FLIPPING YOUR FINAL EXAM: MAKE THE LAST CLASS
INTERACTION MEMORABLE
Michael J. Krause, MS, CPA
University of Indianapolis, School of Business
1400 East Hanna Avenue
Esch Hall 052S
Indianapolis, IN 46227
317-791-5950
Fax: 317-788-3586
krausem@uindy.edu
FLIPPING YOUR FINAL EXAM: MAKE THE LAST CLASS INTERACTION
MEMORABLE
ABSTRACT
A financial statement analysis project can be assigned as a capstone event at the end of a
Managerial Accounting business core course. Many Intro Managerial texts conclude with a
financial statement analysis chapter. However, one wonders how many instructors utilize that
chapter either because of a perceived lack of relevance or because such material got previously
covered in the Intro Financial Accounting course. So I decided to revisit Financial Accounting.
Using common-size and ratio analysis, I created a final exam assignment that would hopefully
link Managerial Accounting to lessons typically associated with Financial Accounting. Of further
importance, I designed a final exam vehicle which would fully and effectively utilize the allotted
exam time. Working in teams of two, students wrote a short paper and delivered it to their
classmates on the scheduled final exam date. After the presentations the students surveyed for
their views on the experience. Subsequent to the planning and execution of this experiment, the
project became framed by an accounting education topic (flipping the classroom) extensively
discussed at the American Accounting Association’s 2013 Annual Meeting.
INTRODUCTION
I had a simple idea. I wanted to effectively utilize the 150 minutes available for the final
exam in the Managerial Accounting business core course. While some students used forty-five
minutes to take their last test, others used 149.5 minutes. But I never experienced a positive way
to say good-bye to those students to whom I had begged, cajoled and irritated to study
Managerial Accounting during the waning semester. So I devised a plan for my students to do a
financial statement analysis project, and present it to each other during the scheduled final exam
time. Going into the experiment, I knew that I needed to figure out how a financial statement
analysis assignment would have managerial accounting relevance. But I never planned for any ex
post facto meaning to be discovered some three months later in Anaheim, California.
At the 6th Annual (August 3 & 4, 2013) Conference on Teaching and Learning in
Accounting (CTLA) held in conjunction with the American Accounting Association’s Anaheim
2013 Annual Meeting (AAA Meeting, Anaheim 2013), the idea of restructuring classroom
strategies got prominent attention. Specifically, the August 3 CTLA Poster Session 3.06
explained “Flipping the Classroom, etc.” What gets flipped in classroom flipping? The students’
schedule to do learning tasks gets rearranged. They do their homework in class and their initial
study sessions at home. Many professors place lectures on video. Essentially, a traditional
homework assignment gets replaced by an interactive in-class session where the professor
functions more as an advisor or as a facilitator.
1
Participants at both the CTLA (2013) and at the immediately following AAA Meeting,
Anaheim 2013, had many additional opportunities (panels, posters and presentations) to interact
with the “Flipping the Classroom” theme. As the following table clearly shows, “Flipping the
Classroom” was a hot topic at both conferences. When I noticed the trend I decided to
incorporate it into my original work dealing with a final exam experiment. While Table 1. below
lists the sponsor (AAA/TLC) not an author for the August 5 and 6 panel discussions, the
conference proceedings identified panel discussants: Markus Ahrens and Fred Phillips (3.10);
Tracie Nobles and Wendy Tietz (6.02).
Table 1.
Date
(2013)
8/3
Conference
Session
Type
Author
Title
CTLA
3.06
Poster
8/3
CTLA
4.3
Present
Phillips and
Trainor
Alldredge
8/3
8/3
CTLA
CTLA
4.3
4.3
Present
Present
Dosch
Fajardo
8/3
8/3
CTLA
CTLA
5.3
5.3
Present
Present
Slayter
Warfield
8/3
CTLA
5.3
Present
Wood
8/5
AAA
1.10
Poster
Elson, et al
8/5
8/6
8/7
AAA
AAA
AAA
3.10
6.02
4.1
Panel
Panel
Poster
AAA/TLC
AAA/TLC
Morris, et al
8/7
AAA
4.10
Poster
Chung, et al
Flipping the Classroom and Accounting
Students’ Reactions
How to Flip Your Classroom
Incorporating Flipped Classroom Techniques
in Management Accounting Courses
A Flipped Classroom Strategy for Live Chats
in Online Accounting
Study of a Flipped Course
Applying the Flipped Classroom Concept to
Management Accounting Instruction
Tailored Teaching to Flip the Classroom
Experience
Using Attribute Sampling to Flip the Audit
Classroom
To Flip or Not to Flip the Classroom
Experiences with the Flipped Classroom
Flipped Classrooms: Easy, Inexpensive Ways
to Get Started
Flipped Classrooms – The Accounting Way
2
Remember, the idea and the data for this article happened prior to the AAA Meeting,
Anaheim 2013 and the antecedent CTLA. My pedagogical motivation was simply to provide
students with a relevant opportunity to learn while fully utilizing scheduled final exam time. At
those conferences, I had my first opportunity to think about the flipped classroom theme and
reflect upon the fact that my 2013 AAA poster session was a variation of the flipped classroom
theme. For the Anaheim meeting I presented a poster titled “Managerial Accounting Principles:
Financial Statement Analysis as a Capstone” (Effective Learning Strategies Session 1 Board 1).
