PART IV
CHAPTER COMMENTARIES
CHAPTER 1 ACCOUNTANTS AS COMMUNICATORS
Chapter Objectives
The objectives of this chapter are to
• Convince accounting students that communication skills are essential to the
successful practice of accounting.
• Introduce the qualities of effective writing for business: coherence, clarity, and
conciseness.
• Reassure students that they can become good writers.
• Show the interaction between writing, reading, listening, and speaking.
• Show how writing can help with problem solving.
• Introduce critical thinking skills.
• Show how ethical considerations may relate to accounting communication.
Teaching Tips
To reinforce the concepts covered in this chapter, you can
• Invite guest speakers to your class to discuss the importance of communication skills
to an accounting career. Well-established, successful professionals would make
good speakers, as would recent graduates of your school’s accounting program.
• Collect articles and stories that relate the importance of effective communication to
business. Anecdotes that you hear from people in practice, as well as published
information, will emphasize to your students the importance of the communication
skills they will be developing.
Writing is a means of mastering new concepts and defining material that is not yet clearly
understood. To encourage your students to use writing in this way, try these activities:
• After you have assigned a portion of a chapter to your students to study, or after you
have lectured on this material, ask the students to summarize the main ideas
presented in the assigned material They should be able to summarize each main idea
in one or two clear, coherent sentences.
The first few times you assign this activity, have members of the class share what
they have written. If students’ summaries differ significantly, you may be able to
generate a class discussion that will reach a consensus. As an alternative, you might
have the students work on their summaries in groups of three or four students. Then
a spokesperson for the group could present the summary to the class.
This activity will work for assigned material from Effective Writing or material from
another textbook.
• If your students are having trouble understanding the assigned material, ask them to
formulate questions that will pinpoint where they need help. These questions should
force them to analyze the assigned material carefully; the questions will also suggest
what you should emphasize in class.
Troubleshooting
You may encounter these potential problems with the material presented in this chapter:
• Some students may not want to believe that they will personally need good
communication skills. We have heard this argument: fiI don’t have to worry about
how well a document is written; my secretary will take care of that.”
Hearing directly from practitioners of their own need for good communication skills
should help students overcome this misconception.
• Some students may have considerable anxiety about their communication skills that
you will want to help them overcome. Part I of this manual suggests ways to
reassure students about their potential to become effective communicators.
Master To Use With This Chapter
Effective Writing for Accountants Page 95
Answers to Exercises
Exercises 1−1 through 1−13
Self-explanatory⎯answers will vary.
CHAPTER 2 THE WRITING PROCESS: AN OVERVIEW
Chapter Objectives
The objectives of this chapter are to
• Teach the act of writing as a process, rather than a product.
• Show the value of planning a document before writing it, including critical thinking
about the accounting issues.
• Stress the importance of writing that is appropriate for the reader.
• Present several techniques for generating and organizing ideas.
• Stress the importance of revision and proofreading.
• Suggest ways to overcome writing anxiety.
Teaching Tips
To reinforce the concepts covered in this chapter, you can
• Discuss with your class planning considerations for the papers you assign. After they
have had a chance to study an assignment, you can lead them in a discussion of the
paper’s purpose and the needs and interests of the reader. You can also lead a
discussion of how to think critically about the accounting issues.
• Demonstrate in class how brainstorming works. Suggest a topic, and then write the
students’ ideas on the board or an overhead transparency. Then show them how to
evaluate the ideas generated and group them into a workable outline.
• Encourage your students to allow sufficient time for the writing process. Ask to see
their working drafts several days before the final papers are due.
• Use peer reviews of the students’ papers to foster students’ editing and revision skills.
• Give students opportunities to write within a time constraint to help them cope with
writing under pressure. Discussion questions on an exam provide excellent
opportunities for them to practice. (Chapters 3 and 13 of Effective Writing discuss
how to organize the answers to essay questions on both academic and professional
exams.)
Troubleshooting
You may encounter these potential problems with the material presented in this chapter:
• The concept of reader analysis will likely be a novel idea for many students unless
they have had previous courses in business communication or technical writing.
Discuss with the students the importance of targeting the document to the reader. For
a given assignment, you can ask them to consider the reader’s concerns, needs,
expectations, technical knowledge of the topic, and familiarity with the situation of
the case.
• Some students may not realize the importance of considering accounting issues from
different points of view. They may believe that in order to be persuasive they should
ignore possible solutions to accounting problems that differ from the solution they
recommended.
