Guide to Intermediate Accounting Research, 3e
| ISBN: 978-1-61853-587-0 | Copyright 2024
Welcome to Guide to Intermediate Accounting Accounting Research, Third Edition!
Increasingly, accounting research and communication skills are being regarded as fundamental to success in our profession. Professionals who excel in these areas will likely experience a distinct competitive advantage relative to their peers. At the same time, in today’s highly regulated business climate, the consequences of inadequately researching and documenting accounting judgments can be severe (e.g., PCAOB or SEC enforcement actions). Recognizing the importance of research skills, research simulations are now a key component of the national CPA exam. This hands-on guide aims to teach students these important skills.
In this guide, students will learn to confidently address and communicate accounting research issues, from start to finish. Students will not only take away the ability to identify the accounting problem (the “researchable question”), but will gain experience locating and applying guidance within the FASB Codification. In learning to use the Codification, students will have the opportunity to apply guidance to a variety of actual accounting topics.
Recognizing that students cannot learn to research simply by reading about research, this guide offers students numerous opportunities to actively apply what they have learned.
This guide is intended to serve a supplement to the materials used in an intermediate or advanced accounting course. It includes many opportunities to apply Codification guidance to related accounting topics (including, for example, leases, and revenue recognition). Practitioners and staff training programs can also benefit from the research and communication strategies covered in this guide, while gaining exposure to actual excerpts and topics covered in the Codification.
Colleges and universities are increasingly including
accounting research as a curriculum requirement for undergraduate and/or graduate-level accounting students. Often, students
reaching this stage of their accounting program will have just completed
their first accounting internship.
Interns, as with new staff accountants, will quickly discover that they are expected to
learn on the job (accounting can be a sink-or-swim environment). This guide will provide students with exposure to research in a format that is understandable and engaging, allowing them to succeed in their future professional endeavors.
Outstanding Features of This Guide
This guide unites research techniques with actual technical accounting issues. Students will move their understanding of accounting issues and research techniques forward along the knowledge continuum, from simply understanding to having the ability to critically think about and apply accounting issues. The practical examples and exercises in this guide will challenge students to actively learn while they read.
Instructors will value that this guide allows students to independently read and practice the baseline skills necessary to become accounting researchers, leaving instructors free to expand lectures into discussions of accounting judgments, student presentations, current events, and classroom discussions of (or hands-on group practice with) case studies. In short, instructors will be able to actively engage students in classroom debates and discussions, because they can spend less of their valuable classroom time lecturing on basic research and communication skills.
Overview of the Guide
- Chapter 1 provides an in-depth introduction to the FASB Codification, and emphasizes that students should perform Browse (as opposed to keyword searches) when possible.
- Chapter 2 introduces the research process.
- Chapter 3 introduces the fundamentals of effective technical writing, including the format of an accounting issues memorandum, techniques for effective email communication of research, and appropriate style for technical accounting writing.
Research is a skill that you learn by doing; accordingly, the pedagogy in this guide is designed to foster active learning.
Chapter Opening Vignettes, Learning Objectives, and “Organization of This Chapter” Diagrams
Each chapter opens with a brief vignette placing students in the shoes of a beginning researcher. This opening vignette is followed by a list of the learning objectives for the chapter, and then by a diagram illustrating the organization of content within the chapter. These chapter-opening elements are intended to generate reader enthusiasm for chapter content, as well as provide students with an overview of the information to come.
Chapters are written in concise, easy to understand language, with boldfaced key terms to call students’ attention to certain topics. In addition, chapters include extensive screenshots from the Codification and diagrams illustrating key chapter concepts, intended to both engage students and improve their familiarity with research tools.
Chapters also include the following features, intended to engage students in active learning:
Now You Try
Throughout each chapter, students are challenged to practice and apply key skills as they are taught (Now YOU Try questions). These exercises might involve, for example, a student being asked to “draw a picture” of a transaction, “draft an email” describing an issue, “show the search path you would use,” or “identify the journal entries” for a scenario, using guidance from the Codification as a guide for the appropriate accounting. Instructors can use these questions as a lead-in to active in-class discussions.