In my view, two conceptual platforms compete for attention in a six hour business core
accounting sequence. AIS (inputs) versus Financial Statement Analysis (outputs) form the
creative tension which the instructor must balance in a syllabus that documents learning
strategies and values. So I wanted to use the available final exam time for my business students
to explore once more accounting outputs. While the Managerial Accounting project’s goal was
financial statement analysis and discovering its management context, the ultimate experience
became student empowerment. My role as instructor morphed into that of mentor, facilitator
and evaluator. Without my prior knowledge, my final exam experiment reflected the themes
proffered by the Anaheim 2013 flipped classroom advocates for I gave my students the primary
responsibility to learn what financial statements had to offer an analyst.
For those of you who might be leery of the flipping the classroom strategy, the following
presentation describes my experiences. To be more precise, my experience deals with what I
would label as a flipped final exam. I don’t think that the flipped lesson plan is one that an
instructor attempts precipitously. Rather, through trial and error, one gains confidence to take
the plunge. I am not there yet. But my experience was positive within the final exam venue. So
I am now further intrigued to consider more attempts at classroom flipping as advocated by an
apparently growing number of accounting education scholars.
Planning the Final Exam Event
In a visiting role during the 2012-2013 academic year I taught at the University of South
Florida. I taught the 200 level Managerial Accounting course over three semesters, one section
each semester. Data from the third semester happened too late to be incorporated into my poster
presented in Anaheim. Additionally, I taught a 600 level MBA course where the managerial
component was the second half of the course. That MBA course when combined with the
financial component took the name “Accounting Concepts for Managers”. For the fall 2012
semester, in the MBA class, I first tried a financial statement presentation in class as a final exam
feature. The graduate class performed very well, and a true learning experience appeared to
happen. Based upon that positive experience, I ventured to replicate the assignment at the
undergraduate level, and also include in it a capital budgeting aspect.
3
The undergraduate analysis event happened during the spring 2013 semester’s final exam
week. So the exam for unit three then happened in two parts. The traditional accounting exam
component (Exam #3, part a) took place three weeks before finals week. Included in Exam #3,
part a, was an extensive problem calculating the standard cost variance analysis. In my earlier
fall 2012 experience teaching Managerial Accounting at USF, the variance analysis problem
solving question got placed on the unified final exam held at the traditional finals date. The
results of that particular variance question kept marginal students from getting the final grade
necessary to continue on in the College of Business Administration. Essentially, the standard
variance calculation question yields most available test points or no points at all. This question
is the ultimate no place to hide accounting problem. And my students involved in this reported
project performed about the same as their peers in the prior semester.
Armed with this negative feedback from the first part of their final exam, my spring 2013
students appeared to be very motivated to perform well on the finals week project. The course
final grade based upon a three hundred point system with the finals week project consisting of 15
points of the 95 points allotted to the unified unit 3 exam. As students left part a of their third
exam, they got assignment instructions and a rubric that explained to them the grading process
for the final project scheduled three weeks away. The students then read the following project
mission.
Table 2.
Students (in teams of two) are to analyze a publicly traded corporation. A presentation will be made to the class
and documented for the instructor in a paper not to exceed two pages (not including a separate page where ratio
calculations shown). Students are to evaluate the investment worthiness of the corporation analyzed by using ratio
analysis, common-sized financial statements, and an estimate of the corporation’s cost of capital. To accomplish this
mission the students also got the following grading rubric.
1
2
3
4
5
6
Rubric – Evaluation Criterion
Sufficient ratios used to explain insights gained
about the company studied.