You can remind them that they will gain credibility if they show that they have
considered the pros and cons of different solutions.
• Some students resist budgeting enough time for the writing process; they leave the
paper until the night before it’s due.
If you check for working drafts several days before the papers are due, students will
be forced to work on them early.
• A related problem is students’ reluctance to devote enough time to proofreading and
revision.
They will realize the value of careful revision and proofreading if you hold them
accountable for the quality of their final drafts.
• The peer reviews can cause several potential problems:
1. The draft given to the reviewer doesn’t represent the writer’s best effort;
instead, it’s a rush job just to meet the requirements of the assignment.
Discuss with the students how they can benefit from the peer review if they
give the reviewer a draft that represents their best work.
2. Reviewers are reluctant to give honest criticism.
Emphasize how an honest critique can help the writer submit a better paper
(and get a higher grade).
3. Writers are defensive about the criticism they receive.
Remind the writers that they make the final decisions about their own papers;
however, an open mind about the suggestions may lead to a better paper.
Masters to Use with This Chapter
These masters will provide useful handouts or slides for teaching this chapter:
Effective Writing for Accountants Page 95
The Writing Process Page 96
Planning a Paper Page 97
Audience Analysis Page 98
Peer Review Process Pages 109-113
Answers to Exercises
Exercise 2−1
1. Strengths:
• Refers to previous correspondence
• Proposes a specific solution to the problem
Weaknesses (in addition to obvious spelling typos and grammatical errors) include these:
• Lack of a date, specific name for correspondent
• Paragraph 1: Wordy; clichés
• Paragraph 2: Wordy; should specify main idea of letter; no need for apology.
• Paragraph 3: Inconsistencies of verb tenses, incoherent
• Paragraph 4: Obscure (inappropriate for audience)
• Paragraph 5: Self-important, irrelevant
• Paragraph 6: Incoherent. Recommendation should have
appeared near the beginning of the letter.
• Paragraph 7: Out-of-date convention. Eliminate this paragraph.
2. A more effective version of the letter appears on the next page:
Wright and Wrongh, Investment Counselors
123 Anystreet
Anytown, US 12345
November 10, 2014
Ms. Georgia Brumell
Corner Dress Shop
123 Anyother Street
Anytown, US 12345
Dear Ms. Brumell:
We have received your recent request for advice on your holdings in Nile Water Importers and
Babble Interpreters. We recommend that you sell both companies.
We evaluated the possibility of selling your investment in Nile Water Importers and keeping
Babble Interpreters. However, selling only the one investment would likely cause a loss of $5,500
to your portfolio, plus sales commissions. If you sell both companies, however, you will receive a
$4,400 capital gain from the profits from the sales, thus making this option the best decision.
If you would like to discuss this suggestion further, please give me a call at (800) 666-9999.
Sincerely,
M. Ostley Wrongh
M. Ostley Wrongh
Exercise 2−2 through 2−9
Self-explanatory⎯answers will vary
CHAPTER 3 THE FLOW OF THOUGHT:
ORGANIZING FOR COHERENCE
Chapter Objectives
The objectives of this chapter are to
• Review the principles of coherent organization:
1. Summary sentences to make main ideas obvious to the reader.
2. A structure that presents the conclusions and then the support.
3. Transitional devices to preserve a smooth flow of thought.
4. Paragraphs of an appropriate length and structure for business writing.
• Show the students how these principles can be applied to discussion questions and
essays, as well as business documents.
Teaching Tips
To reinforce the concepts covered in this chapter, you can
• Ask your students to summarize their conclusions, main ideas, or recommendations
near the beginning of the documents they write. For most letters and memos, these
summaries will fit well in the introduction, after the subject of the document has been
identified.
• Encourage your students to write in short paragraphs (usually a maximum of four or
five sentences) with strong topic sentences that state the paragraph’s main idea.
• Include essay questions on your exams. Chapter 13 in Effective Writing discusses
writing answers to essay questions on academic and professional exams.
Essay questions will not only show you how well the students have mastered the
course content; they will also give them an opportunity to practice the principles of
essay and paragraph development covered in this chapter.
Encourage your students to begin their answers with an inversion of the question.
Thus the question itself will suggest the first part of the topic sentence.
