Reports Lesson 8 Re port Cha ra c te ris tic s Ra ng e in te rms of le ng th S hould be a c cura te a nd cohe re nt P re s e nte d a ttra ctive ly Ha ve c le a r a nd concis e writing Conta in informa tion cra fte d with the re a de rs ’ backgrounds and expectations in mind Planning a Report First, follow all company guidelines and policies Consider the purpose and who the readers will be—keep in mind that there may be multiple readers/groups of readers! Various departments might be interested in different aspects of the same issue Groups might have a range of familiarity with the subject at hand Typically a great deal of research will be required You will probably have to consult and reference generally accepted accounting principles Guiding Questions for Report Construction Is the subject covered adequately? • • • • Background information when necessary Adequate explanations, supporting data, and examples Citations from GAAP and other authorities, as needed Application to the specific needs and interests of the readers Is the report too long? • • • Digressions—off the subject Too much explanation or detail Repetitions or wordiness Is the report logically organized? • In order from the most to least important—from the reader’s point of view • Summary sentences where helpful • Transitions to link ideas • Short, well-organized paragraphs with topic sentences Parts of a Report Transmittal document (continue d) Title page Conclusion Table of Contents Appendices List of illustrations Notes Summary section Bibliography Introduction Graphic illustrations Body of the report Transmittal Document Either a cover letter or memo that presents the report to the people for whom it was written Includes any information necessary for understanding the report Should remain concise but contain the report’s title, topic, purpose May be more personal than the rest of the report Title Page In a professional report the title page might look like: Leases and Liability Prepared for Dodson Manufacturing and Co. Prepared by Jon Kim May 6, 2014 Table of Contents The table of contents appears on a separate sheet of paper and includes a heading. The contents listed are major parts of the report, with the transmittal document excluded and appropriate page numbers. Most books, periodicals, and texts that you read have tables of contents after which you can base your own List of Illustrations Includes titles and page numbers of graphs, charts, and other illustrations. Summary Section Summarizes the main ideas and recommendations Can range from a paragraph to a few pages, immediately before or after the introduction Has many different names, depending on convention or the situation, including: executive summary, abstract, synopsis Introduction • Is typically longer than that of either a letter or a memo • Identifies the subject of the report and states why it was written—who requested it, or for whom it was prepared. This is the place to state the purpose of the report in specific terms: The purpose of this report is to discuss the feasibility of purchasing Golden Manufacturing, Inc. Not like: The purpose of this report is to discuss acquisition. • Might also include background information to help the reader • Should lead into the report’s development, and the order in which the topics are presented. A simple plan could be in sentence form, like: This report describes the proposed pension plan and then discusses its costs and benefits. Body of the Report The report’s body should be divided into sections or maybe even subsections with appropriate headings. Begin each section with a statement that summarizes the main idea covered in that section. Conclusion In addition to the summary section at the beginning, the conclusion should remind the readers of the report’s main ideas and recommendations. This could be one paragraph to several pages in length. Appendices (Optional) Depending on audience and need, you may want to include any technical information in an appendix at the end of the report. Make sure you title any appendices and refer to them in the body of the report. Notes and Bibliography Part of this depends on the style of documentation that you use. If you use endnotes, they should have a separate page labeled Notes. Most all reports have a bibliography and reference list. This identifies the sources you cited and may include additional references the reader can consult. It should begin on a separate page following the notes and should have a title such as Bibliography or References. Graphic Illustrations Graphs and tables may make the information in a report easier to understand or digest, and so should be included in your report. Especially if your data is statistical or numerical in nature, these may be to your advantage. Any graphics you include can be placed in the body of your report or in an appendix; be judicious with your placement for ease of reading. Appearance Use good quality paper and a high-quality printer. Reports may be single or double-spaced, depending on the situation. Transmittal documents and set off material are singlespaced. Pages should be numbered in lowercase Roman numerals for front matter (table of contents, list of illustrations, executive summary) and Arabic numerals for the remainder of the report, introduction through end matter. Style and Tone Usually formal, and therefore the style is impersonal. Avoid personal pronouns. Remain engaging and employ all the same effective writing techniques we have discussed thus far, meaning your reports should be simple, clear, and concrete. Unlike the actual report and depending on the situation, the transmittal document may have a more personal informal style. For a full-length example, consult your text. Effective Writing This page intentionally left blank TENTH EDITION Effective Writing A Handbook for Accountants Claire B. May, Ph.D. Gordon S. May, Ph.D. University of Georgia, Emeritus Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editor in Chief: Donna Battista Sponsoring Editor: Nicole Sam Editorial Project Manager: Heather McNally Editorial Assistant: Christine Donovan Marketing Manager: Alison Haskins Managing Editor: Jeff Holcomb Senior Production Project Manager: Roberta Sherman Manufacturing Buyer: Carol Melville Creative Director: Jayne Conte Text and Cover Designer: Suzanne Behnke Cover Photo: Fotolia Full-Service Project Management: Aptara®, Inc. Composition: Aptara®, Inc. Printer/Binder: STP/RRD/Harrisonburg Cover Printer: STP/RRD/Harrisonburg Text Font: Times Ten Roman (10/12) Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text. Copyright © 2015, 2012, 2009 by Pearson Education, Inc. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458, or you may fax your request to 201-236-3290. Many of the designations by manufacturers and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps. Library of Congress Cataloging-in-Publication Data May, Claire Arevalo. Effective writing: a handbook for accountants / Claire B. May, Ph.D., Gordon S. May, Ph.D.—Tenth edition. pages cm Includes index. ISBN 978-0-13-357949-9 1. Business report writing. 2. Communication in accounting. I. May, Gordon S. II. Title. HF5719.M375 2015 808.06’6657—dc23 2013045794 10 9 8 7 6 5 4 3 2 1 ISBN 10: 0-13-357949-2 ISBN 13: 978-0-13-357949-9 Brief Contents Preface PART 1: COMMUNICATION STRATEGIES Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 PART 2: 1 Accountants as Communicators 1 The Writing Process: An Overview 17 The Flow of Thought: Organizing for Coherence 35 A Sense of Style: Writing with Conciseness and Clarity 59 Standard English: Grammar, Punctuation, and Spelling 85 Format for Clarity: Document Design 110 Critical Thinking 125 Accounting Research 138 BUSINESS DOCUMENTS Chapter 9 Chapter 10 Chapter 11 Chapter 12 PART 3: xv 168 Letters 168 Memos 192 Reports 204 E-Communication and Social Media WRITING AND YOUR CAREER Chapter 13 224 241 Writing for Exams: CPA, CMA, and Academic Exams 241 Chapter 14 Writing for Employment: Résumés and Letters of Application 254 Chapter 15 Writing for Publication 270 Chapter 16 Oral Communication: Listening and Speaking 277 Index 291 v This page intentionally left blank Contents Preface PART 1: xv COMMUNICATION STRATEGIES 1 Chapter 1 Accountants as Communicators 1 What Do Accountants Write? 3 How Well Do Accountants Write? 4 What Makes Writing Work? 4 Effective Writing: An Example 6 You Can Become a Good Writer 6 Writing and Other Forms of Communication Reading Listening Speaking 8 8 8 9 Writing and Problem Solving Writing and Critical Thinking Communications and Ethics Conclusion 12 Exercises 12 Notes 15 9 10 10 Chapter 2 The Writing Process: An Overview Getting Started: Identifying Purpose 18 Thinking Critically about the Issues Analyzing the Readers 20 Getting Your Ideas Together Gathering Information 23 Generating Ideas 23 Arranging Ideas: Organization Writing the Draft Revising the Draft 22 24 26 26 The Final Draft 28 Dealing with Writer’s Block Writing under Pressure 29 vii 28 20 17 viii Contents Writing and Electronic Media 29 Help from Colleagues: Critiquing 30 Exercises 30 Chapter 3 The Flow of Thought: Organizing for Coherence 35 Writing with Unity 35 Using Summary Sentences 36 Responding to Readers’ Questions and Concerns Transitions 38 Transitional Words and Phrases 39 Repetition of Key Words and Phrases Pronouns Used to Achieve Coherence Problems with Transitions 43 Paragraphs 37 41 42 44 Length 44 Structure 44 Paragraph Development 47 Organizing Answers to Discussion Questions and Essays 48 Discussion Questions 48 Essays 49 Applying Essay Techniques to Other Kinds of Writing Sample Essay 52 Test Yourself 54 Test Yourself: Answer Exercises 54 54 Chapter 4 A Sense of Style: Writing with Conciseness and Clarity 59 Conciseness 59 Unnecessary Words 59 Simplicity 61 Verbs and Nouns 64 Clarity 66 Jargon 66 Precise Meaning 67 Concrete, Specific Wording Readable Writing 70 72 Passive and Active Voice Variety and Rhythm 75 Tone 76 Test Yourself 79 Test Yourself: Answers 72 79 52 Contents Exercises Notes Chapter 5 80 84 Standard English: Grammar, Punctuation, and Spelling 85 Major Sentence Errors Fragments 86 Comma Splices Fused Sentences 85 86 87 Problems with Verbs 88 Tense and Mood 88 Subject-Verb Agreement 89 Problems with Pronouns 90 Pronouns and Gender 91 Problems with Modifiers Parallel Structure 93 Apostrophes and Plurals Commas 94 Comma Guide Sheet 92 93 95 Colons and Semicolons Direct Quotations 98 Spelling 100 Help from the Computer Test Yourself 102 Test Yourself: Answers Exercises 104 Notes 109 97 101 103 Chapter 6 Format for Clarity: Document Design Good Design: An Illustration 110 A Professional Appearance 114 Paper and Print 114 White Space and Margins Neatness Counts! 