The analyzed company’s Cost of Capital estimate
made in a systematic and logical manner.
Presentation (paper) used either an internal or external
point of reference to enable making comparisons and
conclusions about studied company’s investment worthiness.
Presentation (paper) reached an original logical conclusion
about the company’s investment worthiness.
Paper was well written.
Class presentation made in an effective manner.
TOTAL POINTS EARNED
Evaluation
1
Points
2
Earned
3
1
2
3
1
2
3
1
2
3
1
1
2
2
Two weeks later, during the last week of regular classes, students received the following
written instructions as to how the final exam project would be conducted during the next week.
4
Table 3.
1
2
3
4
5
6
7
Project Presentation Procedures Will be as Follows:
Attendance will be taken at 6:10 PM. Anyone not present at that time will
get a zero for the final exam.
Presentations will be made starting at 6:15 PM in an order determined in
advance by the instructor, but not disclosed until the exam begins.
Presentations should take about five minutes.
Students are to make notes to be able to rank presentations as first, second
and third best. Ranking should be based upon which company looks like
a good investment opportunity.
Students will hand in their paper and their votes for best presentations
after the last team concludes.
Anyone not present to hand in their paper and submit their votes for best
presentations will get a zero for the final exam.
The three teams with the highest votes will get an extra point for
presentation evaluation.
Students also got a verbal plea to behave well during class presentations. With an official
class size of 46 students, in a classroom built to handle another 15 students, I wanted a respectful
atmosphere especially for first-time speakers. 39 students actually participated in the final exam
event. Students not informed until the final exam day that they would be asked to do a survey
about their learning experience.
OBSERVATIONS
On the evening of April 29, 2013 twenty student groups (only one person alone)
presented their research findings about a publicly traded company to their classmates during a
scheduled final exam date. As a result of this project, students either studied themselves or
listened to their peers talk about notable publicly traded companies such as: Boeing, CVS,
Disney, Johnson & Johnson, Nike, PepsiCo, Philip Morris, Publix, Verizon and Wells Fargo.
This diversified list does not represent all companies evaluated. Plus most groups included a
competitor to serve as a counterpoint to their discussions. Most students acted very respectfully
and attentively during the presentations. On average each presentation last about seven minutes
with some going over ten minutes.
An overwhelming number of students used Power Points slides. Many used the
presentation feature which updated an original slide with additional facts and analysis in order to
emphasize a point. Some students used videos to explain a company’s business mission. The
top vote getting projects also appeared to have the best visual presentations. Nineteen out of
twenty presentations got votes. The only project without a vote was the last one presented which
was the fourth presentation about Nike.
5
In my role as evaluator, I tabulated the votes in a similar way to major league baseball’s
method to select a Most Valuable Player. A first place vote got three points, a second place vote
got two points, and a third place vote got one point. The top vote getting presentation earned 54
points, the second place finisher earned 35 points and the third best group totaled 27 points. Two
more groups received 19 and 18 points. So I awarded them honorable mention status. All five
groups got additional points (more than advertised in the pre-exam week marching orders)
towards their final grade calculation.
The only part of the original project plan which was an outright failure was the task to
estimate a company’s cost of capital. Only a couple of groups even attempted to make the
calculation. Those groups contacted me for help in advance and outside of class time.
While 46 students had to be given a final course grade, only 39 students participated in
the final exam project. Essentially, by not showing up, I had no qualms about failing 15% of the
final class roster. The participating marginal students got the lowest passing grade possible. But
at least I now knew, thanks to the final exam project, that they wanted to put forth the effort to
obtain an education and continue on at the College of Business Administration.
The final exam project used the entire allotted final exam time. While under time
pressure to collect all ballots and to get my students headed home as quickly as possible, I
personally felt a better sense of closure towards our common semester experience. Instead of
just nodding to my students as they left the traditional heavily guarded final testing venue, I got
to wish them well and express my hopes that they continue to learn. My final student interaction
was metaphorically more like that of a pastor at the end of a service rather than that of a prison
guard making sure that the exit door was truly closed behind them. I even sent the class an email follow-up to let my now former students know which groups got the most peer votes.
SURVEY RESULTS
The survey questions asked and listed in a way to test for logical consistency. One
response out of 39 voided for simply circling the same number for all questions asked. The
following survey results tabulated.
6
Table 4.
