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Chap 1-MAS-Practice-Standards

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Chapter 1
MAS Practice Standards
6
MULTIPLE CHOICE
Basic concepts
1. People who make information-based decision go through a series of fundamental
steps in their decision-making process.
i. Evaluate alternative.
iv. Gather appropriate information.
ii. Identify constraints.
v. Choose the most acceptable alternative.
iii. Set objectives.
vi. Identify alternative.
The most desirable sequence in the above steps is:
A. iv, ii, iii, vi, i, v
B. ii, iii, iv, vi, i, v
C. iii, ii, iv, vi, i, v
D. ii, iii, vi, iv, I, v
(rpcpa)
1. C
? The most desirable sequence in a decision-making process.
 The normal decision-making process follows the sequence of a reasoned scientific
conclusion, as follows: set objectives, identify constraints, gather information, identify
alternative, evaluate alternative, and choose the best alternative. On the given, the
sequence is 3-2-4-6-1-5 (choice-letter “c” is correct.)
2.
A CPA should reject management advisory services engagement if
A. It would require him to make management decisions for an audit client.
B. The proposed engagement is not accounting related.
C. His recommendations are to be subjected to a review by the client.
D. He audits the financial statements of a subsidiary of the prospective client.
(rpcpa)
2
A
? A statement on when should a CPA reject management advisory services engagement.
 A CPA advisor may render study, analyses, research, interpretation, comment, and the
like except for one authority which exclusively belongs to the manager- that is, the power
to make decisions. Therefore, any advisory engagement that requires him to make
decisions should be rejected. Hence, choice-letter “a” is the answer.
Choice-letter “b”, “c” and “d” are all acceptable. He may accept non-accounting and
non-finance related engagements as long as he has the competence to do it, and follows
the other MAS practice standards in the process of undertaking the advisory engagement.
His recommendations may be subject to a review by the client who hires his services and
who will be studying further his recommendations. Even if he is an auditor of the financial
statements of the prospective client or any of its affiliates or subsidiaries, a CPA may
serve as an advisor to the client.
3. Which of the following is not a characteristic of management advisory services?
A. MAS is broad in concept.
B. MAS involves problem-solving affecting the future operations of the client.
C. Beneficiary of service is management.
D. MAS is repetitive as far as the same client is concerned.
(rpcpa)
3. D
? The one that is not a characteristic of management advisory services.
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7
 Choice-letter “d” is correct, it is not a characteristic of management advisory services.
MAS is not repetitive as far as the same client is concerned. Once a particular
problem area of operations is solved, the same is not expected to recur least the
solution applied is ineffective which would in return speak of the incompetence of the
CPA-Advisor.
Choice-letters “a”, “b”, and “c” are some of the characteristics of management
advisory services. MAS is broad in concept, involves problem-solving affecting the
future operations of the client, and its beneficiary of service is the management.
Other characteristics of MAS are: it does not adhere to GAAP, it deals with specific
organizational problems, it uses knowledge and techniques adopted from different
fields of science, and it is also covered by the standards governing the practice of
accountancy.
4. The following characterize management advisory services, except
A. Involves decisions for the future.
B. Broader in scope and varied in nature.
C. Utilize more junior staff than senior members of the firm.
D. Relate to specific problems where expert help is required.
(rpcpa)
4. C
? The one that is not the characteristics of the management advisory services.
 The area of management advisory services has some of the following characteristics:
it involves decisions for the future (choice-letter “a”), it covers a wide area of
managerial interests (choice-letter b”), it deals with a specific problem where an
expert’s help is required (choice-letter d”).
However, it uses few junior staff as the engagement is highly technical in nature
and requires the competence of the advisor (choice-letter “c” is incorrect, and
therefore is the correct answer); it is not repetitive nor recurring in nature; it applies
technical knowledge of various fields of discipline; and, it is not governed by GAAP.
5. Which of the following is not a characteristic of management services?
A. Design and/or installation of accounting system.
B. Financial analysis for project feasibility studies.
C. Cost analysis of major investment decisions.
D. None of the above.
(rpcpa)
5. D
? The one that is not a characteristic of management services.
 All of the given choices are areas that relate to management services, such as
design and/or installation of accounting system, financial analysis for project
feasibility study, and cost analysis of major investment decisions. Therefore, the
correct answer is choice-letter “d”.
6. Which of the following is not a characteristic of management services
A. A wider variety of assignments are encountered in MAS than in audit.
B. MAS engagements are recurring.
C. MAS pinpoints actions to be taken, the benefits of which will be received in the
future.
