ACCT6341_ExecutiveSummaryChapter7
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6341
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Philosophy
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Dec 6, 2023
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Uploaded by UltraWolverine1684
1
Introduction
This memo is an executive summary of Chapter 7 of the book,
Effective Writing: A Handbook for
Accountants.
Critical thinking is defined as, “fair, open-minded thinking that asks appropriate
questions and considers all relevant information before reaching a conclusion.” Chapter 7
focuses on how critical thinking skills can be developed.
It also discusses the process of
constructing an argument, two approaches to logical reasoning, and some fallacies that should
be recognized and avoided. It concludes by demonstrating how critical thinking can be used to
resolve ethical dilemmas.
Making an Argument: The Process
In your professional capacity, there may be occasions when you're tasked with suggesting a
course of action for your company or clients. Crafting a well-founded recommendation requires
the development of a compelling argument. Exercise caution and keep in mind the expectations
of your readers and the document's purpose. This process can be divided into six steps and
used for the following scenario: “You are an accountant employed by a medium-size accounting
firm. The firm has twenty accountants on its staff, in addition to technical and clerical support
staff. The firm has had its offices in a grand old office building in the downtown heart of the city
for the past sixty years. However, the owners of the building have decided to convert the
building to residential condominiums, forcing your firm to relocate. You have been asked to
recommend the best alternative for the new office. After researching the alternatives, you will
present your recommendation in a memo to the firm’s partners. How do you form and
communicate your recommendation?”
1. Identify the key issues.
To construct a solid argument, start by identifying key issues. In the
described situation, focus on determining the optimal city location for the new office and
deciding between leasing, purchasing an office space, buying a building, or constructing one.
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Analyze factors like space availability and costs, site suitability, and accounting implications for
each option.
2. Anticipate all sides to an argument.
Before concluding, research all viable alternatives and
consider the preferences of decision-makers, especially the firm's partners. Listen to their views,
read their writings, and clarify their stance on leasing, purchasing, or constructing. Determine
their preferred office location within the city, whether central, midtown, or suburban.
3. Research all sides to the argument, using authoritative sources.
After identifying alternative
solutions, research them considering both accounting and non-accounting factors. Evaluate how
each option meets your firm's needs in terms of convenience, business suitability, parking, and
the surrounding business environment. Assess renovation requirements and associated costs.
Investigate accounting implications, referencing specific GAAP and tax provisions for leasing,
purchasing, or constructing decisions.
4. Weigh the evidence for all sides to the argument and build support for your position.
After
analyzing the information, the best relocation site is apparent. Organize your conclusions
logically, possibly in an outline, covering key issues, recommendations, and supporting reasons
in order of importance.
5. Identify and respond to counterarguments.
Anticipate partners' preferences or objections to
the chosen relocation site. Identify potential counterarguments and decide whether to concede
or refute them. A balanced response enhances credibility. Seek preliminary feedback from
partners before finalizing your recommendation.
6. Communicate your conclusions.
In this step, communicate your conclusions, reasons,
anticipated counterarguments, and your responses. This can be done orally in a meeting or
through a written document like a memo, letter, or report.
Reaching Sound Conclusions: Two Approaches to Logic
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Critical thinking involves constructing an argument, as outlined in the process above. It can also
be viewed as an application of logic, defined as the practice of sound reasoning. The field of
logic is commonly categorized into inductive and deductive reasoning.
Inductive Reasoning
The process of constructing an argument for office relocation illustrates a form of inductive
reasoning, involving gathering evidence to reach a conclusion. Inductive reasoning is formally
defined as drawing conclusions about the whole based on a study of representative examples.
The scientific method, involving observation, data gathering, and hypothesis formation, is an
example of inductive reasoning. Variations include making comparisons, analyzing causes,
conducting surveys, referring to authoritative sources, and citing statistics. In essence, inductive
reasoning starts with specific facts and derives general conclusions or principles from them.
Deductive Reasoning
Inductive reasoning consists of specific information being gathered and then a general
conclusion is reached. Deductive reasoning involves working in the reverse direction; you start
with one or more general assumptions or premises and reach a specific conclusion.
Deductive
reasoning is commonly expressed through a syllogism, which comprises a major premise, a
minor premise, and a conclusion.
In deductive reasoning, ensuring sound conclusions involves
having both valid and sound arguments. A valid argument is one where the conclusion is
correctly drawn from the premises.
