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A Case Analysis on Management Consultancy

Case 1 and 9

Submitted by:Group 1

Abando, Katherine Jane

Abellada, Benidict Justine

Adduru, Allan

Aoshima, Maryonette

Albino, ri!a "ee

November 17, 2014



CAS 1

Summary o# the Case

The junior consultant discovered illegal activities on a company’s management

practices. The client is a large publicly held corporation. hortly a!ter the discovery, the

junior consultant ma"es the !!. comment#

$%e’re here as a con!idential counselors and have been made privy to innermost

secrets by a client &ho has been completely open. %hat right do &e have to tell him

&hat’s right or &rong' (o &e have to be a policemen as &ell as !ather con!essors')

Assumptions

*eing a junior consultant and doing his !irst job,he &as unsure o! &hat is right to

do, so upon discovering the !raud, the !ormer didn’t &ant to disclose the

discovery due to being a large public corporation &hich is e+posed and o&nedby the general public, and such e+posure may harm the reputation o! the

corporation. The consultant, upon the discovery o! the illegalities, &as promised by one

person involved that he &ill obtain a higher pay, so he &as playing innocent,

convincing us that &e didn’t have the right to disclose the !acts, instead just call

an authority to put an end to the issue. The junior consultant is having thoughts on disclosing the matter due to having a

immediate !amily member, in &hich it that issues &here e+posed, it may a!!ect his

!amily member.

$ilemma #aced by the consultant%s&

The consultant is con!used on &hether he has a right to tell his client that &hat

they are doing is &rong because he thin"s that he has no po&er to say such

things.

e thin"s that he should use the po&er o! policemen instantly to resolve the

problem

State the thical Considerations and 'ractice Standards Applicable to the Case

tandard No. - All significant relevant data is to be obtained, documented

and evaluated in developing conclusions and recommendations .

Confidentiality



Alternati(e Courses o# Action

et a meeting &ith the board o! directors, probably chairman o! the board and

disclose that there are illegal payments and !raud happening and ma"e

recommendations. #o ros#

The management &ill become a&are to the problem.

The management can apply the necessary recommendations made

to eliminate irregularitieso /ons#

(isclosure &ithout the action may &orsen the condition, due to

evidences being e+posed. ! still cannot be resolved, must obtain pro!essional advice !rom relevant

pro!essional bodies.o ros#

/an see" other adviceguidance that may help to resolved the

issue.o /ons#

(isclosure &ithout the client’s consent, can breach the consultant’s

responsibility on con!identiality. ! applying all the possibilities to eliminate the illegal payments and !raud are

still not enough, the last recourse is to &ithdra& !rom the engagement.o ros#

ule on con!identiality &ill not be breached

o /ons#

There is no communication o! results to the client thus, standard

no. - is not applied. nstead o! disclosing the !acts directly to the *oard, the consultant &ill tell the

matter to the 3overnment body &ithout consulting the cliento ros#

The consultant may !ind uic" solution to the problem.

The consultant may !ind help in solving the problem.

o /ons#

The rule on con!identiality &ill be violated.

The 5unior consultant &ill tell the matter to the *oard o! (irectors but they &ill

re!use to ta"e necessary actions and he &ill tell the government bodies a!ter.o ros#

To give uic" solution on the matter, higher authority is need !or

them to be a!raid on not giving solution to problem. The management &as already in!ormed to &rong!ulness.



o /ons#

The rule on con!identiality &as violated.

The company missed the chance to resolve the problem internally.

nvolvement o! the proper authority may put the company in a ris"y

situation 6investigation. The 5unior consultant &ill tell the matter to the *oard o! (irectors but they &ill

re!use to ta"e necessary actions and he &ill &ithdra& the engagement a!ter the

re!usal.o ros#

The members involved &ill be more care!ul or maybe &ill lessen the

&rong doings. The consultant is already !ree and may avoid committing unethical

actions.

o /ons#

Not ta"ing necessary action implies that the company operates

illegally.

Not doing the right action may &orsen the situation.

Best Course o# Action )ith Justi#ication

(isclosure is very important on a engagement, the client hired you so that he can

get relevant in!ormation regarding a speci!ic engagement. Thus, the consultant must tell

the *oard o! directors the illegal acts done by the management, i! they re!use to ta"e

necessary corrective action then you should &ithdra& the engagement.



CAS 9

Summary o# the Case

8 person serve as a both director and consultant at the same time !or a medium9

si:ed, publicly held company. n revie&ing your plans !or the !ollo&ing months, he go

through the !!. thought process#

$8s a director ’m supposed to represent the shareholders, but &ouldn’t be here unless

our !irm had been doing a lot o! good consulting &or" !or management. "no&, too that

&e’ve got a couple o! darn good consultants coming o!! a long assignments ne+t month,

and so !ar there’s ne& assignment !or them. The president has been thin"ing about

applying some sophisticated planning techniues to replace the current, old !ashion

!orecast. No& might be the time to do it. ;ran"ly, don’t thin" a company this si:e has to

get so !ancy, but i! he &ants it, and considering "eeping those t&o good sta!!ers at !ull

billing< thin" ’d better have /harles bring it up at the ne+t director’s meeting. ’ll

re!rain !rom voting, so there should be no uestion)

Assumptions

/harles, the president o! the company brings up the application o! sophisticated

techniues to replace current, old !ashion !orecasts.

The director9consultant re!rains !rom voting. n reality, he does not &ant suchidea o! the president to pursue. e &ill just give the &or" on commenting to ideas

that the president presents, to the consultants that there’s no assignment. n addition, the director decides to remain silent as he "ne& that the president

has an attitude that &hat he thin"s is al&ays the best. =pposing his ideas may

just lead into a disagreement. 8nd at the end, there &ill be no points o! arguing

since that president al&ays &in.

$ilemma #aced by the consultant%s&

The consultant is concerned to ma"e sure that the company is utili:ing all o! itsresources, li"e labor and based on his statement, it is not utili:ed.

The consultant believes that the sophisticated planning techniues should not

push through but he did not gave his opinion to the board regarding such

although he has relevant in!ormation !or the decision



State the thical Considerations and 'ractice Standards Applicable to the Case

=bjectivity 9 a pro!essional accountant should not allo& bias, con!lict o! interest or

undue in!luence o! others to override pro!essional or business judgments. tandard No. 7 Sufficient relevant data is to be obtained, documented, and

evaluated in developing conclusions and recommendations

Alternati(e Courses o# Action

The consultant should resign as a director and just be a consultant so that he

can manage properly the utili:ation o! the company’s resources.o ros#

%ill be able to utili:e the company>s resources, esp. labor.

The directionconsultant &ill have the proper mindset on &hat to

prioriti:e !irst.o /ons#

%ill not be able to voice out his opinion regarding to the changes in

planning process.

The consultant should also advise the board regarding the installation o! thesophisticated techniues since he is the one &ho "no& relevant in!ormation !or

that decision.o ros#

is advice &ill help the *=( decide i! the said project &ill give them

more advantages than disadvantages.o /ons#

*eing against the president>s idea might ma"e the president mad

thin"ing that his idea is being disregarded.



Best Course o# Action )ith Justi#ication

The consultant should resign as a director and just be a consultant so that he can

manage properly the utili:ation o! the company’s resources.

The consultant should also advise the board regarding the installation o! the

sophisticated techniues since he is the one &ho "no& relevant in!ormation !or that

decision.

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