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ChapterChapter 1 1
Introduction to Introduction to Professional Professional
ResearchResearch
Learning ObjectivesLearning Objectives
Importance of research to Importance of research to professional accountantsprofessional accountants
Definition and nature of Definition and nature of professional accounting researchprofessional accounting research
US Securities & Exchange US Securities & Exchange CommissionCommission’’s view of researchs view of research
Learning Objectives Learning Objectives (cont.)(cont.)
Role of research within a public Role of research within a public accounting firmaccounting firm
Basic steps of the research processBasic steps of the research process Importance of critical thinking and Importance of critical thinking and
effective communicationeffective communication Importance of Research on CPA Importance of Research on CPA
ExamExam
Research importanceResearch importance
Changes in law, new services, Changes in law, new services, technologies, professional technologies, professional standards.standards.
Accounting, attestation, tax Accounting, attestation, tax compliance, forensic accounting, compliance, forensic accounting, fraud examinations, tax planning.fraud examinations, tax planning.
Research Importance Research Importance (contd.)(contd.)
Must have a clear definition of the Must have a clear definition of the problem, using professional problem, using professional databases to search for relevant databases to search for relevant authorities, reviewing authoritative authorities, reviewing authoritative literature, evaluating alternatives, literature, evaluating alternatives, drawing conclusions, and drawing conclusions, and communicating results.communicating results.
Develop critical thinking skillsDevelop critical thinking skills
What is Research?What is Research?
The act of conducting research is a The act of conducting research is a systematic investigation of an issue or systematic investigation of an issue or problem utilizing the researcher’s problem utilizing the researcher’s professional judgment.professional judgment.
Accounting & Auditing ResearchAccounting & Auditing Research The act of a systematic and logical The act of a systematic and logical
approach and documenting evidence approach and documenting evidence underlying a conclusion relating to an underlying a conclusion relating to an accounting or auditing accounting or auditing issue or problem issue or problem currently confronting the accountant or currently confronting the accountant or auditorauditor..
Accounting & Auditing Accounting & Auditing ResearchResearch
Theoretical researchTheoretical research Attempt to create new knowledge or add Attempt to create new knowledge or add
to a body of knowledgeto a body of knowledge Applied researchApplied research
Investigates an issue of immediate Investigates an issue of immediate practical importancepractical importance
A priori A priori –– before the fact before the fact –– should a should a client open a store at a certain locationclient open a store at a certain location
A posteriori A posteriori –– after the fact after the fact –– tax return tax return
Nature of ResearchNature of Research
Most important step is problem Most important step is problem identification!identification!
Must be able to conduct effective and Must be able to conduct effective and efficient researchefficient research Effective Effective –– proper recording, proper recording,
classification, and disclosure, in classification, and disclosure, in compliance with authoritative compliance with authoritative pronouncementspronouncements
Efficient Efficient –– meet deadlines and meet deadlines and managerial costsmanagerial costs
Critical Thinking and Critical Thinking and Effective CommunicationEffective Communication
Critical ThinkingCritical ThinkingMust know how to thinkMust know how to thinkBe able to identify a problem, Be able to identify a problem,
gather relevant facts, analyze the gather relevant facts, analyze the issue, synthesize and evaluate issue, synthesize and evaluate alternatives, and develop alternatives, and develop appropriate alternatives.appropriate alternatives.
Critical Thinking and Critical Thinking and Effective Communication Effective Communication
(contd.)(contd.)
Effective CommunicationEffective CommunicationCoherence, conciseness, good use Coherence, conciseness, good use
of standard English, and of standard English, and achievement of the purpose for achievement of the purpose for the intended reader (memo if the intended reader (memo if internal, report if external)internal, report if external)
Research on the CPA Research on the CPA ExamExam
Each part except for BEC currently Each part except for BEC currently has a research component consisting has a research component consisting of a simulation.of a simulation.
Must be able to research a database Must be able to research a database and to identify the exact and to identify the exact citation/answer to a posed problem.citation/answer to a posed problem.
The Research ProcessThe Research Process
1. Investigate and analyze a clearly 1. Investigate and analyze a clearly definable issue or problemdefinable issue or problem
2. Use an appropriate scientific 2. Use an appropriate scientific approachapproach
3. Gather and document adequate and 3. Gather and document adequate and representative evidencerepresentative evidence
4. Employ logical reasoning in 4. Employ logical reasoning in drawing conclusionsdrawing conclusions
5. Support the validity or 5. Support the validity or reasonableness of the conclusionsreasonableness of the conclusions
1. Identify Relevant 1. Identify Relevant FactsFacts
Must define the problem!!!!!!Must define the problem!!!!!! Why and whatWhy and what At first, it is better to gather too At first, it is better to gather too
many facts than too little as you are many facts than too little as you are learning the research process.learning the research process.
Exact source of the issue, Exact source of the issue, justification for the issue, and scopejustification for the issue, and scope
2. Collect the evidence2. Collect the evidence
Review relevant authoritative Review relevant authoritative accounting or auditing literature accounting or auditing literature and survey present practice.and survey present practice.
Be familiar with available resourcesBe familiar with available resources You may have to develop your own You may have to develop your own
resolution based on a series of facts, resolution based on a series of facts, if a clear cut answer does not existif a clear cut answer does not exist
Must evaluate cost/benefitsMust evaluate cost/benefits
3. Analyze the Results 3. Analyze the Results and Identify the and Identify the
AlternativesAlternatives
Support each alternative with Support each alternative with authoritative literature or authoritative literature or theoretical justification with concise theoretical justification with concise documentation.documentation.
Properly document alternatives from Properly document alternatives from organized, collected information.organized, collected information.
4. Develop Conclusion4. Develop Conclusion
After analyzing alternatives, After analyzing alternatives, including economic consequences, including economic consequences, develop conclusion.develop conclusion.Often, only the final conclusion Often, only the final conclusion
will be presented to the client will be presented to the client (alternatives may be in the (alternatives may be in the appendix)appendix)
5. Communicate the 5. Communicate the ResultsResults
Often in the form of a research memoOften in the form of a research memo Statement of facts; clear, precise Statement of facts; clear, precise
statement of the issue; brief statement of the issue; brief straightforward conclusion; straightforward conclusion; discussion of authoritative discussion of authoritative literature; explanation of how it literature; explanation of how it applies to set of factsapplies to set of facts
Avoid excessAvoid excess
Research Navigation Research Navigation GuideGuide
Functional AreasFinancial Accounting & ReportingSEC IssuesTaxationManagerial AccountingAudit/ AttestationGovernmental/ Not-for-profit AccountingOther Areas
Topic (Issue)
AssetsLiabilitiesEquityRevenuesExpense
Sub-Topics
Cost of SalesCompensationR & DEtc.
Section
RecognitionMeasurementDisclosure