Accounting and Auditing Research Tools and Strategies

Accounting and Auditing Research, 10^th Edition prepares students and early-stage practitioners to use well-established research solutions in a broad range of practical applications, from financial accounting and tax planning, to investigating fraud and auditing various business problems. Emphasizing real-world skills development, this fully-updated textbook covers the current tools, techniques, and best practices in applied professional research and analysis.

The authors provide comprehensive yet accessible coverage of the entire research process, explaining how to utilize major research databases and audit software packages in a clear and systematic manner. The tenth edition features carefully revised content designed to enhance effectiveness, increase readability, and strengthen learning and retention. The book’s classroom-proven pedagogy features expert tips for performing common research tasks, sidebar boxes that summarize and expand upon key concepts, and a variety of end-of-chapter exercises that reinforce the material and develop readers’ skills.

PREFACE IX

ABOUT THE AUTHORS XIII

1 Introduction To Applied Professional Research 1

What Is Research?, 2

Research Questions, 3

Nature of Professional Research, 5

Critical Thinking and Effective Communication, 7

Economic Consequences of Standards Setting, 7

Role of Research in the Accounting Firm, 7

Skills Needed for the CPA Exam and Practice, 9

Overview of the Research Process, 11

Step One: Identify the Relevant Facts and Issues, 11

Step Two: Collect the Evidence, 12

Step Three: Analyze the Results and Identify the Alternatives, 13

Step Four: Develop a Conclusion, 14

Step Five: Communicate the Results, 14

Data Analytics/Emerging Technologies in Accounting and Auditing Research, 14

Summary, 16

Discussion Questions, 16

Exercises, 17

Appendix: Research Focus on the CPA Exam, 18

2 Criticalthinking AND EFFECTIVEWRITING SKILLS FOR THE PROFESSIONAL ACCOUNTANT 21

Critical Thinking Skills, 21

Levels of Thinking, 23

Universal Elements of Reasoning, 26

An Example of Using Critical Thinking Skills, 27

Effective Writing Skills, 28

Writing as a Process, 29

Punctuation Primer, 30

Improved Writing Skills Required, 33

Active Voice, 33

Short Sentences, 33

Definite, Concrete, Everyday Language, 34

Tabular Presentation, 34

Limited Jargon and Technical Terms, 34

No Multiple Negatives, 35

Elements of Plain English, 35

Writing Effective Texts, e-mails, and Letters, 36

Writing Memos to the File, 37

Summary, 38

Discussion Questions, 38

Exercises, 39

3 The Environment Of Accounting Research 42

The Accounting Environment, 42

The SEC and the Standard-Setting Environment, 43

Rules-Based vs. Principles-Based Accounting Standards, 45

Financial Accounting Standards Board, 45

FASB Strives to Simplify Standards, 47

Content of Authorities, 47

FASB Due Process, 48

FASB Conceptual Framework Project, 50

Statements of Financial Accounting Concepts Nos. 1–8, 51

American Institute of Certified Public Accountants (AICPA), 51

Governmental Accounting Standards Board, 52

Other Organizations Influencing Standard Setting, 54

U.S. Generally Accepted Accounting Principles (U.S. GAAP), 56

The FASB Accounting Standards CodificationTM, 57

Using Authoritative Support, 58

Reading an Authoritative Pronouncement, 59

Accounting Choices Have Economic Consequences, 61

Summary, 61

Discussion Questions, 62

Exercises, 62

4 Financial Accounting Research Tools 64

Accounting Research Online, 65

Database Research Strategies, 65

Step One: Define the Information Needed, 65

Step Two: Determine the Sources to Search, 65

Step Three: Use Appropriate Search Methods, 66

Step Four: View the Results and Manage the Information, 66

Step Five: Communicate the Search Results, 66

FASB Accounting Standards CodificationTM Research System, 66

The Research Process, 67

Locating U.S. GAAP Using the Codification, 71

Examples Using the Codification, 71

SEC Accounting for Public Companies, 72

SEC Regulations and Sources, 73

The SEC’s Published Views and Interpretations, 73

SEC Staff Policy/Interpretations, 74

Accessing SEC Filings and Regulations, 76

Cases to Practice Accounting Research, 77

Data Analytics for the Accounting Researcher, 78

Summary, 79

Discussion Questions, 79

Exercises, 80

Knowledge Busters: The Codification, 83

Appendix: CPA Exam—Financial Accounting Simulations, 89

Document Review Simulation, 92

5 The Environment Of International Research 94

International Accounting Environment, 94

International Accounting Standards Board (IASB), 96

IASB Authorities, 98

IASB Due Process, 99

Interpretations Committee Due Process, 100

IASB’s Conceptual Framework, 101

Principles-Based Accounting Standards, 101

IFRS Funding, Regulation, and Enforcement, 102

International Financial Reporting Standards (IFRS) Research, 104