Select student papers that illustrate the principles of organization covered in this
chapter. With the writers’ permission, duplicate these papers so that the class will
have examples of effective organization. You may choose to show them entire
documents, or only a portion, such as well-written introductions or paragraphs that
have strong topic sentences and that are the proper length. Discuss with the class why
these models are effective.
Troubleshooting
You may encounter these potential problems with the material covered in this chapter:
• Many students have a hard time stating their conclusions at the beginning of a
document. Often they will raise the issues to be addressed or introduce the topic in a
general way, but leave an explicit statement of the conclusions until near the end.
This problem may reflect a natural tendency to take the reader through the process of
discovery that the writer went through to arrive at the conclusions.
To help them overcome their resistance to stating their conclusions early, remind
them that the typical business reader likes to have concrete answers as fast as
possible. In fact, some readers may not read past the first page or so of most
documents; if the important points aren’t at the beginning, the reader may never get
to them.
• Students may have been taught to write in paragraphs that are much longer than the
four or five sentences recommended for business writing.
Remind them that shorter paragraphs look better on the page (more white space) and
make the flow of thought easier to follow, especially when the subject being
discussed is complex or technical.
Masters to Use with This Chapter
Effective Writing for Accountants Page 95
Coherent Organization Page 99
Answers to Exercises
Exercise 3−1
1. This paragraph needs revision. Here is one possibility:
Government accountants help national, state, and local governments control spending
and budgeting. Without controls, government spending could run rampant. Thus, one
function of government accountants is to help prevent the government from wasting
taxpayers’ money.
2. This paragraph also needs revision. A possibility is as follows:
Public accountants offer a variety of services to the public. One such service is
auditing. An auditor examines a client’s financial statements to see if they are fair and
prepared in conformity with generally accepted accounting principles. Accountants
thus give credibility to a firm’s financial statements. Another service that the public
accountant offers is management consulting services. Management consultants
suggest ways firms can improve such functions as information processing, budgeting,
and accounting systems. Finally, public accountants may aid the public in the
increasingly complex area of taxes. Tax accountants prepare and file tax returns and
advise clients how to incur the smallest tax liability.
3. This paragraph should also be revised. One possibility:
Many corporations can benefit from convertible debt, especially corporations that
want to obtain low-cost funds now, and also desire to increase their equity in the
future. However, firms considering convertible debt financing should be aware of the
hardships that may arise from conversion or from nonconversion; they should also be
aware that accounting requirements impose a potentially unfavorable effect on
earnings per share.
4. This paragraph is acceptable as written.
Exercises 3−2 through 3−7
Self-explanatory ⎯ answers will vary.
CHAPTER 4 A SENSE OF STYLE:
WRITING WITH CONCISENESS AND CLARITY
Chapter Objectives
The objectives of this chapter are to
• Introduce the qualities of an effective business writing style: conciseness, clarity,
readability, and courtesy.
• Illustrate specific revision techniques to help students write with an effective style.
• Provide opportunities to practice revision techniques through the exercises at the end
of the chapter.
Teaching Tips
To reinforce the qualities of business writing style covered in this chapter, you can
• Assign the entire chapter for students’ review. Then assign the exercises at the end of
the chapter for students to work on individually or in groups, followed by class
discussion.
When discussing the exercises with your students, remember that many of the
sentences can be revised in more than one correct way.
• Assign specific sections of the chapter according to weaknesses you see in students’
papers. This can be done for individual students, or as a class activity.
• Ask students to look for examples of both well-written and poorly written documents,
based on the qualities of effective style as discussed in this chapter. Have them notice
sentence lengths, active/passive voice, hidden verbs, jargon, and pretentious
vocabulary.
Examples of well-written business prose can be found in The Wall Street Journal and
other business publications with a wide readership. Examples of less effective
writing can be found in FASB pronouncements and some academic publications.
• Ask students to revise their papers, as necessary, according to the suggestions in this
chapter, but don’t overwhelm them with too many revision techniques at once. For
most students, one new technique per paper is probably enough to work on. For
students who write in a wordy style, for example, a note on the papers like this might
be appropriate:
Please revise your paper so that it is about 75% of its present length, but don’t
leave out any important ideas.
To get these students started, you might edit two or three sentences on their papers to
show how they might be made more concise.
Troubleshooting
You might have these potential problems teaching the concepts covered in this chapter:
• A few students may believe that pretentious writing, with unnecessary jargon and
fibig words,” will make them sound better educated and more authoritative.
Show these students examples of influential business writing that is written simply.
