PROFESSIONAL ATTRIBUTES OF

MANAGEMENT CONSULTANTS
Chapter 4

Misajon, Mavreen Grace

A management consultant must possess the

following broad areas of skills:
According to Professor J. Owen Cherrington of Brigham Young University

Technical Skills
These include both understanding and experience in a technical
discipline such as information technology, marketing,
engineering and organizational behaviour

Interpersonal Skills
These include personal attributes that make an individual
amiable among people and effective in accomplishing desirable
objectives through people

A management consultant must possess the

following broad areas of skills:
According to Professor J. Owen Cherrington of Brigham Young University

Consulting Process Skills

These involve the ability to understand and use the following
approach in solving the business problems:

Identify the cause of problem or inefficiencies

Identify the alternative solutions
Select the most desirable alternative, and
Implement the chosen solution

Technical Skills
Educational Requirements
A. Technical Training
a. Length of Education
b. Type of Education

B. Common Core Requirement

a. Communication
b. Mathematics and statistics
c. Computer data processing

Interpersonal Skills or Developed

Attributes
1. Intelligence or capacity for logical thinking and reasoning
2. Integrity
3. Objectivity
4. Understanding of people
5. Judgment
6. Courage
7. Ambition
8. Psychological maturity
9. Physiological equilibrium

Interpersonal Skills or Developed

Attributes
10. Relationship-building skills
a)
b)
c)
d)
e)

An ability to build rapport and trust with the client

An ability to question effectively
An ability to communicate ideas succinctly and precisely
An ability to negotiate objective and outcomes
An ability to convince through verbal, written and visual
mediums
f) An ability to use information to make a case for a particular
course of action
g) An ability to develop selling strategies
h) An ability to work effectively as a member of a team
i) An ability to listen effectively
j) An ability to demonstrate leadership

Common Barriers to Effective Communication Between

the Client and the Consultant
1. Know-it-all-attitude and/or prejudice of some personnel
of the client
2. Inability to understand technical language
3. Inadequate background or knowledge
4. Resistance to change
5. Information overload

Interpersonal Skills or Developed

Attributes
11. Project Management skills
a)
b)
c)
d)

An ability to define objectives and outcomes

An ability to develop formal plans
An ability to sequence and prioritize tasks
An ability to manage the financial resources that are to be
invested in the consulting project
e) An ability to recognize the human expertise necessary to
deliver the project
f) An ability to manage personal time

Interpersonal Skills or Developed

Attributes
12. Analysis Skills
a) An ability to identify what information is available in a particular
situation
b) An ability to identify what information is needed in a particular
situation
c) An ability to process that information to identify the important
relationship within it
d) An ability to draw meaning form that information and use it to
support decision-making
e) An ability to recognize the businesss profile of strengths,
weaknesses and capabilities
f) An ability to recognize the opportunities and challenges the
environment offers the business

Interpersonal Skills or Developed

Attributes
12. Analysis Skills
g) An ability to assess the businesss financial situation
h) An ability to evaluate the businesss markets and how they are
developing
i) An ability to assess the businesss internal conditions
j) An ability to analyze the way in which decision making occurs
within the business

Consulting Process Skills

1. Problem definition phase
2. Identification of alternative solutions
3. Selection of the most desirable alternative
4. Presentation
5. Implementation Phase

PRACTICE STANDARDS AND

ETHICAL CONSIDERATIONS
Chapter 5

Abriz, Rhema Anne

MAS Practice Standards

1. Personal Characteristics
2. Competence
3. Due Care
4. Client Benefit
5. Understanding with the client
6. Planning, Supervision and Control
7. Sufficient Relevant Data
8. Communication of Results

MAS Practice Standards

1. Personal Characteristics
In performing Management Advisory Services, a
practitioner must act with integrity and objectivity and
be independent in mental attitude.

2. Competence
Engagement are to be performed by practitioners
having competence in the analytical approach and the
process, and in the technical subject matter under
consideration

MAS Practice Standards

3. Due Care
Due professional care is to be exercised in the
performance of a management advisory service
engagement.

4. Client Benefit
Before accepting an engagement, a practitioner is to
notify the client of any reservations he has regarding
anticipated benefits.

MAS Practice Standards

5. Understanding with Client
Before undertaking a engagement, a practitioner is to
inform his client of all significant matters related to
the engagement.

6. Planning, Supervision and Control

Engagements are to be adequately planned,
supervised and controlled.

MAS Practice Standards

7. Sufficient Relevant Data
Sufficient relevant data is to be obtained,
documented and evaluated in developing
conclusions and recommendations.

8. Communications of Results
All significant matter relating to the results of the
engagement are to be communicated to the client.