115 Formatting 114 115 Headings 115 Lists and Set-Off Material Pagination 117 Graphic Illustrations Exercises 122 Note 124 117 116 110 ix x Contents Chapter 7 Critical Thinking 125 Making an Argument: The Process 126 Reaching Sound Conclusions: Two Approaches to Logic 129 Fallacies: Mistakes in Reasoning 131 Critical Thinking and Ethical Dilemmas 133 Exercises 134 Note 137 Chapter 8 Accounting Research Research: Basic Guidelines 138 138 FASB Accounting Standards Codification® 139 Electronic Sources of Information 140 Printed Sources of Information 141 Note Taking 142 Direct Quotation and Paraphrase 143 Plagiarism 143 Organizing Your Notes and Ideas 144 Writing Your Research Report or Memo 144 Integrating Notes into Your Writing 144 Revising 145 Documentation 145 Critical Thinking and Technical Accounting Research 147 Financial Accounting Research 147 Steps in the Financial Accounting Research Process 147 Exercises 150 Notes 153 Appendix 8-A: Sources of Accounting and Financial Information on the Internet 155 Appendix 8-B: Online Database Services 159 Appendix 8-C: Other Printed Sources of Accounting and Financial Information 161 Appendix 8-D: Internal Documentation Style 162 Appendix 8-E: Endnotes or Footnotes and Bibliography Style 165 PART 2: BUSINESS DOCUMENTS Chapter 9 Letters 168 Principles of Letter Writing Planning a Letter 168 Organization 169 Conciseness and Clarity 168 170 168 xi Contents Tone 170 Form and Appearance 170 Parts of the Letter 173 Responding to Correspondence Typical Accounting Letters 175 176 Engagement Letters 176 Management Advisory Letters Tax Research Letters 179 Standardized Letters: A Caution Letters Sent by Email 184 Exercises 184 Notes 191 Chapter 10 Memos 192 Memos: Some Basic Principles 179 184 192 The Parts of a Memo: Organizing for Coherence Concise, Clear, Readable Memos: Style and Tone 194 Formats 194 Sample Memos 198 Memos to Clients’ Files Memos Sent by Email Exercises 199 Notes 203 198 198 Chapter 11 Reports 204 Planning a Report 204 The Parts of a Report 207 Transmittal Document 208 Title Page 208 Table of Contents 208 List of Illustrations 209 Summary Section 209 Introduction 209 Body of the Report 210 Conclusion 210 Appendices (Optional) 210 Notes and Bibliography 210 Graphic Illustrations 211 Appearance 211 Style and Tone 211 Exercises 220 Note 223 192 xii Contents Chapter 12 E-Communication and Social Media Email 225 Composing the Email 225 Uses for Email: Informal or Formal? Email within an Organization 228 External Email 229 Email—a Few More Cautions 229 224 228 Use of Electronic Media in Job Searches and Job Applications 231 Use of Social Media for Job Searches 231 Electronic Submission of Résumés 231 LinkedIn Profiles 232 Social Media Used in the Accounting Profession Social Media Policies 233 Blogs 234 Instant Messaging and Texting Telephone Etiquette Cell Phones 232 235 236 237 A Final Word: Sometimes Face-to-Face Is Better Exercises 237 Notes 240 PART 3: WRITING AND YOUR CAREER 237 241 Chapter 13 Writing for Exams: CPA, CMA, and Academic Exams 241 Writing for the CPA Exam 241 Writing for the CMA Exam 244 Preparing for and Taking the CPA Exam or CMA Exam 246 Manage Your Time 246 Use the Exam Questions to Organize the Response Writing Responses for Academic Exams Preparation 247 Taking the Exam 247 Qualities of a Good Written Response 247 249 Effective Writing and Technical Mastery: Both Important 249 Exercises 250 Notes 252 247 Contents Chapter 14 Writing for Employment: Résumés and Letters of Application 254 Starting the Job Search: Researching Possible Employers 254 Preparing Your Materials 255 Follow Instructions 255 Prepare Your Résumé 256 What Not to Put on a Résumé 260 Write a Letter of Application 260 Write a Thank-You Letter 262 Electronic Submissions 263 Exercises 264 Notes 269 Chapter 15 Writing for Publication 270 Planning Your Article 270 Research 273 Drafting and Reviewing the Article 274 Submitting the Article 274 Exercises 275 Chapter 16 Oral Communication: Listening and Speaking 277 Listening Skills 277 For Conversations with Another Person or in a Small Group 277 For Large Group Discussions, Lectures, and Meetings 278 Oral Presentations 278 Preparing to Speak 279 Making the Presentation: Poise and Confidence 284 Special Considerations in Presentations of Financial Information 287 A Final Word 288 Exercises 288 Index xiii 291 This page intentionally left blank Preface Effective Writing: A Handbook for Accountants, 10th edition, is designed to help accounting students and practitioners improve their communication skills. It can be used as a supplementary text for regular accounting courses, as a text in an accounting communication course, or as a text in a business communication or technical writing course when these courses include accounting students. The handbook is also a useful desk reference or self-study manual for accountants in practice. Effective Writing guides the writer through all the stages of the writing process: planning, including analysis of audience and purpose; critical thinking about the problem to be solved or the job to be accomplished; generating and organizing ideas; writing the draft; revising for readable style and correct grammar; and designing the document for effective presentation. In addition to these basic writing principles, the book covers letters, memos, reports, and other formats used by accountants in actual practice, including email, social media, and other forms of electronic communication. Throughout the text, Effective Writing stresses coherence, conciseness, and clarity as the most important qualities of the writing done by accountants. NEW TO THIS EDITION • Expanded coverage of writing for the CPA Exam and the CMA Exam, in addition to general principles of effective writing as practiced by professional accountants. • Assignment material has been extensively revised in all chapters. Many chapters now include exercises labeled “Current Professional Issues” to indicate assignments that are particularly useful in introducing students to current domestic or international issues with which the accounting profession is concerned. • Chapter 8, Accounting Research – Sources for electronic accounting research have been extensively updated. • Chapter 12, E-Communication and Social Media – New to this edition, this chapter covers the impact of electronic communication technology on communications and writing in the accounting profession, including email, texting, instant messaging, xv xvi Preface cell phones, use of social media in job searches, and the general impact of social media on the accounting profession. The chapter also covers telephone etiquette. • Chapter 13, Writing for Exams: CPA, CMA, and Academic Exams – This chapter has been revised to cover the new writing requirement on the CMA Exam. Coverage of the CPA Exam has also been expanded. • Chapter 15, Writing for Publication – Revised to cover blogs and responses to online publications In addition to its focus on effective writing and speaking, Effective Writing stresses other “soft skills” accountants need to be successful practitioners, such as the ability to listen attentively, read carefully, think critically, and interact with others in a respectful, professional way. Chapter 16 includes an extensive discussion of listening skills and also discusses the preparation of an oral presentation, including audience analysis and organization of materials, as well as techniques of effective delivery and the use of visual aids. Effective Writing also includes sections on the ethics of communication. Chapter 1 introduces students to ethical issues related to accounting communication, and Chapter 7 shows them how to use critical thinking skills to resolve ethical dilemmas. Critical thinking is the focus of Chapter 7, which introduces the principles of critical thinking and shows how careful reasoning can help students and professionals solve accounting problems. The chapter discusses inductive and deductive reasoning, the construction of an argument, and fallacies students will learn to recognize and eliminate. Another special feature of this book is Chapter 8, which discusses accounting research. Here you will find valuable reference material on such topics as • Where to find accounting information (including Internet sites) • How critical thinking can help you solve problems and write persuasive documents • How to write citations of accounting sources, including the FASB Accounting Standards Codification® and Internet sources Chapter 13 covers writing for professional and academic examinations, including the CPA exam and the CMA exam, both of which contain questions requiring candidates to demonstrate their writing ability. Chapter 14 provides additional guidance on writing for employment. This edition of Effective Writing includes many new and revised assignments that reinforce the concepts covered in the text. Some exercises have answers within the text for independent review. The Instructor’s Manual contains answers to many other exercises. Most chapters also include topics for writing or speaking assignments. The Preface xvii assignments, like the illustrations in the text, are concerned with accounting concepts and situations and thus will seem relevant and familiar to those studying and practicing accounting. In addition, many chapters in the 10th edition of Effective Writing contain assignments that will introduce students to currently emerging national and international topics affecting the profession. These assignments are labeled “Current Professional Issues” in the chapters. Effective Writing can be used in conjunction with traditional accounting courses. Instructors can assign cases and topics for research based on the accounting concepts being studied in class, or they can use the assignments provided in this handbook. Students then analyze the accounting problem, research the literature if necessary, and prepare answers according to an assigned format such as a letter, technical memo, formal report, or oral presentation. The handbook guides students toward principles of effective writing and speaking. Instructors can then evaluate students’ performance based on the criteria discussed in the text and the Instructor’s Manual. The Instructor’s Manual contains suggestions for everyone wishing to improve the communication skills of accounting students, whether in a regular accounting course or in a course devoted to communication. It includes topics such as motivating students to improve their communication skills, designing assignments, and evaluating performance, as well as chapter commentaries and masters for slides and handouts. The Instructor’s Manual can be downloaded through Pearson’s Instructor Resource Center, online at http://www.pearsonhighered .com/irc. We hope that this book will help those preparing to enter the profession, as well as those already in practice, to achieve greater success through effective communication. Claire B. May Gordon S. May This page intentionally left blank Part 1 Communication Strategies CHAPTER 1 Accountants as Communicators T he ability to communicate effectively, whether through speaking or writing, is essential to success in the accounting profession and in the business world in general.1 Writing and speaking, interpersonal skills, leadership skills, and the ability to think critically and to listen carefully are sometimes referred to as “soft skills,” as opposed to the “hard skills” of technical knowledge and ability. The major differences among competitors may often be found in the degree to which employees have mastered writing, speaking, and other non-technical skills. Soft skills are generally regarded as the key to business success and more important than technical accounting skills. One highly successful accountant has pointed out the importance of both writing and thinking: Some of the smartest accountants I have ever known are not the ones who knew standards backwards and forwards, but the ones that knew how to write and think.2 These skills are especially important in today’s global environment. According to the International Accounting Education Standards Board (IAESB), successful accountants must be able to “present, discuss, report and defend views effectively through formal, informal, written and spoken communication; and . . . listen and read effectively.”3 As you can see, to achieve your career goals in accounting, you may need to improve your communication skills. The American Institute of Certified Public Accountants (AICPA) believes that communication skills are now and will continue to be as important as professional knowledge, analysis and organization skills, technological skills, and research skills—all of which are essential for entry-level accountants (Figure 1–1). Among the personal attributes listed by the AICPA for competency in public accounting is “effective business writing.” An AICPA report says that the writing of entry-level professionals should demonstrate standard grammar, appropriate style and tone, logical organization, clarity, and conciseness.4 1 2 PART 1 Communication Strategies FIGURE 1–1 Knowledge and Skills Required of Entry-Level CPAs Chart I: Past --- --- --- --- --- --- --- --- --- ---- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- Chart II: Future --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ------------------- Legend Dots–Professional Knowledge Horizontal Lines–Technological