MANAGEMENT CONSULTANCY - Solutions Manual

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CHAPTER 1

OVERVIEW OF

MANAGEMENT ADVISORY SERVICES

(MAS) BY CPAs

I. Questions

1. Among 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.

3. Greater competition among businesses so that new management

techniques will have to be applied.

4. Recognition of the importance of accurate and timely information in

decision-making.

5. Inability to have a complete line-up of professional management.

2. Small companies need management consultants to provide them with

professional assistance because they are usually not in a position to hire a

complete line-up of well-rounded management. Owners and their

executives are usually burdened with the responsibility of managing the

day-to-day operations of the company so that not enough time is devoted

to many staff services that are essential to the continuous growth and

success of the business.

3. The objectives of management of a business organization are:

Primary:

To maximize the return on the investors’ capital and at the same time

providing for the safety of such resources entrusted to them.

Secondary:

To be able to discharge its social and legal responsibilities towards

its employees, customers, the community and the government.

4. Refer to page 9, par(s) 3 and 4

Chapter 1 Overview of Management Advisory Services

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5. Refer to page 12

6. Refer to page 11

7. Refer to page 4, par 4

8. Refer to pages 6 and 7

9. Refer to pages 7 and 8

10. Refer to pages 10 and 11

II. Multiple Choice Questions

1. D

2. C

3. C

4. D

5. B