Cpa’s in mas practice must observe the ethical requirements of the accountancy profession except

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

Which of the following is not covered by MAS?

Which of the following is a characteristic of management advisory systems?

What is MAS engagement process?

What is the primary purpose of management advisory services?