St. Vincent de Ferrer College of Camarin, Inc.

SVFC Compound,San Vicente Ferrer St., Area D, Brgy 178, Camarin

Caloocan City Tel. No. 6682575; Email
Address:st.vincentdeferrercollegeofccc@yahoo.com

ACCTG 15- MANAGEMENT CONSULTANCY

MIDTERM EXAMINATION

Name: Rannah Jane S. Raymundo Year: 5TH year / Accountancy

I. Multiple Choice Questions

1. Which of the following statements is false? Answer: D

2. Most definitions of consultancy would include such services related to the following
except Answer: C

3. Which of the following statements is incorrect? Answer: C

4. The actual output of a consulting engagement centers on providing the business

organization with the following except Answer: D
5. Which of the following statement is false? Answer: B

6. Which of the Following statement is true? Answer: B

7. The type of problems faced by an entity that involves conditions that have worsened and
demands urgent action is known as Answer: C

8. Which of the following areas will not be classified under Accounting and Finance
Services? Answer: D

9. The basic analytical process applied in consulting engagements include Answer: A

10. Common outcomes desired from business and development generally include the
following except. Answer: A

11. The MAS engagement that involves providing assistance to management in relation to
planning, controlling and decision making is Answer: B

12. The following are managerial accounting-related consultancy services that a CPA may
provide except Answer: D

13. This engagement involves the review of compliance with regulatory requirement and
 ethical conduct standards. Answer: C

14. These involve services related to mergers, acquisitions, divestitures, joint ventures, spin-
off and strategic alliance. Answer: A

15. The following are areas of consideration in determining the scope of services that a CPA
may perform except Answer: A

16. These are enterprises involved in varied business endeavors such as merchandising
manufacturing, financial services and are potential consultancy clients. Answer: C

17. Services rendered to troubled businesses by emphasizing on the implementation,

rationalization and recovery programs designed to rebuild value. Answer: B

18. The following are among the ground rules that a consultant should observe in providing
support for internal arguments in a client except Answer: A

II. Answer the following questions

1. What are some of the factors that contributed to the emergence and
growth of management consultancy?
- Evolution of MAS the primary factors that contributed to the emergence and growth of
management consultancy are: 1. Growth in size and complexity of business. 2.
Difficulty in conducting and managing a business.

2. Why do small companies need the services of management consultants?

- It is important to hire a management consultant because they can provide valuable
information about the businesses operation; hence the business owner can quickly
identify what area of the business must be worked out to avoid failure.

3. What advantages do CPAs have over other professionals in so far as providing

business advisory services to their clients are concerned?
- As a corporate accountant, becoming a certified public accountant can take your
career to new heights and improve the quality of your work, making it worthwhile
to get licensed. Your peers are also more likely to respect your opinion, given your
professional credibility and business acumen.

4. To what general areas can management consulting relate?

- Management consulting can relate to areas such as: The management functions of
analysis, planning, organizing and controlling 2. The introduction of new ideas,
concepts, and methods to management 3. The improvement of policies, procedures,
systems, methods and organizational relationships.

5. In what ways can a consultant add value to a client?

- Understand Them Better. How close are you listening?
- Serve Them Better.
- Provide Better Experiences.
- Help Them Achieve Their Goals.
- Create Resources For Them.
- Curate News and Content.
 - Make the Relationship Personal.
- Challenge Their Thinking.
6. Explain briefly and give examples of consultancy projects related to:

a. Business Planning and Development - A Business Development Plan is a document

that outlines how you implement your business development strategy. It can be a plan
for an individual, a practice or the firm as a whole. Its scope covers both the marketing
and sales functions, as they are so intertwined in most professional services firms.
b. Marketing Research - These procedures include market segmentation, product testing,
advertising testing, key driver analysis for satisfaction and loyalty, usability testing,
awareness and usage research, and pricing research (using techniques such as conjoint
analysis), among others.
c. New Product Development - It involves delineating sources of new ideas and methods
for generating them. Ideas for new products can be obtained from basic research using a
SWOT analysis, Market and consumer trends, company’s R&D department,
competitors, focus groups, employees, salespeople, corporate spies.
d. Information Systems Development - The providing of expert knowledge to a third
party for a fee. Consulting is most often used when a company needs an outside, expert
opinion regarding a business decision. For example, a company seeking to sell its
products abroad may look for a consultant familiar with the business practices of the
target country.
e. Staff Recruitment - Employers hire recruitment agencies to find job candidates.
Recruitment agencies structure their services and fees in several ways, including:
Contingency recruitment, with a salary-based fee paid only if a hire is made. Retained
or executive search, with an up-front fee paid for assistance filling a role.

7. Distinguish between the three types of problems a business entity may face.
Sole Proprietorship places all liabilities for finances and operations on the owner. The
owner's personal property is tied to the business, so he assumes a risk against his personal
assets should the business experience financial hardship. Annual income tax returns are
filed on a Form 1040, and the owner must also file self-employment taxes. The profits and
losses of the business are reported through the owner and are taxed at the individual rate.
The sole proprietorship business entity is the simplest form to set up, but the owner
typically must sell the business to retrieve his investment.
A partnership entity has two or more owners sharing equal control, unless the partnership
agreement states otherwise or the structure is set up as a limited partnership. Similar to a
sole proprietorship, the profits and losses of the business flow to the partners and are taxed
at the individual rate. Operating partners assume risks both legally and financially.
Creditors can attempt to collect debts from the partner’s personal assets. To recoup his
investment, a partner is generally required to sell his interest in the business.
A corporation can have an unlimited number of owners, also known as shareholders. In a
corporation, the business entity remains separate from the owners in legal and financial
matters. The profits and losses of a corporation are taxed at corporate rates, not individual
rates. If the corporation realizes a profit, it is paid out to shareholders who must then report
it as income and pay taxes on it at the individual rate. A shareholder in a privately held
corporation must sell his interest to regain his investment. In a publicly held corporation, a
shareholder can trade his shares on the open market