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CASE STUDY QUESTIONS Understanding the Importance of Using a Research Process You are the manager on the audit of James &Sons Insurance. You have just assigned a new staff member to a limited-scope research assignment, asking her to research whether commissions to sales staff, incurred for the purpose of acquiring new customers, can be capitalized. You told her you weren’t in a hurry, so she could take her time in responding. Nevertheless, the staff member quickly got to work and responded to you within a half hour with an email including an excerpt from ASC 340-40-25-1 and saying that in her opinion based on this guidance, the costs can likely be capitalized. It looks like this staff person needs some coaching. In approximately one page, tactfully but clearly walk this staff person through the steps in the research process, including “step 0,” that she could have approached more thoughtfully. Include in your response references to (but not necessarily excerpts from) guidance that would have been more responsive to this question.


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