Chapter 1

Introduction to Applied
Professional Research
 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
 Attributes of Accounting and
Auditing Research Design
Efficiency- Research should be structured so
that the fewest number of sources are reviewed
in developing a conclusion.
General Applicability- Research design should
apply to a wide variety of problems or issues.
Conclusive- Research design should result in a
defensible conclusion.
 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)
 Research on the CPA 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
Step 1
Identify the issue

Step 2
Collect Evidence

}
Step 3
Evaluate results and Document the
identify alternatives research process

Step 4
Develop conclusion

Step 5
Communicate results
 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
 3. Analyze the Results 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