Skills Checkers–Communications Skills Dashes–Research Skills Vertical Lines–Analysis and Organization Source: American Institute of Certified Public Accountants, Briefing Paper No. 2, Computerizing the Uniform CPA Examination—Issues, Strategies, and Policies: An Update, 5 March 2001. Effective writing skills are essential for accountants in all areas of professional practice, including managerial accounting. The IMA (formerly known as the Institute of Management Accountants) has stated that “written communication is a critically important skill set for the management accountant and for the effective functioning of accounting and finance teams.”5 So to be successful as well as competent, accountants must be good communicators, showing that they can use words effectively. Many colleges and universities now stress effective writing in accounting coursework. The AICPA evaluates candidates’ writing skills on the CPA exam,6 and the IMA evaluates writing skills on the CMA exam.7 Unfortunately, some students and accountants lack the skills they need to be effective communicators. Accounting firms are on record as being dissatisfied with the communication skills of entry-level accountants,8 and a high percentage of accounting firms have reported poor writing skills as one reason for job terminations.9 Accountants need communication skills to get a good job and to keep that job after they are hired. Of course, “communication skills” is a broad area that includes formal and informal oral presentations, CHAPTER 1 Accountants as Communicators 3 interpersonal communication, reading, listening, and skills in other related areas, including the ability to think carefully and critically. Ethical issues can also affect communication, both what accountants say and how they say it. Because this text is primarily about writing, we will now look at some of the documents accountants write on the job. WHAT DO ACCOUNTANTS WRITE? In every type of accounting practice, writing is an essential part of the job. Whether in public accounting, management accounting, not-forprofit accounting, or government accounting,10 and whether specializing in tax, auditing, systems, or some other area, accountants write almost every day. Examples in three specialized areas—tax, auditing, and systems— suggest a few of the many occasions that require accountants to write. Tax accountants in accounting firms often write memos to other members of the firm that describe the results of their research. These memos become part of the clients’ files. A tax accountant might also write a letter advising the client about the best way to handle a tax problem. Tax accountants must also write letters to the Internal Revenue Service (IRS) on behalf of clients, and occasionally may even write a judicial brief. Auditors write memos to be included in a client’s audit files that describe the work done on the audit. They may also write memos to their colleagues to request advice or to report research results. After the audit engagement, auditors may write advisory letters to management that suggest ways to improve accounting and internal control procedures. Systems specialists write documents for readers with varying degrees of computer expertise. They may write a beginners’ guide on how to use a software package or a highly technical report on a complex accounting system application. They may also write a narrative description of an accounting information system, as we will see later in this chapter. No matter what their specialty, all accountants write memos to their supervisors, subordinates, and co-workers to request or provide information. They also write letters to clients, agencies, and a variety of other readers. Technical reports and memos, both formal and informal, are also important ways in which accountants communicate. For instance, an accountant working for a corporation might write a report for management on alternative accounting treatments for a particular kind of business transaction. An accountant working for an accounting or business services firm might write a technical memo on how best to handle a client’s unusual accounting problem. Yet another kind of writing prepared by accountants is the narrative portion of financial statements. Footnote disclosures communicate information that users may need to interpret the statements 4 PART 1 Communication Strategies accurately. Unfortunately, the meaning of some footnote disclosures is not always clear to many financial statement readers. Several years ago, the Securities and Exchange Commission (SEC) issued a “plain English” disclosure rule requiring companies filing registration statements to write those statements in “plain English” so that readers would find them easier to understand. The rule enumerates several principles of “plain English,” including the use of short sentences and clear, concise language.11 Not all professional writing appears on paper. Email is nearly universal, and other forms of electronic communication have become increasingly important in recent years. To be effective, letters, memos, emails, reports, and other business documents must be well written. How will clients react if, after reading a letter from their CPA, they are still confused about their income tax problem? How will management or one’s supervisors react to a report that is poorly organized and hard to follow? HOW WELL DO ACCOUNTANTS WRITE? Earlier we noted that many entry-level accountants lack adequate writing skills, even though the ability to write well is essential for success in the business world. Some people believe the problem is getting worse, in part because we have become an online society in which a large part of everyday communication occurs via email and other forms of electronic communication. Electronic communication often emphasizes brevity over completeness, clarity, or attention to style. Therefore, we are being conditioned to use a type of writing that is not effective in many business situations. Yet even email and other forms of electronic communication can be written effectively, as Chapter 12 of this text shows. WHAT MAKES WRITING WORK? What is good writing? The list of tips for writers in Figure 1–2 summarizes many qualities of effective business writing, including the writing done by accountants. These qualities are stressed throughout this text. Let’s examine these tips in a little more detail. The first tip concerns the content of the document. You must know what you are talking about, and the information you give should be accurate and relevant. The second tip is critical thinking. You must analyze the issues with which you are dealing, including the questions and concerns of your readers. Can the issues be resolved in more than one way? If so, you will have to evaluate the alternatives carefully. CHAPTER 1 Accountants as Communicators 5 FIGURE 1–2 Tips for the Effective Writer 1. Content: Be sure that the accounting content is correct and complete. Have you addressed all relevant accounting issues? 2. Critical Thinking: Think carefully and critically about the issues with which you’re dealing. Anticipate questions and objections your readers might raise. 3. Appropriateness for Readers: Write the document with a particular reader in mind. Check that issues are discussed on a level the reader can understand. For most documents, it is better to focus on practical, explicit information and advice related to the case you are discussing rather than general accounting theory. 4. Conciseness: Write as concisely as possible, given the reader’s needs and the issues to be addressed. 5. Clarity: Develop a style that is clear and readable. Choose words that convey your meaning with precision and clarity. 6. Coherence: Structure the document so that it is coherent. The organization should be logical and the train of thought easy to follow. Summarize main ideas near the beginning of the document, and begin each paragraph with a topic sentence. 7. Revision: Revise the document so that it is polished and professional. It should be free of all spelling errors and typos; grammatical errors should not detract from the message. The third tip for effective writing is to write appropriately for your readers. Your writing should be suitable for readers in several ways: It should be written on a level they understand and find meaningful, and it should anticipate and answer their questions. The fourth tip is conciseness. Say what needs to be said in as few words as possible. To keep your writing concise, avoid digressions, unnecessary repetition, and wordiness. Clarity is the next tip. Write as simply as possible, using words and phrases with which the reader is familiar. To improve the clarity of your writing, choose words that mean precisely what you intend so that your sentences convey only one meaning: the meaning you want to convey. Well-structured sentences also contribute to clear writing. Coherence is the logical, orderly relationship of ideas. Coherent writing is, simply, writing that is well organized. The flow of thought is easy to follow, and important ideas stand out. To write coherently, you must carefully think through the ideas you want to convey. The ideas must be arranged logically and then written in a way readers can comprehend. Coherence is the sixth tip for effective writers. The final tip is to revise your writing so that it is polished and professional. Documents should look attractive and be free of grammatical and mechanical errors. 6 PART 1 Communication Strategies EFFECTIVE WRITING: AN EXAMPLE You will find many examples of the kinds of documents accountants write throughout this text. One such document is the narrative description of an accounting information system (AIS). Figure 1–3 is an example of such a narrative description, in this case the payroll processing system of a hypothetical company, S&S, a small retail business owned by Scott and Susan. This description illustrates many of the characteristics of effective writing introduced here and explained more fully in later chapters of this text. If you read the description, you will notice that it is organized logically, following the steps of the payroll process, so that the narrative is coherent. That is, readers will be able to understand how this system functions. Paragraphs are short and easy to follow. Sentences are clear and concise. The language is correct—written following the conventions of Standard English. The document is also written at a level appropriate to the readers, whom we assume to be the owners, managers, and other professionals who work with the payroll system at S&S. YOU CAN BECOME A GOOD WRITER With all this talk about the importance of good writing to a successful career in accounting, you may feel overwhelmed or discouraged. Many people believe that they can never become good writers. A word of encouragement is in order. Virtually anyone who succeeds in college work has the education and the skills to become at least an adequate writer, and probably even a good one. Problems with writing are often the result of two factors, both of which can be corrected: lack of adequate training in writing skills, and lack of self-confidence. Let’s address the latter problem—the poor image some people have of themselves as writers. One reason to be optimistic about your writing ability is that you’ve already learned quite a bit about how to write from English courses and other writing classes, as well as from personal experience. Most people are better writers than they realize. They have the potential to become even more effective after they’ve mastered a few strategies such as the ones we’ll cover in this text. As you read this text, note the techniques and principles you already use in your writing. Don’t lose sight of your strengths while you work to improve the areas that could be better. Another reason you should be able to write well as an accountant is that you will be writing about topics you understand and find interesting. If you have had unpleasant experiences with writing in courses other than