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.
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. Standards 213 10 Forensic Accounting Research 216 Forensic Accounting Standards 217 Definition of Fraud 218 Types of Fraud 218 The Fraud Triangle 219 Overview of a Financial Statement Fraud Examination 222 Step One: Identify the Issue and Plan the Investigation 223 Step Two: Gather the Evidence and Complete the Investigation Phase 223 Step Three: Evaluate the Evidence 224 Step Four: Report Findings to Management or Legal Counsel 224 Business Investigations 225 Computer Technology in Fraud Investigations 225 Data-Mining Software 226 Data Analytics 227 MindBridge Ai Auditor 228 Public Databases 230 Courthouse Records 230 Company Records 231 Online Databases 232 The Internet 232 Instant Checkmate (www.instantcheckmate.com) 232 Zoominfo.com (www.zoominfo.com) 233 Other Websites 233 Fraud Investigation Regulations 233 Summary 233 Discussion Questions 233 Exercises 234 Knowledge Busters 234 Index I-1