DITI T O O L S A N D * J. THOMAS R. WEIRICH Central Michigan University THOMAS C. PEARSON University of Hawaii NATALIE T. CHURYK Northern Illinois University WILEY John Wiley & Sons, Inc.
PREFACE ABOUT THE AUTHORS x xiii CHAPTER 1 INTRODUCTION TO PROFESSIONAL RESEARCH 1 Learning Objectives 1 What is Research 2 Research Questions 3 Nature of Professional Research 5 Critical Thinking and Effective Communication 6 Economic Consequences of Standards Setting 6 Role of Research in the Accounting Firm 7 Research and the CPA Exam 9 Overview of the Research Process 10 Step One: Identify the Relevant Facts and Issues 10 Step Two: Collect the Evidence 12 Step Three: Analyze the Results and Identify the Alternatives 13 Step Four: Develop a Conclusion 13 Step Five: Communicate the Results 13 Summary 14 Discussion Questions 14 Appendix 15 CHAPTER 2 CRITICAL THINKING AND EFFECTIVE WRITING SKILLS FOR THE PROFESSIONAL ACCOUNTANT 19 Learning Objectives 19 Critical Thinking Skills 19 Levels of Thinking 21 Universal Elements of Reasoning 23 An Example of Using Critical Thinking Skills 23 Effective Writing Skills 26 Writing as a Process 27
Contents Punctuation Primer 28 Improved Writing Skills Required 31 Active Voice 31 Short Sentences 31 Definite, Concrete, Everyday Language 32 Tabular Presentation 32 Limited Jargon and Technical Terms 32 No Multiple Negatives 33 Elements of Plain English 33 Writing Effective E-Mails and Letters 34 Writing Memos to the File 35 Summary 36 Discussion Questions 36 37 C H A P T E R 3 THE ENVIRONMENT OF ACCOUNTING RESEARCH 39 Learning Objectives 39 The Accounting Environment. 39 The SEC and the Standard-Setting Environment 40 Rules-Based versus Principles-Based Accounting Standards 41 " Financial Accounting Standards Board 42 /<* FASB Strives to Simplify Standards 42 Content of Authorities 43 FASB Due Process 45 FASB Conceptual Framework Project 46 Statements of Financial Accounting Concepts Nos. 1-7 46 American Institute of Certified Public Accountants (AICPA) 47 Governmental Accounting Standards Board (GASB) 48 Other Organizations Influencing Standard Setting 50 Generally Accepted Accounting Principles (GAAP) 50 The Levels of GAAP and FASB Accounting Standards Codification 53 Using Authoritative Support 57 Reading an Authoritative Pronouncement 58 Accounting Choices Have Economic Consequences 59 Summary 60 Discussion Questions 60 60
VI Accounting and Auditing Research Wei rich/pea rson/c h u ry k CHAPTER 4 CHAPTER 5 FINANCIAL ACCOUNTING RESEARCH TOOLS 63 Learning Objectives 63 Accounting Research Online 63 Database Research Strategies 64 Step One: Define the Information Needed 64 Step Two: Determine the Sources to Search 64 Step Three: Use Appropriate Search Methods 65 Step Four: View the Results and Manage the Information 65 Step Five: Communicate the Search Results 65 FASB Accounting Standards Codification Research System 65 The Research Process 68 Locating GAAP Using the Codification 70 Examples Using the Codification 71 SEC Accounting for Public Companies 72 SEC Regulations and Sources 73 SEC's Published Views and Interpretations 73 SEC Staff Policy 74 Accessing SEC Filings and Regulations 75 Cases to Practice Accounting Research 76 Summary 77 Discussion Questions 77 78 Appendix 80 THE ENVIRONMENT OF INTERNATIONAL RESEARCH 85 Learning Objectives 85 International Accounting Environment 85 International Accounting Standards Board (IASB) 87 IASB Authorities 89 IASB Due Process 90 IFRIC Due Process 92 IASB Conceptual Framework 92 Principles-Based Accounting Standards 93 IFRS Funding, Regulation and Enforcement 93 International Financial Reporting Standards (IFRS) Research 95 IFRS Hierarchy 95