Tips from the Trenches
Periodically throughout the text, students will find TIPS from the Trenches, which offer additional insight on chapter content. These tips are designed to be like the insights you might hear an audit senior offer an audit staffer from across the table.
End of Chapter Questions and Case Studies
At the conclusion of each chapter, review questions and exercises are provided, which instructors may choose to assign as homework.
- The review questions encourage students to recall and apply key points from the reading.
Instructors may choose to use these as a basis for quiz questions.
- The exercises provide students with an opportunity to practice their research skills using the FASB Codification.
In addition, case study questions are included at the end of each chapter, providing students with the opportunity to apply the research process to more involved accounting issues. Students may be asked to respond to these questions in the form of an email or by drafting an accounting issues memo. Cases of varying degrees of complexity are provided; accordingly, instructors may choose to assign case study questions as individual homework or as group research assignments.
New to This Edition
- Features the latest FASB Codification Platform: This revision offers updated search strategies for navigating the new FASB Codification interface.
- New Standards: Continued, current emphasis on navigating the revised revenue and lease topics as well as additional coverage of recently issued ASUs.
- Improved Opening Scenario Integration: Improved integration between opening scenarios and chapter content, building upon the success of the Andale Events (concession sales) example that runs through Chapters 2 and 3.
- Case Studies: The text includes new, current, and real-world case studies of varying difficulty level. Cases continue to place increased emphasis upon the use of professional judgment.
All supplements for this guide have been created by the guide’s author.
PowerPoint Slides—Available for each chapter, PowerPoint lecture slides highlight key mat- ter from each chapter.
Solutions Manual—Includes solutions to all end-of-chapter review questions, exercises, and case studies.
Now YOU Try Responses—Available to instructors, solutions to the Now You Try exercises are intended to assist instructors in leading class discussions.
|Foreword (pg. iii)|
|About the Author (pg. iv)|
|Preface (pg. v)|
|Brief Table of Contents (pg. x)|
|Contents (pg. xi)|
|Chapter 1: The FASB Codification: Introduction and Search Strategies (pg. 2)|
|What Is the FASB Codification? (pg. 4)|
|Now [ YOU ] Try 1.1 (pg. 5)|
|What Sources of Guidance Were Used to Populate the Codification? (pg. 5)|
|Now [ YOU ] Try 1.2 (pg. 6)|
|How Is the Codification Updated? (pg. 6)|
|Navigating the Codification (pg. 6)|
|How is Information Organized Within the Codification? (pg. 7)|
|Now [ YOU ] Try 1.3 (pg. 8)|
|Areas and Topics (pg. 9)|
|Now [ YOU ] Try 1.4 (pg. 10)|
|Subtopics (pg. 10)|
|Now [ YOU ] Try 1.5 (pg. 11)|
|Sections (pg. 11)|
|Now [ YOU ] Try 1.6 (pg. 16)|
|Subsections and Paragraphs (pg. 16)|
|Now [ YOU ] Try 1.7 (pg. 17)|
|Tips for Performing Browse Searches (pg. 18)|
|Show All in One Page (pg. 19)|
|Now [ YOU ] Try 1.8 (pg. 19)|
|Navigating a Subtopic, Considering All Areas of “Required Reading” (pg. 20)|
|Now [ YOU ] Try 1.9 (pg. 22)|
|Other Search Methods (pg. 22)|
