Chapter 1

Introduction to
Professional
Research
 Learning Objectives

Importance of research to
professional accountants
Definition and nature of

professional accounting research

US Securities & Exchange

Commissions view of research

 Learning Objectives
(cont.)

Role of research within a public

accounting firm
Basic steps of the research process

Importance of critical thinking and

effective communication
Importance of Research on CPA

Exam
 Research importance

Changes in law, new services,

technologies, professional
standards.
Accounting, attestation, tax
compliance, forensic accounting,
fraud examinations, tax planning.
 Research Importance
(contd.)

Must have a clear definition of the

problem, using professional
databases to search for relevant
authorities, reviewing authoritative
literature, evaluating alternatives,
drawing conclusions, and
communicating results.
Develop critical thinking skills
 What is Research?
The act of conducting research is a
systematic investigation of an issue or
problem utilizing the researchers
professional judgment.

Accounting & Auditing Research

The act of a systematic and logical approach
and documenting evidence underlying a
conclusion relating to an accounting or
auditing issue or problem currently
confronting the accountant or auditor .
Accounting & Auditing
Research
Theoretical research
Attempt to create new knowledge or
add to a body of knowledge
Applied research
Investigates an issue of immediate
practical importance
A priori before the fact should a
client open a store at a certain location
A posteriori after the fact tax return
 Nature of Research

Most important step is problem

identification!
Must be able to conduct effective and
efficient research
Effective proper recording,

classification, and disclosure, in

compliance with authoritative
pronouncements
Efficient meet deadlines and

managerial costs
 Critical Thinking and
Effective Communication

Critical Thinking
Must know how to think

Be able to identify a problem,

gather relevant facts, analyze the

issue, synthesize and evaluate
alternatives, and develop
appropriate alternatives.
 Critical Thinking and
Effective Communication
(contd.)

Effective Communication
Coherence, conciseness, good use

of standard English, and

achievement of the purpose for the
intended reader (memo if internal,
report if external)
 Exam

Each part except for BEC currently

has a research component consisting
of a simulation.
Must be able to research a database

and to identify the exact

citation/answer to a posed problem.
 The Research Process

1. Investigate and analyze a clearly

definable issue or problem
2. Use an appropriate scientific
approach
3. Gather and document adequate and
representative evidence
4. Employ logical reasoning in drawing
conclusions
5. Support the validity or
reasonableness of the conclusions
 1. Identify Relevant
Facts

Must define the problem!!!!!!

Why and what

At first, it is better to gather too

many facts than too little as you are

learning the research process.
Exact source of the issue,

justification for the issue, and scope

2. Collect the evidence

Review relevant authoritative

accounting or auditing literature
and survey present practice.
Be familiar with available resources

You may have to develop your own

resolution based on a series of facts,

if a clear cut answer does not exist
Must evaluate cost/benefits
 and Identify the
Alternatives

Support each alternative with

authoritative literature or theoretical
justification with concise
documentation.
Properly document alternatives from

organized, collected information.

 4. Develop Conclusion

After analyzing alternatives,

including economic consequences,
develop conclusion.
Often, only the final conclusion will

be presented to the client

(alternatives may be in the
appendix)
 5. Communicate the
Results

Often in the form of a research memo

Statement of facts; clear, precise

statement of the issue; brief

straightforward conclusion;
discussion of authoritative
literature; explanation of how it
applies to set of facts
Avoid excess
 Research Navigation
Guide
Functional Areas
Financial Accounting & Reporting
SEC Issues
Taxation
Managerial Accounting
Audit/ Attestation
Governmental/ Not-for-profit Accounting Topic (Issue)
Other Areas
Assets
Liabilities
Equity
Sub-Topics
Revenues
Expense Cost of Sales
Compensation
R&D
Etc.
Section
Recognition
Measurement
Disclosure