accounting, the problem may have been that you were writing about topics you weren’t particularly interested in or didn’t CHAPTER 1 Accountants as Communicators 7 FIGURE 1–3 Narrative Description of Payroll Processing at S&S12 When employees are hired, they complete a new-employee form. When a change to an employee’s payroll status occurs, such as a raise or a change in the number of exemptions, the human resources department completes an employee change form. A copy of these forms is sent to payroll. These forms are used to create or update the records in the employee/payroll file and are then stored in the file. Employee records are stored alphabetically. Some S&S employees are paid a salary, but most are hourly workers who record their time on time cards. At the end of each pay period, department managers send the time cards to the payroll department. The payroll clerk uses the time card data, data from the employee file (such as pay rate and annual salary), and the appropriate tax tables to prepare a two-part check for each employee. The clerk also prepares a two-part payroll register showing gross pay, deductions, and net pay for each employee. The clerk updates the employee file to reflect each employee’s current earnings. The original copy of the employee paychecks is forwarded to Susan. The payroll register is forwarded to the accounts payable clerk. The time cards and the duplicate copies of the payroll register and paychecks are stored by date in the payroll file. Every pay period, the payroll clerk uses the data in the employee/ payroll file to prepare a payroll summary report for Susan so that she can control and monitor labor expenses. This report is forwarded to Susan, with the original copies of the employee paychecks. Every month, the payroll clerk uses the data in the employee/payroll file to prepare a two-part tax report. The original is forwarded to the accounts payable clerk, and the duplicate is added to the tax records in the payroll file. The accounts payable clerk uses the tax report to prepare a two-part check for taxes and a two-part cash disbursements voucher. The tax report and the original copy of each document are forwarded to Susan. The duplicates are stored by date in the accounts payable file. The accounts payable clerk uses the payroll register to prepare a twopart check for the total amount of the employee payroll and a two-part disbursements voucher. The original copy of each document is forwarded to Susan, and the payroll register and the duplicates are stored by date in the accounts payable file. Susan reviews each packet of information she receives, approves it, and signs the checks. She forwards the cash disbursements vouchers to Ashton, the tax reports and payments to the appropriate governmental agency, the payroll check to the bank, and the employee checks to the employees. She files the payroll report chronologically. Ashton uses the payroll tax and the payroll check cash disbursement vouchers to update the general ledger. He then cancels the journal voucher by marking it “posted” and files it numerically. feel qualified to discuss. When you write about subjects you like and understand, it’s much easier to write clearly and persuasively. Finally, you may find it much easier to do the kind of writing recommended in this text because it is simple, direct writing. Some 8 PART 1 Communication Strategies people believe that they must write in long, complicated sentences filled with difficult, “impressive” vocabulary. In fact, just the opposite is true: Effective business writing is written as simply as possible. It is therefore easier to do. WRITING AND OTHER FORMS OF COMMUNICATION Writing is only one of several forms of communication, along with such skills as reading, listening, speaking, and interpersonal communication. In fact, all these forms of communication work together to determine how well a person gives and receives information. Let’s look at how reading, listening, and speaking skills can help you improve your writing. Reading Reading affects writing in several ways. Often you will write a memo or letter in response to a written communication from someone else. In public practice, for example, you might write a letter to clients to answer questions they have posed in a letter to your firm. The ability to read the earlier correspondence carefully is essential to an effective response. Careful reading is also important when you research accounting literature as background for the documents you write. The tax code, government regulations, financial accounting standards, articles in professional journals, and The Wall Street Journal are examples of the material you must read to stay informed on accounting issues and procedures. You will need to understand this material and be able to apply it to particular situations. You will also read information circulated and stored within your own firm or company, such as client files and memos or emails from colleagues. Reading this material carefully will provide many of the insights and facts you need to deal effectively with situations for which you are responsible. Thus, careful reading, with an understanding of important ideas and key facts, can contribute to effective writing. Listening Along with reading, the ability to listen carefully determines how well you receive information from others. On the job, you interact with colleagues, supervisors, subordinates, or clients; at school, you interact with professors and other students. Listening carefully to these people provides important information you can use as the basis of your writing. Listening gives you facts about projects you are working on, along with insights into other people’s expectations and concerns. In many situations, listening skills contribute to effective writing. Instructions given by the professor in class, interviews with clients, CHAPTER 1 Accountants as Communicators 9 requests from supervisors, and phone conversations with colleagues are a few examples. In all these situations, attentive listening is necessary to hear what people are saying. It’s often a good idea to take notes and, when necessary, ask questions for clarification or additional information. Careful listening to what others say is often a key ingredient in effective writing. By listening carefully, you learn much about what others know about a situation, what their concerns are, and what they expect from you. Speaking Oral communication is one of the soft skills we mentioned earlier as important to success in the accounting profession. Writing and speaking will often overlap in your professional activities. Informally, you may have meetings and conversations to discuss reports or memos you’ve written. You may use what you’ve written as the basis for formal oral presentations before a group. You might make a presentation to a board of directors, senior managers, or members of a professional organization. WRITING AND PROBLEM SOLVING The nation’s largest public accounting firms are unanimous in calling for improved communication skills for those entering the profession. These firms also identify problem-solving skills as essential to successful accounting practice: Individuals seeking to be successful in the diverse world of public accounting must be able to use creative problem-solving skills in a consultative process. They must be able to solve diverse and unstructured problems in unfamiliar settings. They must be able to comprehend an unfocused set of facts; identify and, if possible, anticipate problems; and find acceptable solutions.13 Problem solving requires many skills, such as identifying key issues, researching relevant literature, and thinking critically and analytically. At each step of the problem-solving process, writing can help you reach sound conclusions. You can generate ideas on a topic by writing down what you know about that topic, as well as what you have yet to find out. The act of writing about a subject can actually help you clarify your thinking. As one wit put it, “How do I know what I think until I see what I say?” There’s more truth in this quip than might at first be apparent. Research into how people think and learn has shown that writers often generate ideas and improve their insights into a subject as they write down their thoughts. 10 PART 1 Communication Strategies Writing can help you solve problems in other ways as well. For example, as you research accounting literature, you take notes. You might also write requests to other people for additional information you need to solve the problem. Writing that you use to solve problems and make decisions is writing for yourself. After the problems have been solved, or at least clearly defined, you can put your insights and conclusions into writing that will help you and others make decisions. Writing, problem solving, and decision making are often inseparable, interactive processes that are essential to the practice of accounting. WRITING AND CRITICAL THINKING We’ve seen that problem solving and decision making, like writing and other forms of communication, are significant parts of an accountant’s job. But before you can solve a problem or make a decision, you need to think carefully and critically about the issues at hand. What is critical thinking? It can be defined as fair, open-minded thinking that asks appropriate questions and considers all relevant information before reaching a conclusion. A critical thinker considers a situation from multiple points of view and evaluates the pros and cons of an argument before reaching a conclusion. Critical thinkers are careful to avoid errors, or fallacies, in their thinking and analyses. Chapter 7 discusses the critical thinking process in more detail. Critical thinking and effective writing go hand in hand: As you take notes and write down your ideas about an accounting problem, the issues and alternative solutions will become clearer. This critical thinking becomes important as you prepare to write the final document. COMMUNICATIONS AND ETHICS Accounting communication, including writing, may involve ethical considerations as well as critical thinking and problem solving. In fact, these three processes—analyzing ethical and other accounting issues, thinking critically, and solving problems—are often essential components of effective communication. Ethics may be defined broadly as the standards we use to determine what is right and wrong—a set of moral principles or values that govern how we act. We learn these ethical principles in a variety of ways, from our families, religious communities, schools, or in general from the society of which we are a part. Professional people, including accountants, also acquire ethical standards as part of their professional training. Accountants must adhere to very high ethical standards as they perform their professional responsibilities. CPAs must follow reporting CHAPTER 1 Accountants as Communicators 11 rules established by the SEC and other governmental agencies, and they must adhere to ethical standards established by nongovernmental entities such as the Financial Accounting Standards Board (FASB) and the AICPA. In fact, the AICPA’s Code of Professional Ethics is a major source of ethical standards for all accounting professionals, not just CPAs. Management accountants also adhere to ethical requirements established by the IMA, as well as by federal, state, and local laws. Individual firms and corporations may also have ethical codes for their employees. Legal requirements and codes of professional conduct provide standards of ethical behavior for accountants as they perform their professional responsibilities. Yet these laws and codes alone may not always provide enough guidance for specific ethical dilemmas. Accountants sometimes face situations for which ready-made answers are not available. When you are faced with such a dilemma, you will need to think critically about the issues in light of your own personal ethical standards in order to make an ethical decision. Remember, too, that there may be a gap between