|Keyword Searches (pg. 22)|
|Now [ YOU ] Try 1.10 (pg. 23)|
|Now [ YOU ] Try 1.11 (pg. 25)|
|Now [ YOU ] Try 1.12 (pg. 26)|
|Search by ASC Reference Number (pg. 26)|
|Master Glossary (pg. 26)|
|Now [ YOU ] Try 1.13 (pg. 27)|
|Pending Content and Effective Dates (pg. 28)|
|What is “Pending Content”? (pg. 28)|
|Now [ YOU ] Try 1.14 (pg. 28)|
|Now [ YOU ] Try 1.15 (pg. 29)|
|Private Company Accounting Alternatives in the Codification (pg. 30)|
|Now [ YOU ] Try 1.16 (pg. 30)|
|Chapter Summary (pg. 30)|
|Review Questions (pg. 30)|
|Exercises (pg. 31)|
|Case Study Questions (pg. 33)|
|Chapter 2: The Research Process (pg. 36)|
|Why Use a Research Process? (pg. 38)|
|The Accounting Research Process (pg. 38)|
|Pre-Step: Understand the Business (Industry) (pg. 39)|
|Now [ YOU ] Try 2.1 (pg. 41)|
|Step 1: Understand the Facts/Background of the Transaction (pg. 41)|
|Now [ YOU ] Try 2.2 (pg. 42)|
|Step 2: Define the Problem. That Is, Identify the “Researchable Question.” (pg. 43)|
|Now [ YOU ] Try 2.3 (pg. 44)|
|Now [ YOU ] Try 2.4 (pg. 44)|
|Step 3: Stop and Think: What Accounting Treatment Will Likely Be Appropriate? (pg. 44)|
|Step 4: Search Potentially Relevant Sources of Guidance, Copying Any Relevant Guidance into a Word (pg. 45)|
|Now [ YOU ] Try 2.5 (pg. 45)|
|Now [ YOU ] Try 2.6 (pg. 46)|
|Step 5: Analyze Alternatives, Documenting Your Consideration of Each (pg. 47)|
|Now [ YOU ] Try 2.7 (pg. 47)|
|Step 6: Justify and Document Your Conclusion (pg. 49)|
|Now [ YOU ] Try 2.8 (pg. 49)|
|Judgment and Decision Making-A Brief Introduction (pg. 49)|
|Common Biases (pg. 50)|
|Now [ YOU ] Try 2.9 (pg. 51)|
|How Do You Overcome These Biases? (To Reach a Sound Decision?) (pg. 51)|
|Learn from Your Mistakes (and Successes!) (pg. 52)|
|Now [ YOU ] Try 2.10 (pg. 52)|
|Chapter Summary (pg. 52)|
|Review Questions (pg. 53)|
|Exercises (pg. 53)|
|Case Study Questions (pg. 55)|
|Additional References (pg. 57)|
|Chapter 3: Creating Effective Documentation (pg. 58)|
|Documentation Is Integral to Accounting Research (pg. 60)|
|Communicating Accounting Research (pg. 61)|
|Emailing the Results of Research Questions (pg. 61)|
|Now [ YOU ] Try 3.1 (pg. 63)|
|Drafting an Accounting Issues Memorandum (pg. 65)|
|Facts (pg. 66)|
|Now [ YOU ] Try 3.2 (pg. 67)|
|Issue(s) (pg. 68)|
|Analysis (pg. 68)|
|Now [ YOU ] Try 3.3 (pg. 71)|
|Now [ YOU ] Try 3.4 (pg. 72)|
|Now [ YOU ] Try 3.5 (pg. 73)|
|Conclusion (pg. 73)|
|Now [ YOU ] Try 3.6 (pg. 74)|
|Financial Statement and Disclosure Impacts (pg. 75)|
|Reread Your Work Before Submitting (and what to look for) (pg. 75)|
|Now [ YOU ] Try 3.7 (pg. 76)|
|Properly Referencing Accounting Guidance (pg. 76)|
|How Do I Reference a Passage from the Codification? (pg. 76)|
|Now [ YOU ] Try 3.8 (pg. 77)|
|Should I Ever Use Footnotes in Professional Memos? (pg. 77)|
|When Should I Use Quotation Marks? (pg. 78)|
|When Is It Appropriate to Alter an Excerpt from the Guidance? (pg. 78)|
|When Is It Appropriate to Use Ellipses? (pg. 79)|
|Style Tips for Professional Communication (pg. 80)|
|Use Proper Voice in Your Memos (pg. 80)|
|Keep Your Language Neutral (Avoid Strong Words) (pg. 80)|
|Get the Grammar Right (pg. 81)|
|Getting Feedback On Your Writing (pg. 82)|
|Chapter 4 Appendix (pg. 83)|
|Sample Accounting Issues Memo (pg. 83)|
|Chapter Summary (pg. 87)|
|Review Questions (pg. 87)|
|Exercises (pg. 88)|
|Case Study Questions (pg. 90)|