6/22/2016

INITIAL AND BASIC CAPITAL

REQUIREMENTS
Working Capital Requirements

FINANCIAL MANAGEMENT
OF AN MAS PRACTICE

Office Facilities and Equipment

Requirements
Revenues and Expenses of Management
Consultants
Billings and Collections

STAGES OF MANAGEMENT
CONSULTING ENGAGEMENT

I. Negotiating the engagement

I.

II. Engagement planning

1. Ascertain the real problem and what is required to reach a

solution.

III. Conducting a consulting assignment

2. Identify the end product of the assignment.

Negotiating the engagement

A. Problem identification and solution

3. Agree on the role to be performed by the CPA.

B. Identification of suitable and accurate sources of information

4. Agree on the basis of for establishing and billing fees.

C. Data analysis and diagnosis

5. Confirm understanding in writing

D. Solution development
E. Preparation and presentation of the report and recommended solution
F. Implementation
G. Follow-up procedure of the implemented solution
H. Evaluating the engagement and post-engagement follow-up

Contents of a Proposal Letter

II. Engagement Planning

1. The objectives and benefits of the engagement.

A detailed work plan is developed which will become the

blueprint of the remainder of the project.

2. The scope of the work and role of a CPA.

3. The approach to the study.
4. The project organization.
5. Fees and billing arrangement.
6. Firm qualifications, where appropriate.

6/22/2016

Contents of Engagement Program or

Work Plan

III. Conducting a Consulting

Assignment

The objectives and description of each task to be accomplished.

A. Problem Identification and Desired Outcome

A description of tangible output required at completion of each

task.
A list of manpower required.

1. Identify the problem

- involves problem finding and problem stating
2. Objectives of the problem-solving process

A list of the personnel assigned.

- typical objectives are concerned with performance,

efficiency, economy, control, security or availability of
information

The starting and completion dates.

Project costs.

A. Problem Identification and Desired

Outcome

A. Problem Identification and Desired

Outcome

3. Scope of the problem

7. Human elements of the problem

- extent of the needed response or solution to the problem

4. Intensity of the problem

8. Support system surrounding the problem

9. Tracking systems related to the problem

- degree of difficulty or adverse effects they bring to the interested

parties

10. Institutional process for managing the problem

- could be formal or informal

5. Time dimension of the problem

6. Location of the problem
- geographic point(s) where the problem occurs

B. Identification of Suitable and Accurate

Sources of Information and Data Gathering
Internal Sources
People
Client Documentations
Relationships

External Sources
Customers

Fact-Gathering Techniques
1. Interviews
- a series of interviews with client personnel is considered the best
way to zero in on problems
- can be conducted at all levels of the organization
2. Questionnaire
- best used when the persons from whom the consultant wants
information are physically removed and travel is prohibited or when
numerous persons are to be asked and the facts to be so determined
are verifiable from other sources

6/22/2016

Fact-Gathering Techniques

C. Data Analysis and Diagnosis

3. Observation

1. Decision-Level Analysis

- useful in gathering facts prior to an interview, in verifying

statements made during an interview, and in ascertaining relationships
between individuals

- depicting varied interrelationships among decisions made

throughout the segments and levels of the organization

4. Document Gathering
- collecting all relevant documents such as source documents,
work sheets and reports

2. Input/Output Analysis
- this does not include analysis of process, data requirements,
information flows, or the related decisions

5. Charting
-pictorial representation of a dimension of the clients organization
or of its activities

C. Data Analysis and Diagnosis

3. Structured Analysis
- begin at the top level and then work down to the lowest
activity level
4. Less-Structured Analysis
-could be employed to counteract some limitations of
structured approaches
- brainstorming and delphi approach