what is legal and what is ethical. For many years, discrimination against ethnic minorities and women was legal in this country, but such discrimination was never ethical. Ethical considerations often affect the way we communicate in a professional situation, whether orally or in writing. Remember that accounting is a process of measuring and reporting financial information. Ethical issues can relate to what we say and how we say it. The AICPA’s Code of Professional Ethics requires that its members report all the information needed for a user of the information to make a reasonable decision; the Code also requires that financial data not be misrepresented. Thus, information must be reported in an honest, reasonably complete manner. Moreover, the information must be communicated clearly so that users can understand it. Accuracy, clarity, and completeness are all qualities of the ethical communication of accounting information. Ethics also affects the attitude with which we regard other people, whether the public at large, our clients, or colleagues and co-workers. An important principle here is that other people deserve to be treated with courtesy and respect. Later chapters discuss such ethical considerations as writing with a courteous tone, the respectful use of titles and pronouns, and the need to write clear and concise documents so that readers can find the information they need as quickly as possible. We will also discuss analyzing readers’ interests and needs as an essential step in the writing process. Finally, sections of this text that discuss critical thinking and accounting research show how to analyze ethical dilemmas. You will learn how to decide what information to provide, and how to provide it in a way that not only adheres to professional and legal standards, but also shows respect for the people who will use the information. 12 PART 1 Communication Strategies CONCLUSION To be a successful accountant, you must master many skills. You must understand and be able to apply accounting principles, of course, but you must also be able to think critically and ethically and to communicate effectively. A competent, ethical accountant who is also a critical thinker and an effective communicator usually is rewarded with professional success. EXERCISES Exercise 1–1 [General] Consider the writing you find in one or two articles in The Wall Street Journal or the business section of another major newspaper or magazine. How effective, or ineffective, do you find the writing? If you have trouble reading or understanding what you read, is the problem due to ineffective writing? If you find the material understandable and interesting to read, what qualities of the writing contribute to this effectiveness? You might consider the Tips for Effective Writing in Figure 1–2 as the basis of your evaluation. Exercise 1–2 [Financial] Look at some published corporate SEC Forms 10-K or annual reports for the most recent year and evaluate the financial statement disclosures they contain. Find examples of disclosures that are not written as clearly or concisely as they could be and rewrite them to be more clear and concise. Share your results with the class and discuss them. (Hint: You can access many 10-Ks and annual reports on the Internet by following the links to listed companies at the New York Stock Exchange (NYSE) Web site at https://nyse.nyx.com.) Exercise 1–3 [General] Prepare a written report on why the SEC is so concerned that corporations use “plain English” in their filings and what it is doing about the issue. Among the materials you consult, be sure to look at the following SEC publications, but do not limit your sources to just these: • A Plain English Handbook: How to Create Clear SEC Disclosure Documents at www.sec.gov/news/extra/handbook.htm • Updated Staff Legal Bulletin No. 7 at www.sec.gov/interps/legal/ cfslb7a.htm • Plain English Disclosure Final Rules at www.sec.gov/rules/ final/33-7497.txt CHAPTER 1 Accountants as Communicators 13 Exercise 1–4 [General] Research the topic of “soft skills” and prepare an article for your school’s newspaper on their definition and importance in the accounting and business world. Exercise 1–5 [Ethics] Do you believe ethical considerations are an important part of an accountant’s professional responsibilities? Why or why not? Think about this question, and then write notes according to the following outline. Use only the sections of the outline that are relevant to your position on this issue. 1. Ethical considerations are important to accountants because: (list your reasons) 2. Ethical considerations are not very important to accountants because: (list your reasons) 3. Accountants find guidance in making ethical decisions from the following sources: (list the sources you find) Exercise 1–6 [Managerial] Management Accounting Quarterly (MAQ) contains articles related to managerial accounting. Search a few recent editions to find an article that may interest you. Critique the writing using each of the Tips for Effective Writing in Figure 1–2. How effective or ineffective do you find the writing? Does the writing style contribute to your understanding of the article? Why or why not? (You can access MAQ on line at http://www.imanet.org/resources_and_publications/management_ accounting_quarterly.aspx. Access is on a subscription basis, so you may have to gain access through your school’s library.) Exercise 1–7 [Auditing] AccountingWEB (www.accountingweb.com) contains articles related to many areas in accounting including auditing. Search AccountingWEB to find an auditing article that may interest you. Critique the writing using each of the Tips for Effective Writing in Figure 1–2. How effective or ineffective do you find the writing? Does the writing style contribute to your understanding of the article? Why or why not? Exercise 1–8 [Systems] Smart Brief (www.smartbrief.com/industry/accounting) is a source for newsletters that publish articles on various topics. One of these newsletters is InfoTech Update, which addresses topics relating to information technology in accounting. Search InfoTech Update on Smart Brief to 14 PART 1 Communication Strategies find an information technology article that may interest you. Critique the writing using each of the Tips for Effective Writing in Figure 1–2. How effective or ineffective do you find the writing? Does the writing style contribute to your understanding of the article? Why or why not? Exercise 1–9 [Tax] Journal of Accountancy (published by the American Institute of Certified Public Accountants) and The CPA Journal (published by the New York State Society of CPAs) publish articles on many topics of interest to practicing accountants. Search these publications to find an article on tax that may interest you. Critique the writing using each of the Tips for Effective Writing in Figure 1–2. How effective or ineffective do you find the writing? Does the writing style contribute to your understanding of the article? Why or why not? Exercise 1–10 [International] The International Journal of Accounting, published by the University of Illinois, contains articles explaining international accounting practices. Search this publication to find an article on international accounting that may interest you. Critique the writing using each of the Tips for Effective Writing in Figure 1–2. How effective or ineffective do you find the writing? Does the writing style contribute to your understanding of the article? Why or why not? Exercise 1–11 [General] The chair of the accounting department at your school has asked you to address beginning accounting students at an orientation session. The topic of your presentation is to be “A Competitive Edge: The Importance of Writing Skills for Accountants.” Your purpose is to convince the students to take the need for good writing skills seriously. Write an outline you can use as a basis for your presentation. As steps in preparing your outline, follow these guidelines: • Analyze your audience for this presentation. How will you present your topic so that they find it meaningful and interesting? • Think critically about the objections your audience might raise to your arguments. How will you respond to their objections? • What material will you include in your presentation? Remember to anticipate your audience’s objections, and the way you will respond. Also remember to arrange your ideas in a logical order. • Using the guidelines found in Chapter 16—Oral Communication: Listening and Speaking, practice and present your talk. Your instructor may ask you to make your presentation in class. As an alternative, you may ask a few friends to listen to your presentation. CHAPTER 1 Accountants as Communicators 15 Exercise 1–12 [General] Assume that the talk you presented for Exercise 1–11 was very successful. In fact, the chair of your accounting department has asked you to write an article based on your talk for the departmental website, which is available to all accounting majors. Using the guidelines given in Chapter 15—Writing for Publication, write the article. Exercise 1–13 [Current Professional Issues] The AICPA has listed fraud control as an emerging professional issue. Read what the institute has to say about “Managing the Business Risk of Fraud” at http://www.acfe.com/uploadedFiles/ ACFE_Website/Content/documents/managing-business-risk.pdf . Critique the writing using each of the Tips for Effective Writing in Figure 1–2. How effective or ineffective do you find the writing? Does the writing style contribute to your understanding of the article? Why or why not? NOTES 1. This is true not only in accounting but also in almost any business occupation including the areas of finance, marketing, and consulting. As pointed out in an article in Business Week, even new employees in these areas may have to prepare long reports or presentations as well as shorter forms of writing on the job. See Julie Gordon, “Memo to Students: Writing Skills Matter,” Business Week, 26 April 2006. http://www.businessweek.com/ stories/2006-04-25/memo-to-studentswriting-skills-matter (9 April 2013). 2. Don Pfluger of CPA and business advisory firm Gallina as quoted in Bill Carlino, “The new breed of auditors,” accountingTODAY, 1 May 2012. http://www.accountingtoday. com/ato_issues/26_5/AuditorLandes-AICPA-Enron-Worldcomaudit-62448-1.html (9 April 2013). 3. International Accounting Education Standards Board (IAESB), IES 3: Professional Skills and General Education. (New York: IAESB, 2004), pars. 13, 17; reprinted in Handbook of International Education Pronouncements 2010 Edition. (New York, IAESB, 2010), 48–49. 4. American Institute of Certified Public Accountants, Invitation to Comment, AICPA Competency Model for the New Finance Professional. (New York: AICPA, 7 October 1997), 5. 5. William Cordes, Director of Exam Administration for the IMA, personal email (15 May 2013). 6. The Business Environment and Concepts (BEC) section of the exam contains three written communications tasks. See “A Guide to CBT-e: The New 2011 Uniform CPA Examination,” https://www.aicpa. org/BecomeACPA/CPAExam/ ForCandidates/HowToPrepare/ DownloadableDocuments/ New_2011_CPA_exam_guide_to_ CBTe.pdf (9 April 2013). 16 PART 1 Communication Strategies 7. The exam contains two 30-minute essay questions on each of the two parts of the exam. See “Become a CMA®,” www.imanet.org/cma_ certification/become_a_cma.aspx (10 May 2013). 8. The Wall Street Journal, 16 July 1986, “Words Count,” 1. 9. Alan A. Cherry and Lucy A. Wilson, “A Study of the Writing Skills of Accounting Majors in California” (unpublished study, 1987). 10. In a 2006 survey of its members in government conducted by the AICPA, 80% of respondents indicated written and oral communication skills were essential. See “AICPA Survey—Phase II: Government Members Foresee ‘Brain Drain’ in the Government Workforce,” Government E-News, American Institute of Certified Public Accountants, 17 May 2006. http://fmcenter.aicpa.org/NR/ rdonlyres/FA53AA12-25AF4BCC-A25E-4281FCC56DBB/0/ GPAC_NEWS_15.pdf (21 May 2007). 