Accounting and Auditing Research, 10th 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.
Table of Contents
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 6
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 Critical Thinking and Effective Writing Skills for the Professional Accountant 22
Critical Thinking Skills 22
Levels of Thinking 24
Universal Elements of Reasoning 27
An Example of Using Critical Thinking Skills 28
Effective Writing Skills 29
Writing as a Process 30
Punctuation Primer 31
Improved Writing Skills Required 34
Active Voice 34
Short Sentences 34
Definite, Concrete, Everyday Language 35
Tabular Presentation 35
Limited Jargon and Technical Terms 35
No Multiple Negatives 36
Elements of Plain English 36
Writing Effective Texts, e-mails, and Letters 37
Writing Memos to the File 38
Summary 39
Discussion Questions 39
Exercises 40
3 The Environment of Accounting Research 43
The Accounting Environment 43
The SEC and the Standard-Setting Environment 44
Rules-Based vs. Principles-Based Accounting Standards 46
Financial Accounting Standards Board 46
FASB Strives to Simplify Standards 48
Content of Authorities 48
FASB Due Process 49
FASB Conceptual Framework Project 51
Statements of Financial Accounting Concepts Nos. 1-8 52
American Institute of Certified Public Accountants (AICPA) 52
Governmental Accounting Standards Board 53
Other Organizations Influencing Standard Setting 55
U.S. Generally Accepted Accounting Principles (U.S. GAAP) 57
The FASB Accounting Standards CodificationTM 58
Using Authoritative Support 59
Reading an Authoritative Pronouncement 60
Accounting Choices Have Economic Consequences 62
Summary 62
Discussion Questions 63
Exercises 63
4 Financial Accounting Research Tools 65
Accounting Research Online 66
Database Research Strategies 66
Step One: Define the Information Needed 66
Step Two: Determine the Sources to Search 66
Step Three: Use Appropriate Search Methods 67
Step Four: View the Results and Manage the Information 67
Step Five: Communicate the Search Results 67
FASB Accounting Standards CodificationTM Research System 67
The Research Process 68
Locating U.S. GAAP Using the Codification 72
Examples Using the Codification 72
SEC Accounting for Public Companies 73
SEC Regulations and Sources 74
The SEC’s Published Views and Interpretations 74
SEC Staff Policy/Interpretations 75
Accessing SEC Filings and Regulations 77
Cases to Practice Accounting Research 78
Data Analytics for the Accounting Researcher 79
Summary 80
Discussion Questions 80
Exercises 81
Knowledge Busters: The Codification 84
Appendix: CPA Exam - Financial Accounting Simulations 89
Document Review Simulation 93
5 The Environment of International Research 95
International Accounting Environment 95
International Accounting Standards Board (IASB) 97
IASB Authorities 99
IASB Due Process 100
Interpretations Committee Due Process 101
IASB’s Conceptual Framework 102
Principles-Based Accounting Standards 102
IFRS Funding Regulation, and Enforcement 103
International Financial Reporting Standards (IFRS) Research 105
IFRS Hierarchy 105
Electronic International Financial Reporting Standards (eIFRS) 105
Summary 107
Discussion Questions 107
Exercises 108
Knowledge Busters 109
6 Other Research Databases and Tools 111
Other Database Research Strategies 111
Step One: Define the Information Needed 112
Step Two: Determine the Sources to Search 112
Step Three: Use Search Techniques and Tools 113
Step Four: View the Results and Manage the Information 114
Leading Publishers of Global Financial Information 115
Commercial Accounting Databases and Tools 115
U.S. Accounting Research Tools 117
U.S. Government Accounting Databases 118
Financial Research Databases 120
S&P Capital IQ 121
Mergent Online 122
Other Financial Databases and Sources 123
Research Challenges for Business Research 124
Business Research Databases and Tools 124
Article Index Sources 125
Other Specialized Research 125
Massive Legal Research Databases 126
LexisNexis Database Products 127
Westlaw Database Products 128
Recent Legal Database Competitors 129
Summary 129
Discussion Questions 130
Exercises 130
Knowledge Busters 132
Appendix 6A-1: Website Addresses 132
7 Tax Research for Compliance and Tax Planning 135
Tax Planning Concepts and Tax Research Goals 135
Tax Research Goals 136
Tax Research Challenges 137
Specialized Tax Research Databases 138
Thomson Reuters Checkpoint 139
Primary Tax Authorities 139
The Code 140
Treasury Regulations 142
Revenue Rulings and Revenue Procedures 144
Lesser Administrative Sources (Nonprecedential) 145
U.S. Tax Court 146
Other Judicial Sources of Authority 147
Steps in Conducting Tax Research 148
Step One: Investigate the Facts and Identify the Issues 148
Step Two: Collect the Appropriate Authorities 148
Step Three: Analyze the Research 151
Step Four: Develop the Reasoning and Conclusion 154
Step Five: Communicate the Results 154
Evolving Professional Concerns and Changes 156
Professional Standards for Tax Services 158
Data Analytics in Tax Research 159
Summary 160
Discussion Questions 160
Exercises 161
Knowledge Busters 164
Appendix 7A-1: Website Addresses 165
8 Assurance Services and Auditing Research 166
Assurance Services 167
Consulting Services and Standards 167
Attestation Services and Standards 169
Auditing Standard-Setting Environment 171
Auditing Standard-Setting Process 171
Public Company Accounting Oversight Board (PCAOB) 172
Auditing Standards Board (ASB) 173
International Auditing and Assurance Standards Board (IAASB) 177
AICPA Online Professional Library 177
AICPA Code of Professional Conduct 178
Auditing Standards in the Public Sector 182
Thomson Reuters Checkpoint 182
Compilation and Review Services 184
Role of Judgment and Professional Skepticism in Accounting and Auditing 186
Economic Consequences 187
Data Analytics/Emerging Technologies in Auditing Research 187
Summary 188
Discussion Questions 188
Exercises 189
Knowledge Busters 190
Appendix: CPA Exam Audit Simulation 191
9 Refining the Research Process 193
Method for Conducting Research 193
Step One: Identify the Issues or Problems 195
Step Two: Collect the Evidence 197
Step Three: Analyze the Results and Identify Alternatives 201
Step Four: Develop a Conclusion 202
Step Five: Communicate the Results 203
Remain Current in Knowledge and Skills 204
Complexities in Practice 205
Developing Professional Skills Needed for Practice 206
Summary 207
Discussion Questions 207
Exercises 208
Knowledge Busters 209
Appendix 9A-1: Certifications and Associations for Accounting, Auditing, and Tax 210
Appendix 9A-2: Research Sources from AICPA, FASB, PCAOB, and Others 211
Appendix 9A-3: Abbreviations for International, Canadian, and U.K.