IFRS Hierarchy, 104

Electronic International Financial Reporting Standards (eIFRS), 104

Summary, 106

Discussion Questions, 106

Exercises, 107

Knowledge Busters, 108

6 Other Research Databases And Tools 110

Other Database Research Strategies, 110

Step One: Define the Information Needed, 111

Step Two: Determine the Sources to Search, 112

Step Three: Use Search Techniques and Tools, 112

Step Four: View the Results and Manage the Information, 113

Leading Publishers of Global Financial Information, 114

Commercial Accounting Databases and Tools, 114

U.S. Accounting Research Tools, 116

U.S. Government Accounting Databases, 117

Financial Research Databases, 119

S&P Capital IQ, 120

Mergent Online, 121

Other Financial Databases and Sources, 122

Research Challenges for Business Research, 123

Business Research Databases and Tools, 123

Article Index Sources, 124

Other Specialized Research, 124

Massive Legal Research Databases, 125

LexisNexis Database Products, 126

Westlaw Database Products, 127

Recent Legal Database Competitors, 128

Summary, 128

Discussion Questions, 129

Exercises, 129

Knowledge Busters, 131

Appendix: 6A-1: Website Addresses, 131

7 Tax Research For Compliance And Tax Planning 134

Tax Planning Concepts and Tax Research Goals, 134

Tax Research Goals, 135

Tax Research Challenges, 136

Specialized Tax Research Databases, 137

Thomson Reuters Checkpoint, 138

Primary Tax Authorities, 138

The Code, 139

Treasury Regulations, 141

Revenue Rulings and Revenue Procedures, 143

Lesser Administrative Sources (Nonprecedential), 144

U.S. Tax Court, 145

Other Judicial Sources of Authority, 146

Steps in Conducting Tax Research, 147

Step One: Investigate the Facts and Identify the Issues, 147

Step Two: Collect the Appropriate Authorities, 147

Step Three: Analyze the Research, 150

Step Four: Develop the Reasoning and Conclusion, 152

Step Five: Communicate the Results, 153

Evolving Professional Concerns and Changes, 155

Professional Standards for Tax Services, 157

Data Analytics in Tax Research, 157

Summary, 158

Discussion Questions, 159

Exercises, 159

Knowledge Busters, 162

Appendix 7A-1: Website Addresses, 164

8 Assurance Services And Auditing Research 165

Assurance Services, 166

Consulting Services and Standards, 166

Attestation Services and Standards, 168

Auditing Standard-Setting Environment, 170

Auditing Standard-Setting Process, 170

Public Company Accounting Oversight Board (PCAOB), 171

Auditing Standards Board (ASB), 172

International Auditing and Assurance Standards Board (IAASB), 176

AICPA Online Professional Library, 176

AICPA Code of Professional Conduct, 177

Auditing Standards in the Public Sector, 180

Thomson Reuters Checkpoint, 180

Compilation and Review Services, 183

Role of Judgment and Professional Skepticism in Accounting and Auditing, 183

Economic Consequences, 184

Data Analytics/Emerging Technologies in Auditing Research, 184

Summary, 185

Discussion Questions, 186

Exercises, 186

Knowledge Busters, 187

Appendix: CPA Exam Audit Simulation, 188

9 Refining The Research Process 190

Method for Conducting Research, 190

Step One: Identify the Issues or Problems, 192

Step Two: Collect the Evidence, 194

Step Three: Analyze the Results and Identify Alternatives, 198

Step Four: Develop a Conclusion, 199

Step Five: Communicate the Results, 200

Remain Current in Knowledge and Skills, 201

Complexities in Practice, 202

Developing Professional Skills Needed for Practice, 203

Summary, 204

Discussion Questions, 204

Exercises, 205

Knowledge Busters: For each problem, analyze, consider alternatives, and write a research memo., 206

Appendix 9A-1: Certifications and Associations for Accounting, Auditing, and Tax, 207

Appendix 9A-2: Research Sources from AICPA, FASB, PCAOB, and Others, 208

Appendix 9A-3: Abbreviations for International, Canadian, and U.K. Standards, 210

10 Forensic Accounting Research 213

Forensic Accounting Standards, 214

Definition of Fraud, 215

Types of Fraud, 215

The Fraud Triangle, 216

Overview of a Financial Statement Fraud Examination, 219

Step One: Identify the Issue and Plan the Investigation, 220

Step Two: Gather the Evidence and Complete the Investigation Phase, 220

Step Three: Evaluate the Evidence, 221

Step Four: Report Findings to Management or Legal Counsel, 222

Business Investigations, 222

Computer Technology in Fraud Investigations, 223

Data-Mining Software, 223

Data Analytics, 225

MindBridge Ai Auditor, 225

Public Databases, 227

Courthouse Records, 227

Company Records, 228

Online Databases, 229

The Internet, 229

Instant Checkmate (www.instantcheckmate.com), 230

Zoominfo.com (www.zoominfo.com), 230

Other Websites, 230

Fraud Investigation Regulations, 230

Summary, 231

Discussion Questions, 231

Exercises, 231

Knowledge Busters, 232

Index 233

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