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8
D. In MAS engagements, the nature of work involved requires a lesser need for
junior assistance.
(rpcpa)
6. B
? The one that is not a characteristic of management services.
 Choice-letter “b” is the correct answer because MAS engagements are not recurring
in nature. Choice-letters “a”, “c”, and “d” are all characteristics of management
services. MAS encompasses a wider variety of assignments than in audit. MAS
pinpoints action to be taken, the benefit of which will be received in the future, and
MAS requires a lesser need for junior assistance.
7. Management services of certified public accountants cover all of the following, except
A. Project feasibility studies.
B. System design development and implementation.
C. Organizational development and planning.
D. Audit, tax, and legal services.
(rpcpa)
7. D
? The area not covered in the practice of management advisory services.
 The practice of management advisory services (MAS) does not cover those
traditional and originating fields of accountancy such as auditing, tax services, and
legal services. These traditional areas of services by CPAs have already been in
existence before the advent of the MAS practice, and have already developed
extensive and highly technical body of knowledge where a specialized area of
competence is available. Choice-letter “d” is the correct answer.
MAS includes all areas of serving management outside the traditional services of
auditing, tax, and legal practice. MAS is done in the areas of finance and accounting,
industrial engineering, marketing, production, logistics, human resources, information
and communications technology, operations research, quality control, customer
services, marketing, and others which are of concern to management.
8.
8.
A certified public accountant’s scope of management services is broad and covers all of
the following except
A. Change in management engagements.
B. Computerization engagements.
C. Audit engagements.
D. Re-engineering engagements.
(rpcpa)
C
? The choice which is not covered in the practice of management services.
 Choice-letters “a”, ”b”, and “c” are covered in the practice of management services.
Change in management engagement deals with minimizing organizational uncertainties
for better preparation and use of resources which will lead to favorable results Reengineering job is for a strategic and structural change in the entirety of the organization
or any of its major systems and processes with the aim of simplifying work and process
for better productivity, lesser error and produce favorable economic results.
Computerization engagements relate to the dynamic field of information technology.
Choice-letter “c” refers to external auditing which is a traditional and specialized field of
accountancy that had already developed its core professional principles, standards,
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systems and approaches that make it a stand-alone specialized field of accountancy, and
not covered in the MAS engagements.
9.
A management advisory services engagement generally involves the following activities
in what order?
I. Post engagement follow-up.
II. Implementing the recommendation.
III. Conducting the engagement.
IV. Negotiating the engagement.
V. Preparing for and starting the engagement.
VI. Evaluating the engagement.
VII. Preparing and representing the report and recommendations.
A. VII, VI, V, IV, III, II and I.
B. III, IV, V, VI, VII, I, and II.
C. IV, III, V, VI, II, VII, and I.
D. IV, V, III, VII, II, VI, and I.
(rpcpa)
9. D
? The general steps in undertaking management advisory services engagement.
 Choice-letter “d” is correct. The management advisory services begins from
negotiating the engagement, then preparing for and starting the engagement,
conducting the engagement, preparing and presenting the report and
recommendation, implementing the recommendation, evaluating the engagement,
and post-engagement follow-up.
10. The activities in a management system’s control process can be grouped into four:
i. Measurement of actual performance.
ii. Deciding and implementing corrective action.
iii. Determining standards of performance.
iv. Comparing actual performance versus standards and analyzing results.
The above activities must be done in this sequence:
A. iv, iii, ii, i
B. iii, i iv, ii
C. i, iii iv, ii
D. iii, iv, i, ii
(rpcpa)
10. B
? The sequence in a management system’s control process.
 The control process referred to here is the operating control process. It is done after
the planning process is competed.
The general steps followed in the operating control process are: establishment of
control standards (or standards of performance), measurement of actual
performance, comparison of actual performance with established standards and
analysis of variances, decision and implementation of remedial/corrective actions.
Choice-letter “b” is correct.
11. As a consultant, the CPA practitioner should
A. Exercise administrative control over the client’s staff to avoid unnecessary delays
in implementation.
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B. Encourage dependence of the client on the consultant’s staff so as to pinpoint
clear responsibility in implementing system.
C. Not take responsibility for making decisions and policy judgments in MAS
engagements.
D. Conduct his engagement as if he is a member of the client’s organization. (rpcpa)
11. C
? A statement describing what a CPA practitioner in MAS should do.
 A CPA-consultant and a CPA-advisor should not take responsibility for making
decisions and policy judgments in MAS engagements (choice-letter “c” is the correct
answer).