11. “Plain English Disclosure.” Securities and Exchange Commission. Staff Legal Bulletin No. 7(CF). www.sec.gov/interps/ legal/slbcf7.htm (9 April 2013): 1–2. 12. Marshall B. Romney and Paul J. Steinbart, Accounting Information Systems, 12th ed., © 2012, p. 53. Reprinted and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey. 13. Duane R. Kullberg, William L. Gladstone, Peter R. Scanlon, J. Michael Cook, Ray J. Groves, Larry D. Horner, Shaun F. O’Malley, and Edward A. Kangas, Perspectives on Education: Capabilities for Success in the Profession (Big Eight Accounting Firms, 1989), 6. CHAPTER 2 The Writing Process: An Overview E ffective writing, like accounting, is a process. One step in the accounting process is to analyze transactions to determine how to record them. Several questions basic to the accounting system underlie your analysis of financial transactions and their treatment. What is the purpose of the information recorded and ultimately reported? Who are the users of this information, and what are their needs? Do the readers expect this information to be presented in a certain form, such as the typical presentations found in annual reports? How can the information be most fairly and effectively presented? These questions are as important to good writing as they are to good accounting. Planning, which emphasizes both the purpose of the writing and the needs and expectations of the readers, is the first step in the writing process. In this chapter, we discuss the writing process from beginning to end: planning for purpose and audience, including critical thinking about the issues; gathering information; generating and organizing ideas; drafting; revising; and proofreading. (Figure 2–1 summarizes the steps of the writing process.) You will learn how to apply this process to overcome much of the anxiety you may feel about writing, including the problem of writer’s block. Throughout the chapter, we also discuss how computer technology can help you at every stage of the writing process. In the previous chapter, we identified seven tips for effective writing that focus on content, critical thinking, appropriateness for readers, conciseness, clarity, coherence, and revision (see Figure 1–2 in Chapter 1). In this and following chapters, we discuss specific guidelines and techniques that will help you achieve these goals. 17 18 PART 1 FIGURE 2–1 Communication Strategies The Writing Process Plan • Read the assignment or consider the task carefully. • Analyze the purposes of the document. • Identify the accounting issues, including different ways those issues might be addressed. • Analyze the issues from the readers’ point of view. What are their interests, needs, and expectations? • Gather and organize material. Draft • Write down your ideas. • Don’t stop to edit. • Write the parts of the paper in whatever order you want. • Keep your readers in mind as you compose. Revise • Reread the document from the readers’ point of view. Is your treatment of the accounting issues fair, thorough, and persuasive? • Revise the document so that it is clear, coherent, and concise. • Proofread for grammatical, mechanical, and typographical errors. GETTING STARTED: IDENTIFYING PURPOSE One of the first stages in the writing process—analyzing the purpose of the document—is easy to overlook. When you think about purpose, you decide what you want to accomplish with your letter, memo, or other document. Do you want to provide your readers with information about some topic, answer their questions, recommend a course of action, persuade them to do something, or convince them to agree with you on some point? These are just a few of the purposes a document can have. You should think carefully about the purpose before beginning to write. It might be helpful to think of your purpose in terms of three categories: to give information about something, to propose a course of action, or to solve a problem. The purpose of most writing tasks falls into one of these categories, or perhaps a combination of them. As an example, assume you are the controller for Franklin Electrical Supplies. Franklin is considering purchasing stock in SolLite, Inc., one of Franklin’s major suppliers of lighting fixtures. A report on this possible purchase could have any of the following purposes: • To inform management of the advantages (or disadvantages) of the purchase • To recommend that Franklin purchase (or not purchase) the stock • To suggest a way to finance the purchase CHAPTER 2 The Writing Process: An Overview 19 The purpose of the report, or of any writing, determines what material it should contain. Consider another example. Your client, Coastal Development, is faced with a lawsuit that could result in a large loss. You might write a letter to Coastal’s controller about the disclosure requirements for contingent loss liabilities as a result of pending litigation. In such a letter, you would not discuss gain contingencies or loss contingencies from bad debts. You would analyze the specific purpose of the letter to decide what information was relevant for this situation. Another way to think about the purpose of a document is to identify the accounting issues it will address. Sometimes these issues are obvious, but at other times you must analyze the situation carefully before all the issues become apparent. For example, a client might seek your help on the best way to record a transaction to minimize income tax liability. As you analyze the transaction, you might become aware of accounting issues that would never occur to the client, such as the need to record the transaction consistently with generally accepted accounting principles (GAAP). You might also become aware of ethical or legal issues that the client had not considered. Identifying the issues can help you define the purposes of the document you are writing, because one purpose might be to explain the accounting issues in a way your reader can understand. After you have analyzed your purposes carefully, you should write them down. Be as specific as possible and try to define the purposes in a sentence. This sentence might later become part of the document’s introduction. When you analyze your purpose, be specific. Remember that you are writing to particular individuals in a particular situation. Relate the purpose of your writing to these people and their concerns. That is, state the purpose in the context of this specific situation rather than in broad, general terms. In the Franklin Electrical Supplies example, suppose you were writing a report on how to finance the purchase of SolLite, Inc., stock. You would limit your discussion to the financing alternatives available to Franklin that are practical for the company to consider. Sometimes, to determine the purpose of a document, you need to read previous correspondence on the subject, such as a letter or email from a client. Be sure to read this correspondence carefully, noting important information and questions you’ve been asked to address. You may also receive an oral request to write something, perhaps from your supervisor. If you receive such a request to write, listen carefully to the directions. If the purpose of the document is not clear, ask questions until you’re sure what the document should include. 20 PART 1 Communication Strategies THINKING CRITICALLY ABOUT THE ISSUES If the purpose for your writing involves analyzing complex accounting issues, think carefully about your topic as you plan your document, gather information, and write. Sometimes the issues are complex: A problem might have more than one reasonable solution, and some people might disagree with the course of action you recommend. As you plan your writing, keep alternative points of view in mind. Consider not only the reasons for your own opinion, but also the reasons other people might have a different view. How will you support your opinion, and how will you respond to the arguments of people who disagree with you? Critical thinking about the issues throughout the writing process helps ensure that the document you write is persuasive. Your readers will regard you as knowledgeable and fair, and they will take seriously what you write. (Chapter 7 discusses critical thinking in more detail.) ANALYZING THE READERS When you are planning a writing task, it is important to consider who the readers will be. A memo on a highly technical accounting topic might be written one way for an accounting colleague, but another way for a client or manager with only limited knowledge of accounting procedures and terminology. Effective writers analyze the needs and expectations of their readers before they begin to write. In writing a letter or memo, you will probably be writing to a limited number of people, perhaps to only one person. You also know, or can find out, important information about the reader or readers. Again, you must ask certain questions: How much do the readers know about the subject being discussed? What else do they need to know? Have they already formed opinions on the accounting issues? The answers to these questions, and perhaps others, will suggest the level at which you will write, including the terms and procedures you will explain, the background you will provide, and the arguments you will make. Accountants who deal with the public should be particularly careful in analyzing the needs of their readers. A tax specialist, for example, might have clients with widely varying experience and knowledge of tax terminology. A corporate executive would probably understand such concepts as depreciation and accruals, but a small shopkeeper might not be familiar with this terminology. Business letters to these two clients, even on the same topic, should be written differently. Consider the readers’ attitudes and biases. Are your readers likely to be neutral to your recommendations, or will they need to be convinced? The critical thinking about the issues you have already done CHAPTER 2 The Writing Process: An Overview 21 will help you write to your readers in a convincing way. Remember your readers’ interests and concerns as you write. How will they benefit, directly or indirectly, from what you propose? How can you present your arguments to overcome their objections and biases? To answer this last question, you must anticipate readers’ questions, research the issues, and then organize your arguments into a convincing sequence. Other important considerations when analyzing your readers’ needs and expectations are tone and style. What are their attitudes and biases? Some readers react well to an informal, friendly style of writing, but other readers believe that professional writing should be more formal. Whoever your readers are, remember always to be courteous. Whether you write in a technical or conversational style, all readers appreciate (and deserve) consideration, tact, and respect. Treating your readers with courtesy and respect will help ensure that your writing is ethical, as well as effective. Word choices also contribute to an effective and responsible writing style. For example, many readers might find the following sentence troubling: A successful CEO will treat his subordinates with respect. Some readers might argue that the choice of pronouns (CEO/his) implies a gender bias. Use plural nouns and pronouns so that your language will be more inclusive: Successful CEOs will treat their subordinates with respect. Sometimes your readers will have additional expectations about your documents. In a classroom situation, the instructor usually gives directions about different aspects of your papers, such as format and due date. The instructor expects you to follow these directions. How well you do so usually affects your grade. Readers’ expectations are also important when you write on the job. Managers in some firms expect in-house memos and reports to follow certain conventions of format, organization, and style. If you work for such a firm, your memos and reports will seem more professional— and be more effective—if they are consistent with these expectations. In fact, meeting readers’ expectations might actually be a matter of company policy. Policies often govern how certain documents are written and what procedures they must go through for approval. Many professional services firms do not let new staff members send letters to clients unless a manager or partner first approves them. If you were a new staff member in such a firm, you might draft the client letter, but a manager or partner would review it and possibly ask you to make revisions. Moreover, for certain documents, such as some engagement letters and auditing reports, the actual language used in the letter might be determined by company policy. The partner will expect you to follow these policies with great care. 22 PART 1 FIGURE 2–2 Communication Strategies Planning a Paper Consider these questions as you plan the documents you write: 1. Answer after you read and analyze the assignment or consider the task: • • • • • • • What are the accounting issues in this case? Are there ethical issues I should consider? What literature will I research to resolve these issues? Who will read this document? What different opinions might readers have about the issues? What are the readers’ concerns? What are the purposes of this document? 