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Advisory Services
AREASOFMAS
1. Types of MASEngagements
2. Areas of MASPractice
3. Mgt. Consultancy Services by CPAs
4. Determining the Scope of Service
5. Types of Clients Served
6. How Consulting Adds Value
TYPESOFMASENGAGEMENTS
Progressive Problem
Involves existing situation that can be improved
Example: old technology used despite transaction
growth & ITdevelopments
Opportunistic Problem
Situation in w/c future opportunity exists
Example: more effective use of excessive available
cash
Likely to lead to more risky, more potentially
rewarding courses of action than corrective &
progressive problems
SERVICEDELIVERYAREAS
1)Identifying objectives
2) Defining problem
3) Finding out facts
4) Developing solution
5) Implementing solution
Objective Technique
Capital investment Discounted cash
planning flow model
Info sys planning Structured
and design methodology
INDUSTRY ORNATURE OF
ORGANIZATION
• Client may be:
– Private business firm
– Government agency
– Non-profit NGO
– Professional association
– Some other organization
GEOGRAPHICALAREA
Information SystemsConsulting
- MIS (Mgt. Information System): usually uses
computer technology
- Non-technical consultant can still add value:
e.g., develop understanding of business’
information needs
Management/Operations Audit
- Conducted to assess effectiveness and/or
efficiency of operations
- Discussed as separatetopic
AREASOFMAS PRACTICE
1. Traditional services
a. Managerial accounting
b. Design & appraisal of accounting system
c. Financial management–related services
d. Project feasibility studies
MAS SERVICESBYCPAs
2. Emerging consultancyservices
a. Global risk mgt. solution
b. Transactionservices
c. Financial advisoryservices
d. Projectfinance & privatization
e. Valuation services
f. Business recovery services
g. Dispute analysis &investigation
h. Computer risk management
i. Application software selection &
implementation
MAS SERVICESBYCPAs
Global Risk ManagementSolution
- Involves managing the totality of risks –
financial, operational, systems & strategic – to
↑ financial & business performance
- Covers:
a)Determination of critical risks firm faces
b)Development of recommendations to ↓ risk
exposure
c)Identification of opportunities for growth &
expansion
MAS SERVICESBYCPAs
Global Risk ManagementSolution
- Areas of risk mgt. services:
1)Financial riskmgt.
Example: Measurement of risk-adjusted
return on capital & link performance evaluation
to creation of shareholder value
2) Strategic riskmgt.
Example: Review of a whole business
unit/dept./function/process so senior
management can fully grasp operationalrisks
MAS SERVICESBYCPAs
Global Risk ManagementSolution
- Areas of risk mgt. services:
3) Operational & systems risk mgt.
Example: Technology risk services
4) Compliance riskmgt.
Example: Review of compliance w/regulatory
requirements & ethicalconductstandards
5) Internal audit services
Example: Development of new internalaudit
function
MAS SERVICESBYCPAs
Transaction Services
- Related to mergers & acquisitions (M & A),
divestiture, joint ventures, spin-offs, strategic
alliances
- Example : due diligenceservices
Financial Advisory Services
- Provision of comprehensive financial, economic &
strategic advice to companies w/ complex problems
& disputes
- Example: investment banking, intellectual property
disputes
MAS SERVICESBYCPAs
Project Finance & Privatization
- Mgt. advisory services related to public & private
sector partnership in delivering infrastructure &
services or privatization & project finance
- Example: Development of commercial structure for a
deal, including risk mitigation & contracts
Valuation Services
- Services guiding clients through complex transactions
like investment acquisition/divestiture, debt
structuring & finance raising, entry to stock
exchange, mergers
MAS SERVICESBYCPAs
Business Recovery Services
- Provided to troubled firms by emphasizing
implementation, rationalization & recovery
programs to rebuild value
- Examples: hands-on turnaround, insolvency
services
Dispute Analysis & Investigation
Examples: Environmental analysis, real estate
damage
MAS SERVICESBYCPAs
Computer RiskManagement
- Helps in understanding & mgt. of business risks
on technology implementation & use
- Example: implementing e-commerce
Application Software Selection & Implementation
-Assistance in needs prioritization
- Identification of right software
- Tailoringto meet specific requirement
DETERMINING SERVICESCOPE
• Factors to consider:
1) Responsibility to establish scope of services
2) Independence
3) Competence
4) Requirements for specialization
5) Identification & resolution of client’s basic
problems
6) Referrals
7) Code of professionalethics
TYPESOFCLIENTSSERVED
1. Contact clients
2. Intermediate clients
3. Primary clients
4. Unwitting clients
5. Indirect clients
6. Ultimate clients
TYPESOFCLIENTSSERVED
Contact Clients
- Persons who 1st approach consultant &
propose that consultant address a
problem/issue
Intermediate Clients
- Members of client org. whobecome
involved in consulting project
- Work w/ consultant, sit on mtgs.,may
receive report
TYPESOFCLIENTSSERVED
Primary Clients
- Person(s) who have identified problem/issue
consultant shalladdress
- Most immediately affected by problem/issue
-Willing to pay to have issue resolved
Unwitting Clients
- Members of client org. who’ll be affected by
consultant’s intervention
- Not aware that they’ll be affected by project
TYPESOFCLIENTSSERVED
Indirect Clients
- Client org. members who’ll be affected by
consultant’s intervention & are aware that
they’ll be affected
- May feel positive/negative about intervention
-Can facilitate/hinder project’s progress
Ultimate Clients
- Total community that will be affected by
consultant’s intervention
- Client org. + non client in contactwith client
TYPESOFCLIENTSSERVED
Provision of Information
- Consultant can analyze & present information to
supporteffective managerial decisions
- Areas of information can include firm’s customers,
products, markets, competitors, etc.
HOW CONSULTINGADDSVALUE
Provision of SpecialistExpertise
- Some projects may require specialist’s technical
knowledge & ability
- Some possible areas of specialist’s involvement:
- Business strategy
- New product development
- Information systemsdevelopment
- Exporting & international marketing, etc.
HOW CONSULTINGADDSVALUE
Provision of NewPerspective
- Consultant can offer a fresh mind to an issue
- Consultant can aid in opening up &fostering
innovative thinking
Provision of Support forInternal Arguments
Consultant’s opinion can be presented as
“independent” and “expert”
HOW CONSULTINGADDSVALUE