A professional CPA-advisor has a duty of identifying the problems of the clientorganization in a specific or general business sense, analyzing the causes and
effects of the problem, developing and recommending remedial alternatives, and
assisting in the execution and evaluation as to the effectiveness of the alternative
chosen. Still, the CPA-advisor should not make decisions on behalf of the client. The
power to make decisions rests solely on the hand of the management and not of the
advisor.
Choice-letter “a” is incorrect because the CPA-Advisor should not exercise
administrative control over, but rather coordinate with, the client’s staff. Choice-letter
“b” is also incorrect because a CPA-Advisor should not encourage dependence of
the client on the consultant’s staff but rather should orient the client on the technique
of avoiding and/or solving the same problem in the future. Choice-letter “d” is
incorrect because a CPA-Advisor should always maintain impartiality in his
professional conduct and therefore should not act as if he an employee of the client.
12. Which of the following is not an area related to the performance of management
services by independent accounting firms?
A. Introducing new ideas, concepts and methods to management.
B. Improving existing policies, methods and procedures.
C. Performing special studies, preparing recommendations, and formulating plans
and programs.
D. Performing management functions and making decisions.
(rpcpa)
12. D
? An area not related to the performance of management services.
 Choice-letter “d” is the correct answer because performing management functions
and making decisions are not areas rendered in the practice of management
services. A CPA-Advisor who is an independent outsider in the organization only
advises management and he remains as such in the performance of MAS
assignments. Once, the CPA-Advisor makes decisions for and on behalf of his client,
he ceases to be an advisor and automatically becomes a manager.
Choice-letters “a”, “b”, and “c” are all areas related to the performance of
management services such as, but not exclusive to, introducing new ideas,
concepts, and methods to management; improving existing policies, methods, and
procedures; and, performing special studies, preparing recommendations, and
formulating plans and programs for his client.
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11
13. Which of the following is not a qualification of a CPA in MAS practice?
A. Familiarity with the client’s financial accounting and internal control systems.
B. Analytical experience in problem-solving.
C. Professional independence, objectivity, and integrity.
D. Auditor of the client.
(rpcpa)
13. D
? The one that is not a qualification of a CPA in MAS practice.
 Choice-letter “d” is correct, being the auditor of the client does not automatically
qualify the CPA to render MAS practice to his client. This is because the primary
criterion in accepting auditing is independence while the paramount criterion in
accepting MAS engagement is competence.
Choice-letters “b”, “c”, and “d” are qualifications of a CPA in MAS practice.
Choice-letters “a” and “b” relate to primary standard of competence while choiceletter “c” relates to the secondary standards of independence and integrity which
should always be maintained by the CPA in his professional dealings.
14. Which of the following statements is not true?
A. In the rendition of MAS, independence must be observed so as to maintain the
essential requisite of impartiality and objectivity.
B. All provisions of the code of professional ethics are applicable in the practice of
MAS except those rules related to the expression of an opinion on financial
statements.
C. MAS serves only in the areas of accounting and finance.
D. Before accepting an engagement, a practitioner should notify the client of any
reservation he has regarding anticipated benefits.
(rpcpa)
14. C
? The one that is not a true statement.
 Choice-letter “c” is not a true statement. MAS serves not only in the area of
accounting and finance but in all other areas of management interests ranging from
human relations, marketing, channels of distribution, design and engineering,
customer services, industrial engineering, logistics, strategic planning, and other
areas of management.
Choice-letters “a”, “b”, and “d” are all true statements with regard to MAS
practice. Choice-letter ”a” refers to independence in the MAS practice, choice-letter
“b” refers to compliance and adherence to professional ethics save for those that
specifically relate to the expression of opinion on financial statements under audit,
and choice-letter “d” relates to the MAS Practice Standard of client benefit.
15, Identify the following statements as true or false.
Statement 1.
MAS principally involves the consultative services to management in
his decision making.
Statement 2.
MAS consultation, unlike MAS engagement, generally involves
advise of information by a CPA in which an analytical process is
applied.
Statement 3.
Because the CPA must be independent, he must not allow the client
to participate in any phase of his engagement.
(rpcpa)
Chapter 1
A.
B.
C.
D.
MAS Practice Standards
Statement 1
True
False
False
True
Statement 2
True
True
False
False
12
Statement 3
False
False
False
False
15. D
? Identify the given statements as true or false.
 Choice-letter “d” is correct. Statement 1 is true. Statement 2 is false because MAS
consultancy, like MAS advisory services, applies analytical processes and
approaches. Statement 3 is false because the client, inasmuch as he owns the
business organization, always reserves the right to make decisions with respect to
the firm and that does not exclude deciding for or against the continuance or
interference in the advisory services conducted by an independent professional
service provider, such as a CPA engaged in MAS practice.
16. Indicate whether the following statements are true or false.
Statement 1.
A CPA firm’s primary purpose of performing MAS services is to
enable the staff members to acquire the necessary continuing
education in all areas of business.
Statement 2.
In management audit, a team with a mix of members who are
accountants and non-accountants will produce a desirable
combination of specialists and will offer a cross fertilization of ideas
from different business fields.
Statement 3.
An area of MAS which is directly related to accounting and finance
functions is project feasibility study.
(rpcpa)
True
False
A.
Statement 1
Statement 2
B.
Statement 2
Statement 1
C.
Statement 3
Statement 2
D.
Statement 1
Statement 3
16. B
? Identify the given statements as true or false.
 Choice-letter “b’ is correct. Statement 1 is false because it violates the standard of
competence and client benefit. Statement 2 is true. Statement 3 is false because
project feasibility study does not only relate to finance and accounting and is
therefore included in the non-finance and accounting services.
MAS Practice Standards
17. The following statements refer to competence of CPAs in management advisory
services, except
A. In concept, it refers to the technical qualification of the practitioner and his ability
to supervise and evaluate the quality of work of his staff assigned to the
engagement to be responsible for the successful completion of the project.
B. It is acquired by education, self-study, attendance to professional development
courses, actual experience in MS work, and research.
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13
C. It is the ability to identify client’s needs, use analytical approach and process,
apply technical knowledge, communicate recommendations and assist in
implementation.
D. It must be retained in the rendition of MAS work and it can be impaired if the CPA
performs decision-making for the client or acts as employee of the client. (rpcpa)
17. D
? The one that does not refer to the standard of competence.
 Choice-letter “d” is the correct answer because it refers to the standard of
independence where a CPA advisor should not make decisions for and on behalf of
his client or acts as if he is an employee or officer of his client.
Choice-letter “a”, “b”, and “c” all relate to the standard of competence.
Competence, which is the paramount standard of all the nine (9) MAS practice
standards, requires the CPA advisor to have the technical skills, expertise, and
mastery to render the professional work demanded by the management. He has a
reputable understanding and applications of concepts, principles, and methods
needed in a given business advisory service. His skills are acquired through formal
education (i.e. schooling), on-the-job training, researches, attendance in seminars,
conventions, fora, discussions, etc., actual experience in MS work, self-study, and
other modes of obtaining competence. Competence is the ability to identify client’s
needs and problems (not the symptoms), use analytical approach and processes
throughout the engagement process, apply technical knowledge, communicate
findings, conclusions and recommendations, and assist in the implementation of the
client’s decision.
18. Competence in management advisory services is acquired by
A. Education.
B. Auditing and other experience.
C. Actual performance of management advisory services.
D. All of the above.
(rpcpa)
18. D
? The mode of acquiring competence in management advisory services.
 Competence relates more to the skills of doing things with reasonable accuracy at
the least possible time and cost but with the optimum benefits. Competence may be
acquired through formal and informal education. Formal education is evidenced by
diplomas, certificates, recognition, and similar proof of getting knowledge.
Informal education relates more to the process of acquiring competence in a
given area by actual performance of the CPA-Advisor. Competence may be acquired
from auditing and other experience, actual performance of management advisory
services, researches, studies, and similar modes of getting knowledge and skills.
Choice-letter “d” is correct.
19. Which of the following statements is true?
A. Adequate training and experience in both analytical approach and process in the
particular undertaking are requisites for the CPA to be involved in a
management service engagement.
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14
B. A CPA with MBA and PhD degrees is automatically qualified to render
management services.
C. Competence as a standard in the rendition of management services by a CPA
may be equated to having scholarly preparation to include the usual
baccalaureate degree, an MBA and other post-graduate studies.
D. A certified public accountant by virtue of having the necessary academic
preparation and by hurdling the licensure examinations required to have a CPA
license can readily render management services to the public.
(rpcpa)
19. A
? The true statement with regard to management advisory services.
 Choice-letter “a” deals with competence. It is the ability of a MAS practitioner to apply
analytical approach and processes using his technical knowledge and expertise
which are required through formal education, training, under study, apprenticeship,
on-the-job training, professional experience, advanced studies, researches, and the
like. Statement letter “a” is a true statement..
