ACCTG 503
BASIC CONSIDERATIONS IN MANAGEMENT ADVISORY SERVICES
I. OVERVIEW
MANAGEMENT ADVISORY SERVICES DEFINED:
It refers to the function of providing professional advisory (consulting) services, the primary purpose of which is to improve the
client’s use of its capabilities and resources to achieve the objectives of the organization.
II. MANAGERIAL ACCOUNTING VS. FINANCIAL ACCOUNTING
MANAGERIAL ACCOUNTING FINANCIAL ACCOUNTING
Reports are for internal users Reports are for external users
Has a strong emphasis on the future Summarizes past transactions
Data should be relevant Data should be objective and verifiable
Focuses on timeliness of information Focuses on precision
Focuses on segments of a company Concerned with reporting for a company as a
whole
Not bound by GAAP Must conform with GAAP
Not mandatory Mandatory
III. TREASURERSHIP VS CONTROLLERSHIP
TREASURERSHIP CONTROLLERSHIP
Provision of capital Planning and control
Investor relation Reporting and interpreting
Short-term financing Evaluating and consulting
Banking and custody Tax administration
Credits and collection Government accounting
Investments Protection of assets
Insurance Economic appraisal
IV. ETHICAL STANDARDS IN MANAGEMENT ADVISORY SERVICES
The Code of Ethics in effect in the Philippines automatically covers all managerial accountants in the Philippines. In
addition to that is the code of ethics developed by IMA. Members of IMA shall behave ethically. A commitment to ethical
professional practice includes overarching principles that express our values and standards that guide our conduct.
PRINCIPLES
IMA’s overarching ethical principles include: honesty, fairness, objectivity, and responsibility. Members shall act in
accordance with these principles and shall encourage others within their organizations to adhere to them.
STANDARDS
A member’s failure to comply with the following standards may result in disciplinary action
1. COMPETENCE
Each member has a responsibility to:
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.
Recognize and communicate professional limitations or other constraints that would preclude
responsible judgment or successful performance of an activity.
2. CONFIDENTIALITY
Each member has a responsibility to:
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 ensure compliance.
Refrain from using confidential information for unethical or illegal advantage
3. INTEGRITY
Each member has a responsibility to:
Mitigate actual conflicts 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.
Abstain from engaging in or supporting any activity that might discredit the profession.
4. CREDIBILITY
Each member has a responsibility to:
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 or recommendations.
Disclose delays or deficiencies in information, timeliness, processing, or internal con trolls in
conformance with organization policy and/or applicable law.
pg. 1 MDDANO,CPA
ACCTG 503
RESOLUTION OF ETHICAL CONFLICT
In applying the Standards of Ethical Professional Practice, you may encounter problems identifying unethical behavior or
resolving an ethical conduct. When faced with ethical issues, you should follow your organization’s establishment policies
on the resolution of such conflict. If these policies do not resolve the ethical conflict, you should consider the following
action:
1. Discuss the issue with your immediate supervisor except when it appears that the supervisor is involved. In that
case, present the issue to the next level. If you cannot achieve a satisfactory resolution, submit the issue to the
next management level. If your immediate superior is the chief executive officer or equivalent, the acceptable
reviewing authority may be a group such as the audit committee, executive committee, board of directors, board
of trustees, or owners. Contact with levels above the immediate superior should be initiated only with your
superior’s knowledge assuming he or she is not involved. Communication of such problems to authorities or
individuals not employed or engaged by the organization is not considered appropriate, unless you believe there
is a clear violation of the law.
2. Clarify relevant ethical issues by initiating a confidential discussion with an IMA Ethics Counselor or other
impartial advisor to obtain a better understanding of possible courses of action.
3. Consult your own attorney as to legal obligations and rights concerning the ethical conduct.
pg. 2 MDDANO,CPA