2. Answer after you research and analyze the case: • What are the main points (conclusions) I need to make in this document? • What material should I include to make these conclusions clear and meaningful to the reader(s)? • How will I support my conclusions and respond to readers’ objections? In the example of the client letter just discussed, there are actually two or three readers: the manager and/or partner who reviews and approves the letter, and the client who receives it. This letter should be written on a technical level that is appropriate for the client, and it should address the client’s concerns, but it should also meet the expectations of the manager and partner. Analyzing readers’ needs, interests, and expectations is obviously more complex when there are several readers. Think carefully about the different readers and use your best judgment to meet the expectations of them all. Analyzing readers’ needs, expectations, and opinions is an important part of the preparation for writing. Planning, during which you think carefully about both your audience and your purpose, is the first guideline for effective writing. We’ll add more to this list throughout the chapter. 1. Analyze the purpose of the writing, the accounting issues involved, and the needs and expectations of the readers. Figure 2–2 summarizes questions you can ask yourself to help plan your writing. GETTING YOUR IDEAS TOGETHER After you have evaluated the purpose of the writing and the needs of the readers, you are ready for the second stage in the writing process: gathering information and organizing the ideas you want to present. This step might be quick and simple. For a short letter, you may not CHAPTER 2 The Writing Process: An Overview 23 need to do further research; organizing your ideas may involve only a short list of the main topics you want to include in the letter—perhaps one topic for each paragraph. For much of the writing you do, gathering information and organizing might be a more complicated process that involves much thought and perhaps some research as well. Let’s look at some techniques you can use. Gathering Information Before you begin to write the document, be sure you have complete, accurate information. You can check the work that has already been done and then locate new information you’ll need. For many projects, some information might already be available. If you’re working on an audit, for example, information might be available from other members of the audit team as well as from the files from the previous years’ audits. Explore these sources of information fully. Review the files carefully and, when necessary, talk with the people who have already worked on the project. Sometimes you might need to do additional research. This task can involve background reading on a technical topic or a careful review of professional standards or law, such as Financial Accounting Standards Board (FASB) publications, the tax code, IRS publications, or SEC publications. As you read this material, take notes carefully and be alert for information that might be helpful when you write. Remember also that accounting issues often have more than one possible solution. As you research, look for material that supports more than one point of view. This research may require you to interview people who will be affected by the project that you are working on. Suppose you intend to propose in a report a new accounting information system for your company. You can gain important insights into topics your report should cover by talking with the people who would be affected by the proposed system. You can learn what they want the system to accomplish, what they might need to know about it, and whether they have already formed opinions that should be considered when you write your report. Generating Ideas After you have gathered the information you need, you are ready to begin the next phase of the writing process: deciding exactly what to say. If you have not already written your statement of purpose, now is the time to do so. Try to break up the purpose into several subtopics. Suppose the purpose of a client letter is to recommend that the client company update its accounting system. The statement of purpose for this letter could specify the different accounting jobs for which the 24 PART 1 Communication Strategies expanded system would be useful, outline its major advantages, and respond to questions and objections the client might have. Another useful technique for generating ideas is brainstorming. With this technique, you think about your topic and write down all your ideas, in whatever order they come to you. Don’t worry about organizing the ideas or evaluating them; later, you can consider how these ideas fit into the outline you developed when you analyzed the purposes of the document. Brainstorming is often easier to do at the computer. As you type in the keywords and phrases that occur to you, the phrases might start to become sentences and the sentences might flow together to become paragraphs. You may find that the faster you record your ideas, the more freely the ideas flow. Thus, using a computer can be valuable when you need to generate ideas quickly. Arranging Ideas: Organization After you’ve decided what you want to say, it’s important to consider how best to arrange these ideas so that the readers will find them easy to follow. In other words, it’s time to think about how the document will be organized. Much of the work you’ve already done will help you decide on the best pattern of organization. You may be able to use your statement of purpose as the basis of your organization, or your paper may be structured so that the readers’ major concerns are your principle of organization—that is, each concern might be a major division of your paper. Some documents can be organized according to the accounting issues they address. When considering all these approaches to organization, and possibly deciding among them, remember this principle: The needs and interests of your readers should determine the document’s organization. Arrange your ideas in the order that they will find most helpful and easiest to follow. Anticipate when your readers are likely to raise objections or ask questions, and respond to those needs when they are likely to occur. There are a few other points of organization to consider. First, most writing has the same basic structure: an introduction, a concise summary of important ideas, development of the main ideas, and a conclusion. This structure is shown in Figure 2–3. In later chapters of this handbook, we will discuss more fully this basic structure as it is used for particular kinds of writing. Another point is that ideas should be arranged in a logical order. To describe how to reconcile a bank statement, for instance, you would discuss each step of the procedure in the order in which it is performed. Finally, you can often organize ideas according to their importance. In business writing, always arrange ideas from the most to the CHAPTER 2 FIGURE 2–3 The Writing Process: An Overview 25 Basic Writing Structure • Introduction: identifies the subject of the document and tells why it was written. Sometimes the introduction also provides background information about the topic or stresses its importance. You may also use the introduction to build rapport with your reader, perhaps by mentioning a common interest or concern or referring to previous communication on the topic. • Concise statement of the main ideas: summarizes explicitly main ideas, conclusions, or recommendations. This part of a document may be part of the introduction or a separate section. It can be as short as a one-sentence purpose statement or as long as a three-page executive summary. • Development of the main ideas: Includes explanations, examples, analyses, steps, reasons, arguments, and factual details. This part of an outline or paper is often called the body. • Conclusion: Brings the paper to an effective close. The conclusion may restate the main idea in a fresh way, suggest further work, or summarize recommendations, but an effective conclusion avoids unnecessary repetition. least important. Note that this principle means you start with the ideas that are most important to the reader. Suppose you are writing a report to recommend that your firm purchase new software for maintaining its accounting records. Naturally, you will want to emphasize the advantages of this purchase, describing them in the order that is likely to be most convincing to the readers. However, this investment might also have drawbacks, such as the problems involved in converting from the old system to the new one. For your report to appear well researched and unbiased, you need to include these disadvantages in your discussion. You might use the following structure: I. Introduction, including your recommendation II. Body A. Advantages, beginning with those most appealing to the readers B. Disadvantages, including, when possible, ways to minimize or overcome any drawbacks III. Conclusion One final word about organization: After you’ve decided how to arrange your ideas, it’s a good idea to write an outline, if you haven’t already done so. Having an outline in hand as you draft your paper will help you keep the paper on track. That way, you’ll be sure to include all the information you had planned and avoid getting off the subject. 26 PART 1 Communication Strategies The guidelines for effective writing can now be expanded: 1. Analyze the purpose of the writing, the accounting issues involved, and the needs and expectations of the readers. 