Contents CHAPTER 6 Electronic International Financial Reporting Standards (elfrs) Summary Discussion Questions OTHER RESEARCH DATABASES AND TOOLS Learning Objectives Other Database Research Strategies U.S. U.S. Step One: Define the Information Needed Step Two: Determine the Sources to Search Step Three: Use Search Techniques and Tools Step Four: View the Results and Manage the Information Accounting Research Tools Commercial Accounting Databases AICPA's Reference Books Government Accounting Databases GASB's Government Accounting Research System (GARS) FASAB Codification of Authorities Financial Research Databases Standard, & Poor's (S&P) NetAdvantage Mergent Online Thomson Research Other Financial Databases and Sources Financial Research Challenges Business Research Databases and Tools Article Index Databases International Business Sources Statistical Sources Specialized Research Massive Legal Research Databases Lexis Nexis LexisNexis Academic Westlaw Other Legal Databases Summary Discussion Questions Appendix 95 100 100 100 104 105 105 105 106 108 110 111 112 115 115 117 117 118 119 120 120 120 121 121 122 122 123 126 126 127 127 127 129
VIII Accounting and Auditing Research Weirich/Pearson/Churyk CHAPTER 7 TAX RESEARCH FOR COMPLIANCE AND TAX PLANNING 131 Learning Objectives 131 Tax Research Goals 131 Tax Research Challenges 132 Tax Research Databases 133 RIA Checkpoint 133 Primary Tax Authorities 135 The Code 135 Administrative Authorities (Particularly Treasury Regulations) 137 Steps in Conducting Tax Research 142 Step One: Investigate the Facts and Identify the Issues 142 Step Two: Collect the Appropriate Authorities 142 Step Three: Analyze the Research 145 Step Four: Develop the Reasoning and Conclusion 146 Step Five: Communicate the Results 148 Professional Standards for Tax Services 150 Summary 150 Discussion Questions 151 151 Appendix 154 CHAPTER 8 ASSURANCE SERVICES AND AUDITING RESEARCH 155 Learning Objectives 155 Assurance Services 155 Consulting Services and Standards 156 Auditing Standard-Setting Environment 157 Attestation Services and Standards 157 Auditing Standards 160 Auditing Standard-Setting Process 162 Public Company Accounting Oversight Board (PCAOB) 162 AICPA resource Database 163 AICPA Code of Professional Conduct 164 Auditing Standards in the Public Sector 169 International Auditing Standards 170 Compilation and Review Services 171 Role of Judgment in Auditing and Accounting 171 Economic Consequences 172 Summary 173 Discussion Questions 173
Contents IX CHAPTER 9 Appendix REFINING THE RESEARCH PROCESS Learning Objectives Method of Conducting Research Step One: Identify the Issues or Problems Step Two: Collect the Evidence Step Three: Analyze the Results and Identify Alternatives Step Four: Develop a Conclusion Step Five: Communicate the Results Lessons Learned for Professional Practice Remain Current in Knowledge and Skills International Complexities in Practice Skills for the CPA Exam Summary Discussion Questions Appendix A Appendix B 174 174 177 177 177 179 180 183 184 185 185 187 188 188 189 189 190 191 193 CHAPTER 1O INDEX FRAUD INVESTIGATIVE TECHNIQUES Learning Objectives Definition, of Fraud Types of Fraud The Fraud Trianale 197 197 198 199 201 Overview of a Financial Statement Fraud Examination 202 Step One: Identify the Issue/Plan the Investigation 204 Step Two: Gather the Evidence/Complete the Investigation Phase 204 Step Three: Evaluate the Evidence 205 Step Four: Report Findings to Management/ Legal Counsel 205 Business Investigations 206 Computer Technology in Fraud Investigations 207 Data Mining Software 207 Public Databases 210 The Internet 213 Fraud Investigation Regulations 214 Summary 214 Discussion Questions 214 215 217