1
2
3
4
5
6
7
Statement (N = 38): Strongly Agree (1) – Strongly Disagree (5)
I would have preferred a traditional format final exam similar to the exams
given during the semester.
Using “real world” data instead of text book problems is a better way to
learn Accounting.
For budgeting time to spend on end of semester graded work, an accounting
project manages time better than studying for a traditional accounting exam.
I probably spent more time on the final exam project than I would have
spent preparing for a traditional accounting final exam.
Final exam project helped me to understand the difference between
Financial Accounting and Managerial Accounting.
The final exam project which required me to use my own developed
Accounting data was a positive learning experience.
The final exam project left me with a more favorable opinion about the
importance of accounting data for decision makers.
Mean
Sigma
4.21
.893
1.68
.892
2.03
1.063
3.37
1.326
1.95
.916
1.63
.901
1.66
.897
Questions 1 and 2 served as the logical consistency test. If someone preferred a
traditional format final exam, then it was my opinion that such a person would have evaluated
poorly the value of using “real world” data as a way to study accounting. The survey results
seem to support my logical consistency hypothesis. The responses to Survey Questions #1 and
#2 displayed a clear rational consistency as evidenced by their mirror image opposite mean
results coupled with their nearly identical standard deviations.
CONCLUSIONS
Survey results confirmed what I knew intuitively that students extremely motivated to do
well on the final project. In the first survey question, students expressed a strong disapproval of
using the traditional exam format during finals week. Undoubtedly, given the strength and the
consistency of the response, Survey Question #1 reflected many students’ negative experiences
in the other semester exams, most especially with the variance calculation question in Exam #3a.
While the students agreed in theory that an end of the semester project was a more
efficient use of their time (Survey Question #3), students not so sure if they actually saved time
by doing a final project instead of a traditional final exam (Survey Question #4). The
comparison of the responses to Survey Questions #3 and #4 provide a couple of insights. First,
as was the case in comparing Survey Questions #1 and #2 (see Survey Results section), survey
respondents provided rational thoughtful answers. Survey Question #4 had the highest standard
deviation. This seems logical as the questions requires subjective judgment about comparing
actual time spent on a real project versus estimated time on a hypothetical exercise. Yet, Survey
Question #4’s apparent weakness leads to a very strong conclusion when considered in
conjunction with Survey Question #3. Students apparently believed that the final exam project
in this study was a better use of their time even if it did not actually save them minutes in terms
of real time. One can only hope that what these millennial students experienced was a learning
event where the quality of the experience outweighed the time investment.
7
Survey Questions #5, #6 and #7 all indicated that the respondents believed that the final
project was a positive learning experience. The project appeared to facilitate student
achievement of a course learning goal: to understand the benefits of Managerial Accounting’s
specific models in relationship to the output provided by Financial Accounting’s general
principles. This paper’s abstract initially categorized the observed student assignment as a
Financial Accounting revisited project. Additionally, the abstract established a mission charge
for the student’s research –to find the link to Managerial Accounting. Students seemed to see
that link as evidenced by the response to Survey Question #5. But was that Managerial
Accounting link in a Financial Statement Analysis project real or imagined?
In conclusion based upon my observations of this student project and my own personal
philosophy about teaching Introductory Accounting, I want to try to answer the following
question: can one find a Managerial Accounting link in a Financial Statement Analysis project?
First, I have come to believe that the core competency for both Financial and Managerial
Accounting is Accounting Information Systems. Without a logical and methodical information
system neither accounting branch could succeed at peak efficiency. So rather than thinking of
Financial and Managerial Accounting as separate learning silos, they should be thought of being
forever intertwined by a common data base. So to promote one discipline is not therefore an
implied diminishment of the other.
Additionally, the student research presentations that I witnessed on April 29, 2013 did
nothing to cause my above stated philosophy of primary accounting education to waiver. I saw
current ratios far lower than the old rule of thumb of 2:1. This finding made tremendous sense in
relationship to the Just-in-Time management philosophy frequently referred to by the Managerial
text authors. The current ratio analysis received backup from a very efficient inventory turnover
calculation. Students found information in the MD&A part of the 10K which revealed corporate
strategy, a hallmark of Managerial Accounting studies. In doing common-sized financial
statements student showed vertical and horizontal trends which would be a critical part of any
master budget discussions. Efficiency in collecting accounts receivable would have a critical
interface with the cash portion of the master budget. Some companies had minimal issues with
receivables which reflected their marketing and distribution strategies.