2. Organize your ideas so that readers will find them easy to follow. WRITING THE DRAFT The next major step in the writing process is writing the draft. The purpose of this step is to put your ideas in writing. Most writers find that they can write a first draft more easily if they don’t try to edit at this stage. Spelling, punctuation, and style are thus not important in the draft. What is important is to write the ideas so that you can later polish and correct what you have written. If you did your brainstorming at the computer, you may already have parts of your draft if the list of ideas you began with evolved into sentences or paragraphs as you typed. The outline you have prepared will guide you as you write. However, you may decide to change the outline as you go, omitting some parts that no longer seem to fit or adding other ideas that seem necessary. Feel free to change the outline as you write; when you revise the draft later, you can make sure your thoughts are still well organized. Although you will use your outline as a guide to the ideas you want to include in your draft, you might find it easier to write the various parts of the document in a different order from the one used in the outline. Some people find introductions hard to write, so they leave them until last. You may also choose to write the easiest sections of your draft first, or you may start writing some parts of the draft while you are still getting the material together for other parts. One final word of advice on the draft stage: Don’t allow yourself to get stuck while you search for the perfect word, phrase, or sentence. Leave a blank space, or write something that is more or less what you mean. You’ll probably find the right words later. REVISING THE DRAFT The next stage in the writing process is the revision of the draft. In this step, you check your spelling and grammar, polish your style, and make a final check to see that the ideas are effectively and completely presented. As you revise, read the document from the reader’s point of view. You’ll need to revise most of your writing more than once—perhaps three or four times. The key to revising is to let the writing get cold between revisions; a time lapse between readings enables you to read the draft more objectively and see what you have actually said, instead of what you meant to say. Ideally, revisions should be at least a day apart. CHAPTER 2 FIGURE 2–4 The Writing Process: An Overview 27 Examples of Homonyms See (the verb) Bear (the animal) Deer (the animal) Plane (an airplane) Break (to divide into parts) Some (a certain amount) Wood (made from trees) Eye (what we see with) Threw (the verb) Know (the verb) Hour (time) Write (on paper or a computer) Their (the pronoun) Which (the pronoun) Site (location) Way (direction) So (therefore) sea (the body of water) bare (uncovered) dear (a term of address) plain (unadorned) brake (to stop or slow) sum (total) would (the auxiliary verb) I (the pronoun) through (the preposition) no (negative) our (the pronoun) right (correct) there (place) witch (the broom rider) Cite (refer to a source) Weigh (determine weight) Sew (to stitch with thread) Another technique is to have a colleague review the draft for both the content and the effectiveness of the writing. Choose a reviewer who is a good writer and evaluate the reviewer’s suggestions with an open mind. Most word processing software has the ability to check the text for grammar problems and certain errors in style, such as sentences that are too long and paragraphs that use the same word too often. The software may also identify some mistakes in punctuation, as well as most misspelled words. A word of caution about these style analyzers, spell checkers, and grammar checkers—they’re not infallible. They can’t catch all the weaknesses in your text, and sometimes they flag problems that aren’t really there. If you use a computer to analyze your writing, you still must use your own judgment about what changes to make. Homonyms can cause problems with your writing, for example, but spell checkers and grammar checkers may not find this kind of problem. Homonyms are words that sound the same when spoken aloud, but they have different spellings and meanings. Figure 2–4 shows examples of homonyms that spell checkers or grammar checkers may not recognize. Another revision technique is to print the document and edit the hard copy by hand. You can then make the revisions in your computer file later. Some writers find that they revise more effectively if they work with a hard copy rather than text on a screen. The next four chapters of the handbook discuss what to look for when putting your written work in final form. 28 PART 1 Communication Strategies We now have three guidelines for effective writing: 1. Analyze the purpose of the writing, the accounting issues involved, and the needs and expectations of the readers. 2. Organize your ideas so that readers will find them easy to follow. 3. Write the draft and then revise it to make the writing polished and correct. THE FINAL DRAFT After you have polished the style and organization of the paper, you will be ready to put it in final form. Consider questions of document design, such as the use of headings, white space, and other elements of the paper’s appearance. Proofreading is also an important step. Here are some suggestions for effective proofreading: 1. Proofreading is usually more effective if you leave time between typing and looking for errors. You will be able to critique the paper more clearly if you have been away from it for a while. 2. Use your computer’s spell check program to eliminate spelling and typographical errors. Remember that the computer program cannot distinguish between homonyms such as their and there or affect and effect. 3. In addition to your computer’s spell checker, you may also need to use a dictionary to look up any word that could possibly be misspelled, such as words the computer doesn’t recognize, or homonyms it may not have flagged. Check also that you’ve spelled people’s names correctly. If you are a poor speller, have someone else read the paper for spelling errors. 4. If you know that you tend to make a certain type of error, read through your paper at least once to check for that error. For example, if you have problems with subject-verb agreement, check every sentence in your paper to be sure the verbs are correct. 5. Read your paper backwards, sentence by sentence, as a final proofreading step. This technique isolates each sentence and makes it easier to spot errors you may have overlooked in previous readings. DEALING WITH WRITER’S BLOCK Writer’s block is a problem everyone faces at some time or another. We stare at blank paper or at a blank screen with no idea of how to get started. The ideas and the words just don’t come. Many of the techniques already discussed in this chapter will help you overcome writer’s block. Thinking of writing as a process, rather CHAPTER 2 The Writing Process: An Overview 29 than a completed product that appears suddenly in its final form, should help make the job less formidable. Any difficult task seems easier if you break it down into manageable steps. The discussions of the steps in the writing process, especially the section on writing the draft, included suggestions that will help you overcome writer’s block. Here is a summary of these techniques: 1. Plan before you write so that you know what you need to say. 2. Write with an outline in view, but write the paper in any order you want. You can rearrange it later. 3. Don’t strive for perfection in the draft stage. Leave problems of grammar, spelling, style, and so forth to the revision stage. 4. Begin with the easiest sections to write. 5. Don’t get stuck on difficult places. Skip over them and go on to something else. You may find that when you come back to the rough spots later, they are not as hard to write as you thought. WRITING UNDER PRESSURE Throughout this chapter, you’ve seen how writing is easier if you break the project down into steps. It’s easy to manage these steps when you have plenty of time to plan, research, draft, revise, and polish. What about situations in which you don’t have the luxury of time? What about writing essay questions on an exam, or on-the-job writing tasks where you have only a little while to produce a letter or memo? The truth is that any writing project, no matter how hurriedly it must be done, will go more smoothly if you stick with the three basic steps of the writing process: plan, draft, and revise. Even if you have only a few minutes to work on a document, allow yourself some of that time to think about whom you’re writing to, what you need to say, and the best way to organize that material. Then draft the paper. Allow yourself some time to revise as well. Use a spell check program to help locate embarrassing spelling and typographical errors. WRITING AND ELECTRONIC MEDIA Some of the writing you will do as a professional accountant will be for electronic transmission, such as email or other documents that are sent over the Internet. Documents sent electronically should be planned, written, and revised with the same care you would use for hard-copy versions. This may be obvious for formal documents, but even email and instant messaging (IM), which we often send in haste and consider to be extremely informal, requires care in order to be effective. Chapter 12 gives guidance on the use of electronic communication, including advice on the use of email. 30 PART 1 Communication Strategies HELP FROM COLLEAGUES: CRITIQUING Once you have improved your document as much as you can, you may have another source of help: constructive feedback from one or more colleagues. If you are preparing an assignment for a course, this help may come from other students in the class. In a job situation, you might ask a colleague to review your writing. You will, of course, be willing to return the favor to your colleagues if they ask you to critique their writing. Here are some tips for giving helpful critiques: • Reviews of the writing should be both tactful and honest. • Always point out strengths of the writing, and then make a few suggestions if you see ways the writing could be improved. • Make suggestions in positive ways, and be as specific as possible. For example, you wouldn’t say, “I can’t make any sense of this, and your grammar is deplorable!” Rather, you might say, “Can you explain this concept more clearly? Perhaps shorter sentences would help. Also, you might want to check your verbs.” • Ask the writer if you can write your feedback on the paper itself. Then be prepared to discuss what you liked about the paper, as well as ways it could be improved. • For specific guidelines on what to look for in the papers you critique, use Tips for the Effective Writer found in Figure 1–2. If a colleague critiques your writing, here are some things to keep in mind: • Whenever possible, ask people to critique your writing who are themselves good writers. • Keep an open mind, and resist the natural temptation to be defensive. On the other hand, remember that final responsibility for the document is yours; you’ll decide which suggestions to use. Not all advice, however well intended, is helpful. • Thank the reviewers for their help. EXERCISES Exercise 2–1 [General] Analyze the letter in Figure 2–5. How would you react if you received this letter? 1. Think about these questions and then discuss them with your classmates: • What are the strengths of this letter? (It does have some strengths!) • What are the weaknesses of the letter? (Hint: Can you find all the typos and spelling errors? In addition to these problems, CHAPTER 2 FIGURE 2–5 The Writing Process: An Overview 31 Letter for Exercise 2–1: What Is Wrong with This Letter? Wright and Wrongh, CPAs 123 Anystreet Anytown, US 12345 Corner Dress Shop 123 Anyother Street Anytown, US 12345 Gentleman We are in receipt of your correspondence and beg to thank you. After extensive research we have found what we hope will be a satisfactory responce to your questions, we hope you will find our work satisfactory. It is the goal of our firm to alway offer the best, most expert and reliable service possible to all our clients, all of whom are value and with whom we hope to have a lont-term working relationship to our mutual advantage. There were two possibilities for the resolution of this issue that we considered after a careful analyses of the applicable IRC sections to your situation. If the first possibility proved relevant, then you would be subject to a fine of $5500, plus penalties and interest. If athe other possibility was the best solution, then you would receive a $4400 credit because of a loss carryforard to your current year returns. As you no doubt know, IRC Sec.341(6)a [paras. 5-9] stipulate that the regulations we must follow. Thus, to be in compliance with the rules and regs. you must follow the provisions of the pertinent sections. As your CPAs, we are most concerned that we be in complianse with all standards of professional ethics, and we always keep this in mind when we advise you on your tax and accounting questions. We don’t want to go to jail, and we’re sure you don’t either! After extensive research, we advise you to file an ...