• When some students begin to write in shorter sentences than they are accustomed to,
the initial result may be a series of short, but choppy sentences.
The section of the chapter that discusses sentence variety should be helpful to these
students.
• The grammatical terminology used to explain some of the revision techniques may
cause some initial difficulty. (Examples: active voice, prepositional phrases,
modifiers)
The text explains most of these terms. For the few students who need additional
review, your school may have a writing lab or English clinic that can provide them
with the help they need.
• Writing with courtesy and respect will be a challenge for a few students. Three
problems with tone can occur:
1. When they write about technical accounting topics to nonaccountants, some
writers sound condescending or patronizing.
Careful reader analysis should help with this problem: what the reader
already knows, and how the document should make the reader feel. If, for
example, the writer is unsure whether the reader is familiar with an
accounting concept or procedure, the explanation could be prefaced with a
phrase like this: fiAs you probably realize,….”
2. A few students may believe that the documents they write should be very
formal, even fistuffy,” in order to sound professional.
Remind these students that a friendly, conversational tone is usually more
appropriate for business writing.
3. Some assignments will ask the students to assume they are preparing a
document for a supervisor, such as a partner or CEO. Some students may not
show the appropriate deference when writing to such a reader. At its worst
extreme, this oversight could lead them to end a memo to a CEO with a
closing like this:
If you have any more questions, please call my secretary to set up an
appointment.
A similar problem can occur if students use first names inappropriately.
Again, the solution to this problem is reader analysis. Remind the students to
think of the reader’s likely reaction to what the document says.
Masters to Use with This Chapter
These masters for handouts or slide presentations will help you teach this chapter:
Effective Writing for Accountants Page 95
Active and Passive Voice Page 100
Prepositional Phrases Page 101
Answers to Exercises
Exercise 4−1
Answers may vary. Here are some examples of revised sentences.
1. We should not refer to unrealistic projections in our plan.
2. These techniques will improve inventory control.
3. Thank you for your letter of April 30.
4. We will try to complete your returns before April 15.
5. I need to improve my writing skills.
6. In conclusion, this seminar is an excellent opportunity.
7. The seminar will benefit participants in several ways.
8. During our recent visit we discussed the need for improved techniques to meet the control
objectives within these cycles.
9. Use of linear models alone may limit unnecessarily the inferences we can draw from the
data.
10. This method properly allocates costs.
Exercise 4−2
1. that is
2. enclosed is
3. ease, simplify
4. begin
5. before
6. to
7. most of
8. purchase
9. analyze
10. for
11. of, for
12. best
13. control cost
14. I, me
15. thank you for
Exercise 4−3
1. regs, rules
2. negative cash flows, position
3. SOX (Sarbanes-Oxley Act)
4. FASB, SEC, AICPA
5. GAAP
6. NPV
7. Schedule C
8. recapture
9. PCAOB
10. Credit, Cash (These terms have a general meaning as well as a technical accounting
meaning, as in this sentence.)
Exercise 4−4
1. The unexpected retirement of six auditors created a heavier workload for the remaining
staff, causing them to miss several deadlines. The missed deadlines are a problem.
2. The branch office will be located at a new site.
3. The stock’s price dropped by a negligible amount.
4. This product is unusual. Only two manufacturers produce it.
5. The HB Transportation Company’s improved position is the result of two factors: fuel
prices decreased, and the company increased its selling prices.
6. The rule for expense recognition states that when a cost expires, we should recognize
expense.
7. After we calculated the tax effects of purchasing the property, we found the property’s
selling price more attractive.
8. The policy is based on a logical rationale.
9. The FASB has not written an official pronouncement on the handling of requisition costs.
10. These financial statements violate two accounting standards.
Exercise 4−5
Self-explanatory – answers will vary.
Exercise 4−6
1. Our research department prepared this information.
2. Our firm performed no audit work on XYZ’s internal control.
3. We may have to modify our opinion on the financial statements.
4. The SEC requires these disclosures for external reporting.
5. Management can easily implement this procedure.
6. The auditors recommend that we physically control finished parts inventories.
7. Although we purchased our computer last year, it is already obsolete.
8. The seminar will provide guidelines for lease accounting.
9. Many college accounting courses emphasize effective writing skills.
10. We reviewed the prior years’ working papers.
Exercise 4−7
Revised sentences (answers may vary):
1. The IRS ruling will affect XYZ Corporation’s reported income.
2. The company’s controller called a meeting for 9:00 a.m. to discuss problems with the
company’s quarterly financial statements.
