided even through other means.
Score: 1 out of 1 Yes

Question 16
To improve one’s relationship-building skills, he/she must have an ability to listen
effectively. Which of the following is not recommended if the consultant would want to
improve this skill?
Response: Allow the mind to drift from time to time to avoid boredom
Correct answer: Allow the mind to drift from time to time to avoid boredom
Score: 1 out of 1 Yes

Question 17
A personal attribute of a consultant that refers to 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.
Response: Empathy
Correct answer: Empathy
Score: 1 out of 1 Yes

Question 18
A consultant’s ability to identify what information is needed in a particular situation is an
example of
Response: Analysis skills
Correct answer: Analysis skills
Score: 1 out of 1 Yes

Question 19
Management services of certified public accountants cover all the following, except
Response: Audit, tax and legal services
Correct answer: Audit, tax and legal services
Score: 1 out of 1 Yes

Question 20
A CPA engaged in MS practice may not
Response: Disclose confidential information unless authorized or legally obligated.
Correct answer: Disclose confidential information unless authorized or legally obligated.
Score: 1 out of 1

Question 1
Project management skills require the following except
Response: Ability to accept numerous clients that will enable him/her to generate more
income thereby spreading himself/herself too thinly
Correct answer: Ability to accept numerous clients that will enable him/her to generate
more income thereby spreading himself/herself too thinly
Score: 1 out of 1 Yes

Question 2
Which of the following statements is true?
Response: In management services engagement, the independent CPA renders
technical advice
Correct answer: In management services engagement, the independent CPA renders
technical advice
Score: 1 out of 1 Yes

Question 3
A CPA engaged in public practice was engaged by a client who has a little accounting
and management experience to perform MAS. After presenting several alternative
solutions and the probable outcome for each, the CPA decided to implement the best
alternative solution and assumed full responsibility for which the client agreed.
Response: The CPA should not have implemented the best alternative solution and
should not have assumed full responsibility even if the client agreed, for these should
have been done by the client.
Correct answer: The CPA should not have implemented the best alternative solution
and should not have assumed full responsibility even if the client agreed, for these
should have been done by the client.
Score: 1 out of 1 Yes

Question 4
An MS client asked for internal control system evaluation. During evaluation, the
practitioner suggests that certain changes are necessary in handling some accounts.
The client agrees. However, he (the client) requests that his former consultant supervise
the installation.
The practitioner knows that such former consultant lacks sufficient experience to
provide the necessary technical direction and supervision. In this case, the practitioner
should
Response: Decline the engagement if the client insists that the former consultant
supervise the installation, and the necessary technical competence would not be
provided even through other means.
Correct answer: Decline the engagement if the client insists that the former consultant
supervise the installation, and the necessary technical competence would not be
provided even through other means.
Score: 1 out of 1 Yes

Question 5
Factors that must be considered when defining the target level of competence of
management consultants include the following expect:
Response: Investment required.
Correct answer: Investment required.
Score: 1 out of 1 Yes

Question 6
Which of the following statements is true?
Response: Engagements are to be adequately planned, supervised and controlled
Correct answer: Engagements are to be adequately planned, supervised and controlled
Score: 1 out of 1 Yes

Question 7
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
Response: Top-of-the-line and world-class facilities
Correct answer: Top-of-the-line and world-class facilities
Score: 1 out of 1 Yes

Question 8
After making the preliminary audit arrangements, an engagement confirmation letter
should be sent to the client. The letter usually will not include
Response: A statement that management advisory services would be made available
upon request.
Correct answer: A statement that management advisory services would be made
available upon request.
Score: 1 out of 1 Yes

Question 9
To achieve the objectives of the accountancy profession, professional accountants
including those providing management advisory services should observe among other
the following principles except
Response: Careful selection of clients to include only those big and financially capable
business entities
Correct answer: Careful selection of clients to include only those big and financially
capable business entities
Score: 1 out of 1 Yes

Question 10
The most important factor in selecting an engagement team is to assign consultants:
Response: With the appropriate skills, experience and types of thinking to deal with the
clients’ problems.
Correct answer: With the appropriate skills, experience and types of thinking to deal
with the clients’ problems.
Score: 1 out of 1 Yes

Question 11
A CPA engaged in MS practice may not
Response: Disclose confidential information unless authorized or legally obligated.
Correct answer: Disclose confidential information unless authorized or legally obligated.
Score: 1 out of 1 Yes

Question 12
In marketing and promotion of themselves and their work, professional accountants,
including those engaged in management consulting, should
Response: Not make exaggerated claims for the services they are able to offer, the
qualifications they possess, or experience they have gained.
Correct answer: Not make exaggerated claims for the services they are able to offer,
the qualifications they possess, or experience they have gained.
Score: 1 out of 1 Yes

Question 13
Ability of the consultant to focus and direct the individuals in an organization in a way
that brings the whole organization benefits.
Response: Ability to demonstrate leadership
Correct answer: Ability to demonstrate leadership
Score: 1 out of 1 Yes

Question 14
The application of analytical approach and process in consultancy engagements
involves the following except
Response: Non-selection of the most desirable alternative
Correct answer: Non-selection of the most desirable alternative
Score: 1 out of 1 Yes

Question 15
The following are reasons why physiological equilibrium is needed by the consultant
except
Response: To enable him/her to accept as many clients as possible
Correct answer: To enable him/her to accept as many clients as possible
Score: 1 out of 1 Yes

Question 16
This individual is normally responsible for the successful completion of engagements,
dealing directly with clients and for “selling” work or consultancy services.
Response: Partners
Correct answer: Partners
Score: 1 out of 1 Yes

Question 17
To improve one’s relationship-building skills, he/she must have an ability to listen
effectively. Which of the following is not recommended if the consultant would want to
improve this skill?
Response: Allow the mind to drift from time to time to avoid boredom
Correct answer: Allow the mind to drift from time to time to avoid boredom
Score: 1 out of 1 Yes

Question 18
Management services of certified public accountants cover all the following, except
Response: Audit, tax and legal services
Correct answer: Audit, tax and legal services
Score: 1 out of 1 Yes

Question 19
An ability to identify, process and draw meaning from available relevant information as
a basis for decision-making is a manifestation of a consultant’s
Response: Analysis skills
Correct answer: Analysis skills
Score: 1 out of 1 Yes

Question 20
Management consulting is a non-assurance engagement that may be performed by
professional accountants. If management consultancy service is provided to the audit
client of the same professional accountant during or after the period covered by the
financial statements but before the start of the audit engagement, consideration should
be given to threats of independence, if any, arising from the consultancy services. If the
threat is significant, safeguards are to be considered and applied as necessary to
reduce the threat to an acceptable level. These safeguards include the following except.
Response: declining acceptance of the audit engagement.
Correct answer: declining acceptance of the audit engagement.
Score: 1 out of 1