For deductive reasoning to yield true conclusions, it must be
both sound and valid. Sound reasoning entails not only (a) correctly drawing the conclusion
from the premises but also (b) ensuring the truth of the premises. To achieve a sound
conclusion, both major and minor premises must be true.
Fallacies: Mistakes in Reasoning
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To ensure sound conclusions, it's crucial to avoid reasoning errors. This entails recognizing and
steering clear of fallacies in your own arguments and those of others. In the context of deductive
reasoning, this means avoiding the pitfalls of drawing improper conclusions from premises or
relying on false premises. Common fallacies that should be avoided are:
Fallacies involving language.
Using ambiguous word choices (vague or undefined),
loaded language, labels, and slogans.
Fallacies involving appeals to emotion.
Appealing to fear, pity, anger, or prejudice.
Fallacy of appeal to tradition.
Arguing for something only because it is customary.
Fallacy of false authority.
Using authorities that are unidentified, irrelevant, or lacking
proper credentials.
Ad hominen fallacy.
Attacking an opponents’ character, rather than their arguments.
Post hoc fallacy.
Assuming that because one circumstance happens before another, the
first circumstance is the cause of the second.
Hasty generalization fallacy.
Using poor or inadequate sampling techniques.
Either/or fallacy (false dilemma).
Assuming there are only two choices when there may
be several.
Slippery slope fallacy.
Arguing that if one event occurs, a series of undesirable events
will inevitably occur as a result.
Critical Thinking and Ethical Dilemmas
We highlighted the importance of ethics in accounting, stressing the need for accountants to
maintain high ethical standards. Guidance for ethical decision-making comes from legal
requirements, codes of ethics (e.g., AICPA’s Code of Professional Ethics or IMA’s Statement of
Ethical Professional Practice), and personal values. While ethical behavior is often clear,
complex situations may arise, requiring critical thinking to resolve dilemmas—a process akin to
constructing a strong argument. Identifying and defending the most ethical course of action is
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essentially a form of argumentation, even if it is internal.
When you are faced with a situation
that requires you to make an ethical decision, follow these steps:
1.
Obtain all the facts relevant to the situation.
2.
Identify all the ethical issues.
3.
Determine who will be affected by the way these issues are resolved. Consider both
individuals and groups, such as shareholders, employees, and the general public.
4.
Identify alternative solutions to the issues, including arguments that might be used to
support each alternative.
5.
Analyze how the individuals and groups identified in step 3 would be affected by the
alternative solutions.
6.
Consider guidelines for ethical decisions, such as applicable legal requirements, codes
of ethics, and your own ethical values. Be careful to avoid logical fallacies in your
thinking.
7.
Decide on the appropriate action and, when necessary, communicate your decision to
the appropriate parties. If the situation is potentially contentious, be prepared to provide
the reasons for your decision. When you write or speak to someone about ethical issues,
be especially tactful, courteous, and respectful to all parties concerned.
Analysis
This chapter provided several valuable concepts that contribute to effective decision-making
and critical thinking that I will implement in my future endeavors. The six-step process for
constructing a compelling argument stands out as a practical guide that will help me navigate
complex scenarios and communicate sound conclusions. The emphasis on anticipating all sides
of an argument and identifying counterarguments enhances the credibility of my decision-
making, by ensuring a more comprehensive and thoughtful approach. The distinction between
inductive and deductive reasoning offered a nuanced understanding of logical thinking and
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enhancing analytical skills. Additionally, the exploration of common fallacies provided a crucial
awareness of potential pitfalls in reasoning, promoting sound and valid arguments. Last, the
integration of ethical considerations into the critical thinking process underscores the importance
of maintaining high ethical standards in decision-making. These concepts collectively will assist
in my task of making informed, ethical, and well-supported recommendations.
Conclusion
In conclusion, Chapter 7 underscores the development of critical thinking skills, exploring the
construction of arguments, logical reasoning approaches, and the recognition of fallacies. The
application of critical thinking is demonstrated through the resolution of ethical dilemmas in
accounting, emphasizing the importance of maintaining high ethical standards. The six-step
process outlined for making a compelling argument in the context of office relocation provides a
practical guide for professionals. By following this process, individuals can navigate complex
scenarios, weigh alternatives, and communicate sound conclusions effectively. Additionally, an
overview of inductive and deductive reasoning, along with the identification of common fallacies,
enhances the reader's understanding of logical thinking. Overall, the chapter provides a
comprehensive foundation for professionals seeking to hone their critical thinking skills in the
realm of ethical decision-making and strategic recommendation.
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