3. Accrued expenses report a more accurate picture of the company’s current operations.
4. Improving production efficiency will change the forecast for next year’s income.
5. The staff’s main problem is determining the cost at which to record the purchase.
6. The bond’s sale affects our audit report in two ways.
7. Steve Warren’s income tax return was filed on April 10.
8. Calculating the present value of the bonds’ principal and future cash flows will reveal our
risk.
9. Amortizing the bond discount will allow us to realize the bond’s cash flows evenly
throughout the bond’s life.
10. Determining the company’s net income will pose no problems for our department’s
accountants.
Exercise 4−8
The following is an example of a revision; answers may vary.
Regional Coach Lines (RCL) runs bus service between several cities in three states and
also carries freight for several local businesses. According to its previous financial
statements, RCL has had poor profits for the past several years. During the past year,
RCL was forced to raise passenger fares and freight prices to compensate for increased
costs of operations, including fuel and labor costs. As a result of these increases,
passenger and freight volume decreased drastically, making 2014 a disastrous year for
RCL. In fact, preliminary information shows RCL to be on the verge of bankruptcy.
Exercise 4−9
Revised sentences (answers may vary):
1. The CEO referred to the pension plan in his address.
2. The auditors issued a qualified opinion on the 2014 financial statements.
3. New employees will take two weeks of vacation.
4. Completing the project by next week’s due date will challenge the department’s
accountants.
5. Wordiness makes my writing ineffective.
6. This memo explains our policies on the use of company email.
7. The auditors concluded that they should perform additional procedures on inventory.
8. Investing in new equipment will offer several benefits.
9. The rule for expense recognition states that when a cost expires, we should recognize
expense.
10. The option kept the land available until we decided whether to buy it.
Exercise 4−10
Answers will vary. Problems include wordiness, passive voice, and the use of too many
prepositional phrases. The paragraph is also vague and abstract.
CHAPTER 5 STANDARD ENGLISH:
GRAMMAR, PUNCTUATION, AND SPELLING
Chapter Objectives
The objectives of this chapter are to
• Define standard English.
• Explain why standard English is important in business writing.
• Review the grammatical constructions that give accounting students the most trouble:
major sentence errors, verbs, pronouns, modifiers, parallel structure, apostrophes and
plurals, commas, colons and semicolons, direct quotations, and spelling.
• Illustrate common grammatical errors and show how they can be corrected.
• Show how to write with pronouns that are gender-neutral.
• Through review exercises, provide opportunities to practice the concepts covered in
this chapter.
Teaching Tips
• Explain to your students that papers with obvious grammatical errors, spelling errors,
or faulty punctuation can distract the reader and make the writer seem careless or
poorly educated.
• Assign parts of the chapter, with corresponding exercises, according to the problems
you see in students’ papers. Do this for individual students or for the class as a
whole.
• When marking students’ papers, focus on the errors that are the most distracting to
the reader (in this case, you). Too many fired marks” may discourage the students
from working on the really serious problems.
• For the better writers in your class, attention to the finer points of grammar and
mechanics will help them to become more polished.
• To help your students write with gender-neutral language, show them how
mainstream publications address this issue. Ask your students to find examples in
newspapers, magazines, textbooks, etc., to illustrate the use of gender-neutral
language.
• The grammar and spell checkers included in most word processing programs may
help some students with grammatical and mechanical problems. Spell checkers are
particularly useful, although they will not identify all misspelled words, as the text
points out.
Troubleshooting
You may encounter these problems teaching this chapter:
• Some students may not want to take the time to review and revise their papers so that
they are grammatically and mechanically correct.
Emphasize to these students that careless papers written in substandard English will
make them seem unprofessional, even incompetent.
• For a few students, difficulties with grammar will be so serious that improvement is
beyond the scope of Effective Writing or the guidance you can give them.
If your school has an English clinic or writing lab, refer your students with serious
grammar problems to these facilities for extra help. For some students, a course in
remedial English that focuses on grammar may be necessary.
Masters to Use with This Chapter
Part IV of this manual gives masters for slides or handouts to help you teach this chapter.
Effective Writing for Accountants Page 95
Subjects and Verbs Page 102
Clear Pronoun Reference Page 103
Answers to Exercises
Exercise 5−1
These answers are correct: