MAS 1t 2020-2021

1. Management accounting is an integral part of the management process.

As such, it provides essential information for the following objectives
except
a. Maintaining the current level of resource utilization as well as
internal and external communication.
b. Measuring and evaluating performance.
c. Planning strategies and controlling current activities of the
organization.
d. Enhancing objectivity in decision-making.

2. Which type of authority do management accountants generally exercise?

a. Functional b. Company c. Line d. Staff

3. You were newly appointed as controller of CZX Corporation. Among the

jobs your department would do include the following:
a. Cash receipts, cash disbursements, general accounting, taxation,
financial accounting analysis, and internal auditing.
b. Financial reporting, strategic planning, managerial accounting,
taxation, financial statement analysis, and internal accounting.
c. Financial accounting, managerial accounting, cost accounting, inventory
accounting, payroll accounting, tax accounting and sales forecasting.
d. Tax accounting, managerial accounting, internal auditing, general
accounting.

4. Controllership has attained special recognition in corporate management

as business expands in complexity and reach, and as the controller exerts
influence for management to take organization’s goals. Controllership and
treasurership constitute corporate finance. These are among the controller’s
traditional functions:
1. Tax management.
2. Financial reporting and interpretation.
3. Credit management.
4. Sourcing and investing of funds.
5. Reporting to government regulatory agencies.
6. Risk management.
7. Economic appraisal.
8. Planning for control.
a. All eight items. c. Items 1, 2, 3, 4, 5, 7, and 8 only.
b. Items 1, 2, 5, 7, and 8 only. d. 2, 3, 5, and 7, and 8 only.

5. The primary purpose of management advisory services is

a. To conduct special studies, preparation of recommendation, development
plans and programs, and provision of advise and assistance in their
implementation.
b. To provide service or to fulfill some social need.
c. To improve the client’s use of its capabilities & resources to achieve
the objectives of the organization.
d. To earn the best rate of return on resources entrusted to its care with
safety of investment being taken into account and consistent with the firm’s
social and legal responsibilities.

6. Which of the following statements is not true?

a. In the rendition of MAS, independence must be observed so as to
maintain the essential requisites of impartiality and objectivity.
b. All provisions of the code of professional ethics are applicable to 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 reservations he has regarding anticipated benefits.

7. Which of the following acts is not performed by an independent CPA

engaged to install an accounting system?
a. Formulation of the chart of accounts
b. Design of business and accounting forms
c. Supervision of application of system and procedures recommended
d. Preparation of an accounting manual.

8. The following characterize management advisory services except

a. Involve decision 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.

9. 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 pinpoint actions to be taken, the benefits of which will be
received in the future.
d. In MAS engagements, the nature of work involved requires a lesser need
for junior assistance.

10. Which of the following is not a characteristic of Management Advisory

Services?
a. MAS is broad in scope
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

11. Which of the following types of management services is normally related

to accounting and finance?
a. Management audit.
b. Marketing forecasts.
c. Costs determination of alternatives in collective bargaining
agreements.
d. Job evaluation and salary administration.

12. Which of the following types of management services is not directly

related to accounting and finance functions?
a. Cost analysis of major investment decision.
b. Long range planning.
c. Design, installation and review of budgetary system.
d. Valuation of capital stock of companies for purposes of merger or
sales.

13. A certified public accountant’s scope of management services is broad

and covers all of the following except
a. Change management engagements. c. Audit engagements.
b. Computerization engagements. d. Re-engineering jobs.

14. Which of the following is not classifiable as a management advisory

service by CPAs?
a. Systems design. c. Make or buy analysis.
b. Project feasibility study. d. Assistance in budgeting.

15. Which of the following is not classifiable as a management advisory

service by CPAs?
a. Annual financial planning and budgeting. c. Information systems.
b. Public relations work. d. Lease-or-buy analysis.

16. Management services of certified public accountant cover all of the

following except
a. Project feasibility studies. c. Organizational development and
planning.
b. Systems design, development and implementation. d. Audit, tax
and legal services.

17. Which of the following does not relate to management services by CPAs?
a. Design and/or installation of accounting systems.
c. Cost analysis of major investment decisions.
b. Financial analysis for project feasibility studies.
d. None of the above.
18. 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

19. A management advisory services engagement 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 presenting report and recommendations.
a. VII, VI, V, IV, III, II and I. c. IV, III, V, VI, II, VII, and
I.
b. III, IV, V, VI, VII, I and II. d. IV, V, III, VII, II, VI, and
I.

20. The following statements refer to competence of CPA’s 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 so as 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.
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.

21. Which of the following statements is True?

a. Adequate training and experience in both the analytical approach and
process in the particular undertaking are requisites for the CPA to be
involved in a management service engagement.
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 excellent 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.

22. These statements relate to MAS practice standards

1. A practitioner is to notify the client of any reservation he has
regarding anticipated benefits.
2. 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.
3. During the engagement, should there be a significant change between
cost and anticipated benefits, the client should be informed.
4. Before the engagement, the practitioner must make arrangements with,
and inform the client on significant matters related to engagement, in
writing.
Of these statements, which pertain to the practice standard on client
benefit?
a. Statements 1 and 3 only. c. Statement 1 only.
b. All statements. d. Statement 1, 3 and 4 only.

23. 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

24. As a consultant, the CPA practitioner should

a. Exercise administrative control over the client’s staff to avoid
unnecessary delays in implementation.
b. Encourage dependence of client on the consultant’s staff so as to
pinpoint clear responsibility in implementing systems.
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.

25. The Revised Accountancy Law incorporates the Code of Professional

Ethics for CPAs. The provision of management advisory services is among the
areas of 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 CPA’s
independence.
d. CPAs in the practice of management advisory services are not bound by
the Board of Accountancy but are bound by the said law in the practice of
audit.

26. Which of the following statements is False?

a. CPAs provide management services to go around the ethical constraints
as mandated by the Accountancy Act.
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.

27. 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 hearing.
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
client.

28. Mr. Rey Carlos, a CPA firm’s partner-in-charge of quality assurance and
review is arguing with Mr. Reuben Fortuna, the consulting partner regarding
the question of 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 decisions 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 us up to professional judgment 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.
29. Which of the following acts is not performed by an independent CPA
engaged to design the accounting system?
a. Formulation of the chart of accounts.
b. Design of business and accounting forms.
c. Supervision of implementation of system and procedures recommended
d. Preparation of an accounting manual.

30. 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 loses 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 or giving of advice.

Suggested answers :
1. A 11. C 21. A
2. D 12. B 22. A
3. D 13. C 23. D
4. B 14. D 24. C
5. C 15. B 25. A
6. C 16. D 26. A
7. C 17. D 27. B
8. C 18. D 28. C
9. B 19. D 29. C
10.D 20. D 30. D