Chapter 2 Critical Thinking and Effective Writing Skills for the Professional Accountant

Learning Objectives Critical thinking skills Critical thinking skills Levels of critical thinking Levels of critical thinking How critical thinking skills can add value How critical thinking skills can add value How writing forms a key element to critical thinking How writing forms a key element to critical thinking How to strengthen critical thinking skills How to strengthen critical thinking skills

Learning Objectives (cont.) A primer on proper punctuation A primer on proper punctuation SEC initiative SEC initiative How to write effective client letters and e- mails How to write effective client letters and e- mails How to write memos to the file. How to write memos to the file.

Critical Thinking Skills “characterized by careful and exact evaluation and judgment” “characterized by careful and exact evaluation and judgment” Purposeful, goal-oriented, and creative Purposeful, goal-oriented, and creative A process of understanding how thinking and learning work. A process of understanding how thinking and learning work.

Critical Thinking skills (contd.) Higher order skills Higher order skills Analysis- breaking ideas into component parts Analysis- breaking ideas into component parts Synthesis – connection among different components to derive relationships that tie the parts of the answer together Synthesis – connection among different components to derive relationships that tie the parts of the answer together Critical assessment – examination of the conclusions reached for sound logical reasoning. Critical assessment – examination of the conclusions reached for sound logical reasoning.

Critical Thinking Skills (contd.) Includes Includes Recognizing any explanatory relations among statements Recognizing any explanatory relations among statements Recognizing the structure of arguments (premises, implicit assumptions, and conclusions) Recognizing the structure of arguments (premises, implicit assumptions, and conclusions) Assessing consistency or inconsistency, equivalence among statements, and logical implications Assessing consistency or inconsistency, equivalence among statements, and logical implications Formulation and identifying deductively and inductively, justified conclusions based on available evidence Formulation and identifying deductively and inductively, justified conclusions based on available evidence

Levels of Thinking Bloom’s taxonomy-six levels, knowledge, comprehension, application, analysis, synthesis, evaluation. Bloom’s taxonomy-six levels, knowledge, comprehension, application, analysis, synthesis, evaluation. Higher order knowledge occurs when using higher order skills Higher order knowledge occurs when using higher order skills One must be able to perform lower level skills before moving up One must be able to perform lower level skills before moving up

Levels of Thinking (contd.) Bloom’s Taxonomy Bloom’s Taxonomy 1. Knowledge – recall 1. Knowledge – recall 2. Comprehension – grasping material 2. Comprehension – grasping material 3. Application – use in new situation 3. Application – use in new situation 4. Analysis – breaks down into components 4. Analysis – breaks down into components 5. Synthesis – puts parts into new form. 5. Synthesis – puts parts into new form. 6. Evaluation – judges the value of the statement 6. Evaluation – judges the value of the statement

8 Elements of Reasoning Purpose Purpose Issue Issue Information Information Concepts Concepts Assumptions Interpretation Implications Conclusions

Effective Writing Skills Know your Audience – supervisor, shareholder, management, government agency, other. Know your Audience – supervisor, shareholder, management, government agency, other. “in accounting and other professions, we must have strong technical skills. But if we cannot communicate what we know, the value of the technical skills is lessened.” “in accounting and other professions, we must have strong technical skills. But if we cannot communicate what we know, the value of the technical skills is lessened.”

AICPA’s 6 Characteristics of Effective Writing for the CPA Exam Coherent organization Coherent organization Conciseness Conciseness Clarity Clarity Use of standard English Use of standard English Responsiveness to the requirements of the questions Responsiveness to the requirements of the questions Appropriateness for the reader. Appropriateness for the reader.

SEC’s Plain English Concept’s Use the active voice Use the active voice Use short sentences Use short sentences Definite, concrete, everyday language Definite, concrete, everyday language Tabular presentation Tabular presentation Limit jargon Limit jargon No double negatives No double negatives

Effective Client Letters and s Oral communication is used if a quick response is needed or if there is a privacy issue Oral communication is used if a quick response is needed or if there is a privacy issue Written communication is normally used if documentation is needed. Written communication is normally used if documentation is needed.