MAS Practice Standards

Interim Communications
It encourages the involvement of the management, helps
preserve managements role as a decision-maker, and
keeps management informed of progress towards the final
conclusions, recommendations, and accomplishments.
Interim Communications should normally summarize
a) Findings to date,
b) Work accomplished in relation to plan, and
c) When appropriate, tentative recommendations.

MAS Practice Standards

Final Report
It should be made by the client upon completion of an
engagement to ensure that results and recommendations
are communicated.

Ethical Considerations
Code of Ethics for Professional Accountants in the
Philippines Relevant to Management Consultancy
Services
SECTION 100.1 of the Revised Penal Code
A distinguishing mark of the accountancy profession is its
acceptance of the responsibility to act in the public interest.
Therefore, a professional accountants* responsibility is not
exclusively to satisfy the needs of an individual client or
employer. In acting in the public interest a professional
accountant should observe and comply with the ethical
requirements of this Code.

Ethical Considerations
Fundamental Principles
A professional accountant us required to comply with the
following fundamental principles:
a)
b)
c)
d)
e)

Integrity
Objectivity
Professional Competence and Due Care
Confidentiality
Professional Behavior

Ethical Conflict Resolution

Professional accountants should consider the
following as part of the resolution process:

Relevant Facts
Ethical Issues Involved
Fundamental principles related to the matter in question
Established internal procedures; and
Alternative course of action

Some Ethical Issues

How would you for instance, respond to these
challenges?
1) Should you change the high fees you can get away with
it?
2) Should you travel first class and bill the client?
3) Should you bill more than one client for the same basic
expense?
4) Should you accept an assignment from a clients
competitor?
5) Should you use tickets supplied by your client to bring
your spouse along?

Some Ethical Issues

Some are guidelines that a consultant may find useful
in determining whether he is doing the right thing or
not.
1) Does the activity improve the clients condition or merely his own?
2) Is the activity something that one will be comfortable explaining to
the client?
3) Is the activity something the consultant could be proud of and
would publicize as a trait?
4) Is there harm being done to anyone without their being able to
respond?
5) Is this treatment something the consultant would willingly subject
himself to?

Code of Ethics of Management

Consultants
This represent the attitude, principles and approaches that have been
found to contribute most to success and to make for equitable and
satisfactory client relationship.
The common principles found in this Code of Ethics can be broadly
classified into four areas:
I. Basic Responsibilities of Management Consultants
A.
B.
C.

II.

Integrity and objectivity

Independence
Confidential Information

Practice standards
A.
B.
C.

Professional Competence
Planning, supervision, and due care
Reporting results

III. Fee Structure Standards for Management Consultants

IV. Business-Conduct Standards for Management Consultants

Code of Ethics of Management

Consultants
I. Basic Responsibilities of Management
Consultants
A. Integrity and objectivity
1.
2.
3.

4.

Do not knowingly misrepresent facts and never subordinate

judgment to others.
Place the interests of clients ahead of personal interests
and serve the client integrity,
Inform the clients of any special relationships,
circumstances, of interests that might influence judgment or
impair objectivity.
Do not assume the role of management or take any
positions that might impair objectivity.

Code of Ethics of Management

Consultants
I. Basic Responsibilities of Management
Consultants
B. Independence
1.

2.
3.

4.

Take an independent position with the client, making certain

advice to a client is based on impartial consideration of all
pertinent facts and responsible opinions.
Do not serve an enterprise without independence wit h
respect to that enterprise.
Do not serve a client under terms or conditions that might
impair objectivity, independence or integrity. Reserve the
right to withdraw if conditions develop that interfere with the
successful conduct of the assignment.
Do not serve two or more competing clients in areas of vital
interest without informing each client.

Code of Ethics of Management

Consultants
I. Basic Responsibilities of Management
Consultants
C. Confidential Information
1.

2.
3.

Guard as confidential all information concerning the affairs

of a client that is gathered during the course of a
professional assignment.
Do not take advantage of material or inside information
resulting from a professional relationship with a client.
Do not disclose any confidential information obtained in the
course of a professional engagement except with the client
consent.

Code of Ethics of Management

Consultants
II. Practice Standards for Management
Consultants
A. Professional Competence
1.
2.
3.

Undertaking only engagements that cam be completed with

the professional competence.
Accept only assignments for which the necessary
qualifications are possessed.
Present qualifications for serving a client solely in terms of
competence, experience and standing.

Code of Ethics of Management

Consultants
II. Practice Standards for Management
Consultants
B.

Planning, Supervision and Due Care

1.

2.

3.
4.

Before accepting an assignment, confer with the client or

prospective client in sufficient detail and gather sufficient facts to
gain an adequate understanding of the problem, the scope of the
study needed to solve it, and the possible benefits that may accrue
to the client.
Accept only assignments believed to be beneficial to the clients,
and do not accept any assignment of such limited scope that the
client cannot be served effectively.
Adequate plan and supervise an engagement.
Assign personnel qualified by knowledge, experience and
character to give effective service in analyzing and solving the
particular problem or problems involved.

Code of Ethics of Management

Consultants
B.

Planning, Supervision and Due Care

5.

6.
7.

8.
9.

Provide the client with a written proposal that outlines the

objectives, scope, approach, and where possible the estimated
fee or fee basis for the proposed services, except where client
relationship make it unnecessary.
Exercise due professional care in the performance of an
engagement.
If conditions change during the engagement, discuss with the
client any changes in the objectives, scope, and approach or other
aspects of the engagement and obtain the clients agreement
(preferably in writing) to such changes before taking action on
them.
Obtain sufficient relevant data to afford a reasonable basis for
conclusions or recommendations in relation to an engagement.
Do not knowingly without permission use proprietary data,
procedures, materials, or techniques that others have developed
but not released for public use.

Code of Ethics of Management

Consultants
C. Reporting Results
1.

2.
3.

4.

Perform each assignment on an individual basis and

develop recommendations designed specifically for the
solution of each clients problems.
Develop solutions that are realistic and practical and that
can be implemented promptly and economically.
Acquaint client personnel with the principles, methods, and
techniques applied, so that the improvement suggested or
installed can be properly managed and continued after
completion of the engagement.
Maintain continuity of understanding and knowledge of
clients problems, and the work that has been done to solve
them, by maintaining appropriate files of reports submitted
to clients.

Code of Ethics of Management

Consultants
C. Reporting Results
5.
6.

Do not guarantee any specific result, such as the amount of

cost reduction or profit increase.
Do not permit your name to be used in conjunction with any
forecast of future transactions in a manner that could lead
to the belief that you vouch for the achievability of the
forecast.

Code of Ethics of Management

Consultants
III. Fees Structure Standards
1.

2.

3.
4.

Charge reasonable fees that commensurate with the nature of

services performed and responsibility assumed.
Reasonableness is based on service performed, time required,
experience, ability, reputation, responsibility assumed, and
benefits that accrue to the clients.
Do not offer or render professional services under arrangement
whereby no fee will be charged unless specified finding or
result is obtained, or whereby the fee is otherwise contingent
on the findings or result of the service.
Where feasible, agree with the client in advance on the fee or
fee basis.
Do not pay a fee or commission to obtain a client or franchise a
business practice; do not accept commission, fee, or other
valuable consideration for recommending products or services.

Code of Ethics of Management

Consultants
III. Fees Structure Standards
5.

Do not structure pricing or charging practices in a way that

impairs independence or objectivity or contributed to a conflict
of interest with the client.

Code of Ethics of Management

Consultants
IV. Business Conduct
1.
2.

3.
4.

5.

Strive continuously to advance and protect the standards of

the consulting profession.
Contribute to the development and understanding of better
ways to manage corporations, governmental organizations,
and other institutions on our society.
Share methods and techniques used in serving clients.
Avoid not only professional improprieties but also the
appearance of the improprieties, and never commit an act
discreditable to the profession.
Do not advertise service in a manner that is false, misleading,
deceptive, self-laudatory, or in any manner derogatory to the
dignity of the profession.

Code of Ethics of Management

Consultants
IV. Business Conduct
6.

Do not concurrently engage in any business occupation that

would create a conflict of interest in rendering professional
services.
7. Do not accept an assignment for a client while another
management consultant is serving that client unless satisfied
that any conflict between the two engagements are recognized
by, and have consent of the client.
8. Do not make offers of employment to consultants on the staff
of another consulting firm without first informing the other firm.
9. Do not solicit employees of clients, for the purpose of
employing them, except with the clients consent.
10. Do not associate, in a responsible capacity respecting client
work, with any consultant who does not adhere to the code of
professional ethics.

ORGANIZATION AND
MANAGEMENT OF MAS PRACTICE
Chapter 6

Tong, Wilson

Developing MAS Practice

The scope of a consulting practice is defined by
the expertise and experience of the consultant
within the practice. This can be technical
consulting in
a) Engineering
b) Industrial management
c) Marketing
d) Business management, or
e) Financial areas.

Developing MAS Practice

Prior to entering into a consulting practice, the prospective
consultant should conduct market research to identify
opportunities in the marketplace.
This will specifically involve
a)
b)
c)
d)

Study of the listings of management consultants

Survey of local CPA firms to determine which are offering
consulting services
Determination of possible oversaturation of consultants in ones
specialty
Identification of new services that may provide a competitive edge.

Developing MAS Practice

Equipped with necessary information, one needs to
establish an operating plan for the practice that is, to set
goals and objectives. These goals and objectives should
include
a) A desired income level
b) Potential clients, and
c) Strategies to obtain those clients

Organization of MAS Division

A consulting firm should periodically assess its needs with
respect to in-house knowledge and skills. Upon comparing
the knowledge and skills held by its current consultants
against its needs, the firm can determine the extent of its
deficiencies. Should such deficiencies exist, a consulting
firm can apply these approaches.
1) It can employ additional consultant with adequate
knowledge and skills or
2) It can undertake a variety of staff development
activities that are intended to endow the presently
employed consultant with needed knowledge and skills.

Organization of MAS Division

Staff Pyramid and Fee Structures

1
2
3
4

1
1-3
1-5
2-6

A graphic depiction of the consulting pyramid is shown above

Partners, Principal,
Director
Senior Managers.
Managers,
Supervisors
Senior Consultant,
Senior
Associate
Consultant, Staf

Organization of MAS Division

Billing Rates
The typical range of billing rates of the engagement team members in a
medium-sized consultancy firm with the four pyramid levels are as follows:

LEVEL
1

P10,000 to P20,000 per hour

P8,000 to P10,000 per hour

P5,000 to P8,000 per hour

P2,000 to P5,000 per hour

Defining the Target Level of Competence

of Management Consultants
Consulting competence is the ability of a
consultant to deliver specific agreed-upon
consulting services to a client on a profitable timeand-fee basis observing professional standards.

Organization of MAS Division

Defining the Target Level of Competence

of Management Consultants
The 4 major factors that must be considered when
defining the target level of competence are:
1.
2.
3.
4.

Scope of Practice Area

Service Variety
Client Requirements
Service Delivery Capability

Organization of MAS Division

MANAGEMENT OF MAS PRACTICE

Steps in Starting in the MAS Practice
A CPA who would want to star the MAS practice
formally may follow these suggested steps:
1. Determine and make a list of services that one can truly
offer with a confidence of the competence to perform
2. Review a client list classified by industry, size, etc. and
prepare a package tailored to fit the firms competence
and a particular type of clientele.
3. Prepare line-up for MAS Personnel.
4. Seek out advisory engagements.

MANAGEMENT OF MAS PRACTICE

Sources of MAS Engagements
The primary source of MAS engagements is the audit client
of the CPA.
Other possible sources of MAS clients are:
a) Referral from other CPAs.
b) Referral from audit clients.
c) Referral from businessmen.
d) Referral from financial and government institutions.
e) Referral from legal and other professional firms.

MANAGEMENT OF MAS PRACTICE

Determining Market Opportunities
Matters to consider carefully by the consultant:
1. The specific skills, talents, and attributes, and the
market that is suited to these abilities.
2. The spectrum of opportunities to apply to the services in
vertical and horizontal markets both in the public and
private sector.
3. Consulting opportunities can be created by political,
economic and social changes affecting ones are of
expertise and interest.

MANAGEMENT OF MAS PRACTICE

Determining Market Opportunities
What are the possibilities of market opportunities in the
private and public sector?
1. Private sector

Individuals
Small businesses
Medium-sized business
Large Companies

2. Public Sector

Government

3. Grant Consulting

MANAGEMENT OF MAS PRACTICE

Problem Areas in Rendering MAS by an Independent
Accounting Firm
The potential problem areas that mat arise in connection
with rendering Mas by an independent accounting firm are:
1) Questions as to the effect of the practice of MAS on the firms
independence.
2) Development and maintenance of a high level of competence in
MAS.
3) Questions of what fee to charge.
4) Question of AUDIT-MAS cooperation in obtaining engagements.
5) Question of regular communication between the MAS function and
the rest of the firm.

Financial Management of MAS

Practice
Financing can be provided by capital invested by you or
the initial group of consultants or by funds borrowed from
banks and others.
The following are initial and basic capital requirements.
1. Working Capital Requirements
2. Office facilities and equipment requirements
Revenues and Expenses of Management Consultants
Billings and Collections

Preparing a Business Plan for MAS

Practice
Why Prepare a Plan
A business plan is a written summary of what the
consultant hopes to accomplish by being in the business
and how to organize the resources to meet his/her goals. It
establishes the amount of financing or outside investment
required and when it is needed. It makes it much easier for
a lender and investor to assess the consultants financing
proposal.
The business plan format normally consists of four parts:
the introduction, the business concept, the financial plan
and the appendix.

SHORT QUIZ
Chapter 4. 5. 6