Choice-letter “b” is false because a CPA is not automatically qualified to render
management advisory services even if he had earned his MBA and PhD degrees; the
qualification is competence and not merely educational attainment. Choice-letter “c”
is incorrect because competence is not equated to having excellent and scholarly
preparation. Competence refers to the ability to perform tasks with the required
mastery of knowledge, skills and expertise and come out with the optimum output at
the least cost involved. Competence is not heavily related to academic preparation
but more on the hands-on experience of a person. Choice-letter “d” is also incorrect
because having completed the necessary college degree in accountancy and hurdle
the CPA licensure examinations do not automatically qualify a CPA to handle
management advisory services inasmuch as competence in practice is the primary
consideration in accepting a management advisory services engagement.
20. Which of the following will not impair the independence of a CPA in the rendition of
management services?
A. The CPA performs decision-making services for his client.
B. The CPA performs services wherein he is in effect acting as an employee of the
client.
C. The CPA losses his objectivity and acts in a manner as if he is advocating for the
interest of his client.
D. The CPA does not extend his services beyond the presentation of
recommendations of giving of advice.
(rpcpa)
20. D
? The one that will not impair independence of a CPA in the rendition of management
services.
 Independence is impaired when the CPA is influenced as to his decision. In his
professional endeavor, the CPA must act with impartiality and fairness, devoid of bias
that may produce distorted information leading to inappropriate management
decisions. However, when the CPA does not extend his services beyond the
presentation of recommendation of giving advice, he does not impair his
independence, and choice-letter “d” is correct.
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15
Choice-letters “a”, “b”, and “c” are all situations where the practicing CPA looses
his independence, such as performing decision-making services for his client, or
performing services wherein he is in effect acting as an employee of the client, or
acts in a manner as if he is advocating for the interest of his client.
21. These statements relate to MAS standards.
i. A practitioner is to notify the client of any reservation he has regarding
anticipated benefits.
ii. Throughout the engagement, there ought to be a systematic critical review of
accomplishments and work should be done within the framework of the Code of
Ethics and other professional standards.
iii. During the engagement, should there be significant changes between cost and
anticipated benefits, the client should be informed.
iv. Before the engagement, the practitioner must make arrangement with, and inform
the client on significant matters related to the engagement in writing.
Of these statements, which pertains to the practice standard on client benefit?
A. Statements I and iii only.
B. All statements.
C. Statement i only.
D. Statements i, iii and iv only.
(rpcpa)
21. A
? The statement(s) that pertain to MAS standards on client benefit.
 Statements 1 and 3 are directly related to the MAS standards on client benefit.
Statements 2 relates to planning and supervision standard while statement 4 deals
with the standard on understanding with the client. Hence, the correct answer of
choice-letter “a”.
22. Mr. Rey Carlos, a CPA firms’ partner-in-charge of quality assurance and review is arguing
with Mr. Fortuna, the consulting partner regarding the question on independence as Mr.
Fortuna is presently rendering consulting services to T. Ang and Nga Co., an audit client
of the firm. Related to this issue of independence, all of the following statements are not
valid except
A. Independence is never sacrificed for as long as the auditor/consultant is correct in his
for the client
B. A CPA who renders both audit and consulting services to a client by virtue of his
competence/expertise and extensive knowledge of the client’s business is in the best
position to render decisions for the client and should do so.
C. The client is the ultimate decision maker and the auditor/ and or consultant should not
make decisions for the client
D. It is up to professional judgement and discretion of the auditor/consultant to render
decisions for the client for as long as his professional fees are commensurate to the
benefit that the client will derive from the engagement.
(rpcpa)
22. C
? A statement about independence in consultancy.
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16
 Choice-letter “b” is the statement about independence in consultancy. Choice-letters “a”,
and “d” are incorrect statements with regard to independence because they require the
CPA-advisor to make decisions on behalf of the client.
23. After preliminary audit arrangement have been made, an engagement confirmation letter
should be sent to the client. The letter usually would not include:
A. An estimate of the time to be spent on the audit work by audit staff and management.
B. A reference to the auditor’s responsibility for the detection of errors or irregularities.
C. A statement that management advisory services would be made available upon
request.
D. A statement that management letter will be issued outlining comments and
suggestions as to any procedures requiring the client’s attention.
(rpcpa)
23. C
? The one not included in a confirmation letter sent to the client after an audit engagement.
 Among the choices given, what is not to be found in an audit confirmation letter is a
statement that management advisory services would be made available upon request
(choice-letter “c”).
Choice-letter “a”, “b”, and “d” are included in an audit confirmation letter.
Accountancy Act of 2004 and Code of Ethics for Professional Accountants
24. The Revised Accountancy Law incorporates the Code of Professional Ethics for CPAs.
The provision of management advisory services is among the areas for public accounting.
It is, however, not exclusive to CPAs. Considering these premises, which of the following
statements is applicable?
A. Management advisory services as a field of practice is considered as an integral part
of public accounting thus, the Code of Professional Ethics for CPAs covers
management advisory services.
B. CPAs in the practice of audit and management consulting services may advertise and
charge contingent fees.
C. The practice of management advisory services should not be extended to existing
audit clients since this will adversely affect the CPAs independence.
D. CPAs in the practice of management advisory services are not bound by the Board of
Accountancy Law but are bound by the said law in the practice of audit
(rpcpa)
24. A
? A statement that is applicable to the Revised Accountancy Law.
 Choice letter “a” is correct because management advisory services is considered as an
integral part of public accounting within the meaning of the provisions of the Accountancy
Act of 2004. Choice letter “b” is incorrect because certified public accountants are not
allowed to advertise nor charge contingent fees in the conduct of their practice. Choiceletter “c” is also incorrect because there is no express provision in the law prohibiting
CPAs to extend their professional services to their existing audit clients. Choice-letter “d”
is also incorrect is definitely incorrect because all CPAs, regardless of specific field of
endeavor, as long as they are in the practice of accountancy are bound to adhere to the
provisions of Accountancy Act of 2004.
25. Which of the following statements is false?
A. CPAs provide management services to go around the ethical constraints as
mandated by the Accountancy Act.
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17
B. Businesses hire management consultants to help define specific problems and
develop solutions.
C. Included in the practice of consulting is the provision of confidential service in
which the identity of the client is concealed.
D. CPAs performing management services may be considered to be in the practice
of management consulting.
(rpcpa)
25. A
? The false statement with regard to management advisory services.
 Choice-letter “a” is a false statement because CPA’s who are in the practice of MAS
are still covered by the provisions of the Accountancy Act of 2004 and the Code of
Ethics for Professional Accountants since they are still CPAs in the practice of their
profession, except those provisions that pertain to the expression of opinion of
financial statements under audit.
Choice-letter “b”, “c”, and “d” are true statements with regard to the practice of
management advisory services.
26. Which of the following statements is not acceptable?
A. A CPA represents three major players in the industry in rationalizing the
industry’s incentive before the government public hearings.
B. A CPA shares with a new and substantial client information regarding another
client belonging to the same industry.
C. A CPA provides consulting services to an existing audit client.
D. A CPA offers and provides consulting services to two major competing clients.
(rpcpa)
26. B
? The statement that is not acceptable.
 A CPA-advisor should not make a decision on behalf of the management.
Additionally, the CPA advisor should comply with provisions contained in
Accountancy Act of 2004 and the Code of Ethics for Professional Accountants and
those guidelines mentioned in the MAS Practice Standards.
Choice-letter “b” is not acceptable for a CPA-Advisor to share with a client any
classified, material, confidential, or substantial information regarding another client.
This relates to the rule and ethics of “confidentiality with the client” of which the CPA
is bound to observe and uphold. Choice letter “b” is the correct answer.
Choice-letters “a”, “c”, and “d” are all acceptable for a CPA advisor to do because
they do not violate any provisions in the Accountancy Act of 2004, Code of Ethics for
Professional Accountants, and does not run counter to any of the MAS Practice
Standards.
27. Indicate the statements as either true or false.
Statement 1.
CPAs in MAS practice must observe the general provision of the
Code of Professional Ethics for CPAs, as well as the provision
thereof of CPAs in Public Accounting, except those provisions of
expression of opinion on financial statements.
Statement 2.
Management consultancy is an exclusive field of practice for CPAs
and is regulated by law.
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18
Statement 3.
A.
B.
C.
D.
Although management services (MS) extend beyond the traditional
accounting services, MS practitioners are still bound by the rules of
professional ethics in the practice of accounting in general. (rpcpa)
Statement 1
Statement 3
Statement 3
True
False
False
False
True
True
False
True
True
True
False
True
27. D
? Identify the given statements as true or false.
 Choice-letter “d” is correct. Statement 1 is true. Statement 2 is false because the
filed of management advisory services is open to all professionals and nonprofessionals alike who have the necessary competence and the trust of the
manager. Statement 3 is true.
 done 
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