AICPA’s Management Advisory Services Division promulgated and recommended the eight standards which will serve as guidelines to all MAS practitioners. Standards 1, 2 and 3 are general standards that set the personal qualifications for the practitioner and his orientation in the professional practice while Standards 5, 6, 7 and 8 establish the practitioner’s relationship with his client and his attitude towards work.
Any personal interest and other events or special relationship must be eliminated in order to achieve integrity and don’t intentionally misinterpret facts to your advantag e. The consultant must be away from the influence of the enterprise served because there must be integrity in the rendered service. The only time that the information must be disclosed is by the consent of the client. Keeping the information makes a good relationship with client. Disclosing information for you own interest results in service without integrity.
In performing Management Advisory Services, a practitioner must act with integrity and objectivity and be independent in mental attitude. He/she must avoid assuming the role of management, limiting his services to those of an objective researcher, analyst, or advisor rather than a decision maker. Integrity ensures that statements of findings and recommendations are free of intentional distortions or misstatements. Objectivity is the ability to avoid bias and to maintain an impartial attitude on all matters under review. Independent mental attitude is based on the practitioner’s obligation to the client and on the need to avoid impairment of public confidence in the profession. . Engagements are to be performed by a practitioner having competence in the analytical approach and process, and in technical subject matter under consideration. Competence is acquired and maintained through a combination of education and experience. Undertake only those professional services that the member or the member's firm can reasonably expect to be completed with professional competence. Competence involves the technical qualifications and ability to supervise the personnel assigned, to evaluate the quality of work performed, and to accept responsibility to the client for successful completion of the engagement. It is the ability to identify and define def ine client needs, to utilize the analytical approach and process, to apply knowledge of the technical subject matter under consideration, to communicate recommendations effectively, and to assist in implementing the recommendations. It is acquired and maintained through a combination of education and experience. Competence may be augmented by research and by consultation with others. Due professional care must be exercised in the performance of a management advisory services engagement. It involved diligence and appropriate attention in carrying out the assignment. It involves diligence and appropriate attention in carrying out the assignment. It does require systematic critical review by the practitioner, throughout the engagement of work accomplished and judgement exercised. Due professional care requires that all work be done within the provisions of the Code of Professional Ethics and other Professional Standards for CPAs.
Before accepting an engagement, a practitioner is to notify the client any reservations he has regarding anticipated benefits. An assessment of the anticipated benefits often requ ire a sufficient exploratory work to establish their reasonableness and also requires the exercise of judgement. Unwillingness (of the client) to accept or inability to implement appropriate recommendations could impair realization of benefits.”
Before undertaking an engagement, a practitioner is to inform his client of all significant matters related to the engagement. These include: objectives, scope, approach, role of all personnel, manner in which results resul ts are to be communicated, timetable and fee.
- Serve the client interest by seeking to accomplish the objectives established by the understanding with the client while maintaining integrity and objectivity. - Establish with the client a written or oral understanding about the responsibilities of the parties and the nature, scope, and limitations of services to be performed, and modify the understanding if circumstances require a significant change dur ing the engagement. - Inform the client of (a) conflicts of interest that may occur pursuant to interpretations of Rule 102 of the Code of Professional Conduct, 2 3(b) significant reservations concerning the scope or benefits of the engagement, and (c) significant engagement findings or events. Professional judgment must be used in applying Statements on Standards for Consulting Services in a specific instance since the oral or written understanding with the client may establish constraints within which services are to be provided. For example, the understanding with the client may limit the practitioner's effort with regard to gathering relevant data. The practitioner is not required to decline or withdraw from a consulting engagement when the agreed-upon scope of services includes such limitations. . Engagements are to be adequately planned, supervise and controlled. – translation of engagement objectives into a structured set of activities and events within a targeted time schedule. – practitioner must exercise judgement as to appropriate amount of supervision. – requires measurement of progress in meeting the engagement plan and objectives.
. Sufficient relevant data is to be obtained, documented and evaluated in developing conclusions and recommendations. It should record the following: The evidential matter obtained and its source The alternatives considered Analytical process leading to the specific recommendations
All significant matters relating to the results of the engagement are to be communicated to the client. The principal findings, recommendations, and accomplishments, and the major assumptions relied upon, should be conveyed to the client, together with any limitations, reservations, or other qualifications. Reports to the clients may be written or oral. When a practitioner does not issue a written report to the client, he should prepare a file memorandum documenting the significant recommendations and other pertinent information discussed with the client.
All professional accountants should be straightforward and honest in professional and business relationships. Integrity also implies fair dealing and truthfulness. A professional accountant should not be associated with reports, returns, communications or other information where they believe that the information contains a materially false or misleading statement contains statements or information furnished recklessly or omits or obscures information required to be included where such omission or obscurity would be misleading. Mitigate actual conflict of interest, regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts. Refrain from engaging in any conduct that would prejudice carrying out duties ethically. Refuse any gift, favor, or hospitality that would influence or appear to influence their actions. Refrain from either actively or passively subverting the attainment of the organization’s legitimate and ethical objectives. Communicate unfavorable as well as favorable information and professional judgements and opinions. Abstain from engaging in or supporting any a ctivity that might discredit the profession.
A professional accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgements. He should not compromise their professional or business judgement because of bias, conflict of interest or the undue inf luence of others. Communicate information fairly and objectively Disclose all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, analyses, comments, or recommendations presented. Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.
A professional accountant has a continuing duty to maintain professional knowledge and skill and act diligently and in accordance with applicable technical and professional standards. He should attain and maintain his professional competence. Maintain an appropriate level of professional expertise by continually developing knowledge and skills. Perform professional duties in accordance with relevant laws, regulations, and technical standards. Provide decision support information and recommendations that are accurate, clear, concise and timely. Prepare complete and clear reports and recommendations after appropriate analyses of relevant and reliable information. Recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.
A professional accountant should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose. Keep information confidential except when disclosure is authorized or legally required. Inform all relevant parties regarding appropriate use of confidential information. Monitor subordinates’ activities to ens ure compliance. Refrain from using or appearing to use confidential information for unethical or illegal advantage either personally or through third parties.
A professional accountant should comply with relevant flaws and regulations and should avoid any action that discredits the profession. He should not bring the profession into disrepute in marketing and promoting his self and his work.
Fees charged from the client must be reasonable with the basis of the service performed, the time required to complete, benefits of the clients and experience of the consultant. Any fees charged without reasonableness will result into a conflict of interest.
