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Mastering the FASB Codification and eIFRS: A Case Approach by Thomas R. Weirich, Thomas C. Pearson, Natalie Tatiana Churyk

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CHAPTER 5

Introduction to Research and Case Analysis

The first step in the research process is to read the case, understand the facts, and identify the problem or issue. Facts in short cases are usually rather clear. Real-life facts are often complex, however, even when simplified in cases. Thus, careful reading is a necessity.

The researcher must distinguish conclusions from underlying facts. Consider, for example, the statement that “the potential $500,000 liability from a lawsuit on patent rights was remote.” “Remote” is a term of art in accounting requiring professional judgment before reaching that decision. Thus, the potential $500,000 liability from a lawsuit on patent rights is a fact. However, classifying the liability as remote is a conclusion.

In order to digest all of the facts, it often helps to diagram the parties or events. For any case analysis (be it a “real” case or a simplified case), one should routinely write one or two paragraphs on the facts before starting the research process. Failure to do so may waste valuable time.

The more familiar the researcher is with a client and its business, the better the researcher is able to interact with the client or its corporate management in order to ask insightful, pertinent questions to establish the facts. The researcher must use the client's time efficiently, but effectively. Thus, one may need to spend significant initial time with the client, but one should use discretion as to when to go back to the client for ...

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