Summary of Management Consultancy

CHAPTER 1 OVERVIEW OF MANAGEMENT CONSULTANCY SERVICES BY CPAs Introduction to the domain of a function of Consulting * Consultants are not all CPAs. Any adept can be a consultant. However, to change state in consultancy, one has to fork out the expertness. The most compelling nonmonetary reasons people code the consulting field are 1. Sharing their knowledge to help their leaf nodes. 2. Building melodic line net sketch and take a step up in ones corporate career. 3. Having no boss, being independent and making their knowledge decisions. 4. No fear of being laid off. 5. Having a flexible acknowledgment of income. 6.A heart and soul of giving back to the community by providing expertness and helper in community-based projects. Evolution of MAS The primary factors that contributed to the emergence and growth of focusing consultancy are 1. Growth in size and complexity of business concern. 2. Difficulty in conducting and managing a business. 3. Greater competition among busin esses so that new focusing techniques leave have to be applied. 4. Recognition of the importance of accurate and timely selective information in decision-making. 5. Inability to have a complete line-up of professional wariness. maturation Trends instruction consultancy now specializes in information systems, automated offices, financial outline and modeling budgeting and cost adjudges, organization structures, personnel compensation, strategic picturening and a host of other areas. * Another trend has been the improvement of business education. * The choice undergraduate and graduate programs in business are producing better-trained entrants into the ranks of management consulting profession. As a result of this infusion, management consulting is becoming a catalyst for overture of better management concepts and techniques. Technological developments have occurred at a dyspnoeic pace in such areas as information sciences and decision sciences. * calculating machine hard ware and software, together with data communication and robotics represent powerful tools for business management. Future Prospects A veteran management consultant fools the following predictions 1. Management consulting willing become even more specialized. 2. The consultants druthers will be towards being an insight- sufferr, creator and sharer of information. 3.Management consulting starchys will tend either to remain small or to become rather large. Small firma will prosper by focusing upon narrow areas of long suit while large firms will have to develop and offer a wide range of services to sustain their high costs of operations. 4. As consultants grow in number, they will develop more sophisticated means of marketing their services. 5. Bright graduates of accounting, management and business schools will continue to be attracted to careers in management consulting. The Consulting Industry Most definitions of consultancy would include . Information technology 2. Consulti ng and system integration 3. Corporate strategy 4. Operations management 5. homophile resources management 6. Outsourcing The Main Types of Consultant Firms 1. IT Firms (for example, IBMs purchase of PwC Consulting) to increase revenue enhancement 2. Accounting firms offering consultancy 3. Major Consulting Only Firms 4. frees headmaster bodies such as PICPA offer professional training and accreditation and provide a forum for of import networking. Career in Consulting Firms (in ascending order of seniority) 1.Analyst responsible for conclave information and bear oning it for the consulting team. 2. Consultants undertake the evaluation of the lymph node business and make recommendations on its behalf. 3. Senior Consultant or Managers more go through consultants that have the responsibility of leading a consulting team. would typically have 3-5 days of consulting experience. would be more bear on in dealing with members of the client team. 4. patronage ontogeny Man agers are responsible for developing the firms products and building its kind with clients. would be involved in some large, complex consulting projects at a strategic level. most would have 5-10 years of consulting experience. 5. Directors (or Partners) are the most experienced consultants, who take on responsibility for the development of the organization as a whole and who lead its strategic development. would maintain contacts with senior personnel in the client companies and would have overall responsibility for projects. would have 10+ years of consulting experience. Nature of MAS by Independent Accounting FirmsManagement Advisory work (MAS) by independent accounting firms can be described as the function of providing professional advisory (consulting) services, the primary purpose of which is to improve the clients use of its capabilities and resources to achieve the objectives of the organization. Management Consultancy can also be described as an independent and obje ctive advisory service provided by qualified persons to clients in order to help them identify and analyze management problems and opportunities. 2 types of encounters with clients . Consultation- providing advice and information during a short time frame. The advice will be definitive when the consultant is fully aware of the situation and possesses sufficient expertise to require more intensive study or investigation. 2. Engagement- consists of that form of management advisory or consulting service in which an analytical burn up and process is applied in a study or project. This approach typically involves a. Ascertaining the pertinent facts and circumstances b. Seeking and identifying objectives c.Defining the problem or chance for improvement d. Evaluating and determining the possible solutions e. Present findings and recommendations f. Implementing the solution, if appropriate And following the clients decisions to proceed, the independent accounting firm may also be involved in a. Planning and scheduling actions to achieve the desired results, and b. Advising and providing practiced assistance in implementing In combination with knowledge and experience in such areas as a. Organization and management methods b.Office and management functions c. Systems and procedures d. info processing methods e. Quantitative methods f. Financial management To produce solutions such as * A management information system * A sales inform system * A cost accounting system * A work measurement program * Improved production control * An organization plan with statements of duties and responsibilities, or * An electronic data processing system Rationale of employ Management Consultants A management consultant is hired for at least four valuable reasons 1. Independent ViewpointThis enables him to see the true temper of the problems and distinguish between feasible and infeasible solutions. Since, he is not involved in the internal policies of his clients, his suggestions are considered unbiased. 2. Professional Advisor and Counselor Business firms generally prefer CPA consultants because of their academic training and examination want for the CPA certificate. 3. Temporary Professional Service The use of consultants will be probably less expensive to the company than hiring new managers or employees to provide professional advisory services. . Agent of Change In providing solutions to the clients problem, changes may have to be made to the organizational structures, to procedures and to job responsibilities. Independent Accounting Firms Role in MAS To provide advice and good assistance which should provide for client participation in the analytical approach and process. Specifying this as the proper role recognizes both the appropriate place of MAS and the realities of practice. This is the totally basis on which the work should permit it to be done. * The accounting firm should avoid making management decisions or taking positions that might co ddle the firms objectivity. CPAs Objective in piquant in MAS To utilize the essential qualifications it has available to provide advice and technical assistance which will enable client management to conduct its affairs more effectively. Essential Qualifications 1. Technical competence 2. Familiarity with the clients finance and control systems and his business problems. 3. Analytical ability and experience in problem solving. 4. Professional independence, objectivity and integrity.