Finally, my favorite memory of this learning experience dealt with the group which
analyzed JP Morgan Chase and used Wells Fargo for comparison. Using a three year timeline,
the students compared the two banks’ earnings per share, dividend yield and the price earnings
ratios. For 2012 vs. 2011, Wells Fargo had a lower price/earnings ratio growth as compared to
JP Morgan Chase despite the fact that Wells Fargo had a more defined steady upward trend in
earnings and dividend yield. I stopped the presentation to interject that this was a teachable
moment. I asked the class if they saw that their classmates work had identified a buy opportunity
for Wells Fargo stock.
On May 16, 2013, about two and a half weeks after the student presentations, Forbes.com
reported that Warren Buffett had made a major purchase of Wells Fargo stock. In fact, as a
result of that purchase, Wells Fargo replaces Coca-Cola as Buffet’s largest stock holding. Mr.
Buffett, my students would applaud your choice. Thank you for making my last interaction with
my Managerial Accounting class even more memorable than I had originally thought.
8
REFERENCES
Alldredge, Dave, “How to Flip Your Classroom”, Presentation made at 6h Annual Conference
on Teaching and Learning in Accounting (Session 4.3), Anaheim, CA, August 3-4, 2013.
American Accounting Association – Teaching, Learning and Curriculum Section, “Experiences
with the Flipped Classroom”, Panel Discussion held at the American Accounting
Association Annual Meeting (Session 6.02), Anaheim, CA, August 3-7, 2013.
American Accounting Association – Teaching, Learning and Curriculum Section, “To Flip or
Not to Flip the Classroom”, Panel Discussion held at the American Accounting
Association Annual Meeting (Session 3.10), Anaheim, CA, August 3-7, 2013.
Chung, Shifei and Remesh Narasimhan, “Flipped Classrooms – The Accounting Way”, Poster
presented at the American Accounting Association Annual Meeting (Session 4.10),
Anaheim, CA, August 3-7, 2013.
Dosch, Jennifer, “Incorporating Flipped Classroom Techniques in Management Accounting
Courses”, Presentation made at 6th Annual Conference on Teaching and Learning in
Accounting (Session 4.3), Anaheim, CA, August 3-4, 2013.
Elson, Raymond, Susanne O’Callaghan and John P. Walker, “Using Attribute Sampling to Flip
the Audit Classroom”, Poster presented at the American Accounting Association Annual
Meeting (Session 1.10), Anaheim, CA, August 3-7, 2013.
Fajardo,Consolacion, “A Flipped Classroom Strategy for Live Chats in Online Accounting
Courses”, Presentation made at 6th Annual Conference on Teaching and Learning in
Accounting (Session 4.3), Anaheim, CA, August 3-4, 2013.
Guru Focus, “Warren Buffet Buys Wells Fargo, Chicago Bridge & Iron, Sells General
Dynamics, Archer- Daniel Midland, Mondelez”, Forbes.com, May 16, 2013, accessed
September 8, 2013, http://forbes.com/warrenbuffetbuyswellsfargo,etc.
Krause, Michael, “Managerial Accounting Principles: Financial Statement Analysis as a
Capstone”, Poster presented at the American Accounting Association Annual Meeting
(Session 1.1), Anaheim, CA, August 3-7, 2013.
Morris, Jessica E., Sherri L. Place and Jeannie Welsh, “Flipped Classrooms: Easy, Inexpensive
Ways to Get Started”, Poster presented at the American Accounting Association Annual
Meeting (Session 4.1), Anaheim, CA, August 3-7, 2013.
Phillips, Cynthia, and Joseph Trainor, “Flipping the Classroom and Accounting Students’
Reactions”, Poster presented at 6th Annual Conference on Teaching and Learning in
Accounting (Session 3.06), Anaheim, CA, August 3-4, 2013.
Slayter,Eric, “Study of a Flipped Course”, Presentation made at 6th Annual Conference on
Teaching and Learning in Accounting (Session 5.3), Anaheim, CA, August 3-4, 2013.
Warfield, Roland, “Applying the Flipped Classroom Concept to Management Accounting
Instruction”, Presentation made at 6th Annual Conference on Teaching and Learning in
Accounting (Session 5.3), Anaheim, CA, August 3-4, 2013.
Wood, Wallace, “Tailored Teaching to Flip the Classroom Experience”, Presentation made at 6th
Annual Conference on Teaching and Learning in Accounting (Session 5.3), Anaheim,
CA, August 3-4, 2013.
9