What’s wrong with our introductory accounting text books?:
A teaching note
Paul Wells1
Rowena Sinclair
School of Business
Auckland University of Technology
Auckland
New Zealand
8 March 2016
1
Corresponding author. Paul Wells, School of Business, Auckland University of Technology, Private
Bag 92006, Auckland, New Zealand., Phone: 64 9 9219999 x5750, E-mail: paul.wells@aut.ac.nz.
Abstract
Many researchers have found that the accounting education contributes to the narrow
and stereotypical perceptions students have of accounting.
This teaching note
examines the contribution that introductory accounting textbooks might make to these
stereotypical perceptions. We believe that the changing role of the accountant and the
influence of technological change on the duties performed by accountants has been
ignored by the authors of the introductory accounting textbooks currently adopted by
New Zealand Universities. This finding provides one possible explanation for the
continuing narrow and stereotypical perceptions our students have of accounting.
Given that most of the textbooks adopted, are adaptations of American textbooks,
these findings will have implications for teachers and authors beyond New Zealand.
Keywords: education, introductory accounting, accounting curriculum
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Introduction
Reviews of the accounting curriculum in the United States (Accounting Education
Change Commission, 1990; American Accounting Association, 1986; Arthur
Andersen et al., 1989) concluded that the accounting curriculum created a perception
of accounting as a routine, predictable, and procedural activity. The reviewers have
argued that this perception has created a misunderstanding of, what accounting is and,
the duties performed by accountants. These reviewers further suggested that a decline
in the number and quality of accounting students choosing to major in accounting is a
direct consequence of these perceptions.
These concerns led to recommendations from the Accounting Education Change
Commission (1992), in the United States of America, to liberalise the introductory
accounting courses to better reflect the aptitudes and skills needed for a successful
career in accounting.
Specific responses to this perceived problem included:
(1)
the recommendation to design more conceptual and less procedural accounting
courses in Australia (Mathews, Brown, & Jackson, 1990),
(2)
the release of Issues Statement Number Two – Decoupling of Academic
Studies and Professional Accounting Examination Preparation (Accounting
Education Change Commission, 1991) which sought to enhance the
educational experience of students,
(3)
the issue of Position Statement Number Two – The First Course in Accounting
(Accounting Education Change Commission, 1992) which acknowledged that
“this course shapes the (1)perceptions of the profession, (2) the aptitudes and
skills needed for a successful career in accounting, and (3) the nature of
career opportunities in accounting.”
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Despite these efforts, the results from these initiatives appear to have been rather
disappointing. Garner and Dombrowski, (1997, p. 307) found that the narrow focus
on scorekeeping in tertiary level accounting courses continued to be a major factor
“….in turning off potential accounting majors”.
Meanwhile, Sundem (1999)
concluded that pedagogy had changed more than content, which endorsed the findings
of Albrecht & Sack (2000) who found that there had been little change to the content
of introductory accounting courses in the United States.
Smith David, MacCracken, and Reckers (2003) suggest the impediments to changing
this focus in introductory accounting courses are: first the lack of ‘technology’ savvy
instructors; and second the lack of technology integration in the textbooks. These
authors further suggest that publishers are conservative and hence are unwilling to
accommodate changes as they would be costly and success could not be guaranteed.
This teaching note examines how introductory accounting textbooks have ignored the
changing role of accountants and the influence of technology on the design and
operation of a modern day accounting system thus contributing to the perpetuation of
the stereotypical perceptions people have of accounting.
The Changing Role of Accounting and Accountants
The changing role of accounting and accountants was acknowledged by Hopwood
who suggested that:
Accounting is increasingly seen as a pervasive and highly generalized
technology that can contribute to the functioning of a very wide range of
organizations and socio-economic processes. (Hopwood, 1994, p. 299)
This statement highlights the changing role of accounting during the twentieth century
and is now evident in many aspects of everyday life. As such, accounting involves
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the preparation and use of information to facilitate economic decision making which
inescapably influences the actions of every individual and organisation. Hopwood
claims the significance of this transformation is in part due to the reciprocal
relationship between the roles and contexts of accounting and that each influences and
assists in shaping the other.
Parker (2001) suggested that these changing roles were influenced by the following
contextual changes: internationalisation and globalisation of business, growth of nonaccounting competitors and alliances, the rise of information technology, the
development of the knowledge-based economy, empowered and discriminating
product and service consumers, broader scope accountability pressures and changing
work patterns and attitudes. The effect of these influences has been to extend the role
of accounting from scorekeeping and audit work to include financial planning,
assurance services, strategic, risk, knowledge and change management and
management advisory services. Eight years on, Warren and Parker (2009) note that
despite the changing role of accountants, the bean-counting stereotype persists in the
public and student conception of accounting.
The changing role of accounting has also been reflected in the American Accounting
Association (AAA) (1966) definition of accounting:
“the process of identifying, measuring and communicating economic
information to permit informed judgements and decisions by users of the
information”.
The authors emphasised that accounting was not merely a process of recording and
manipulating economic information and thus did not seek to limit the scope of
accounting. They further concluded that accounting: should not be based solely on
transaction data; was not limited to the measurement of assets and periodic earnings;
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and should not be limited to those entities, for which periodic earnings was a primary
objective.
Contributing to this changing role were technological developments relating to the
capture, processing, storage and retrieval of accounting data and reporting of
accounting information. Specific technological developments have included: the
increasing capacity and declining cost of digital storage media accompanied with the
development of database software to facilitate the efficient and effective storage and
retrieval of data; the development of computer networks facilitating the capture of
data from, and transmission of information to, multiple locations; the development of
the internet to provide a platform to facilitate the transfer of data and information
between entities; and finally the evolution of modern computerised accounting
systems which enable the preparer to: aggregate data; disaggregate information;
specify user defined time horizons; establish multiple relationships between data
items; and generate reports on any data item from any perspective.
These developments have had a significant influence on the structure and operation of
accounting systems and their relationship to other information systems both within
and external to the entity under consideration. Specifically, the accounting system is
now a subset of a much larger information system and most accounting data is now
sourced from other sub-systems where the primary focus is on the capture and storage
of data about business processes. In addition transaction data is not necessarily
captured on paper and is now stored electronically in databases. As a consequence
data is no longer summarised in specialist journals and reported in summary form in
the general ledger – all original transaction data is stored in its original form in a
database and individual transaction details are listed separately in the general ledger.
Thus the resulting ledger account has become merely a report listing transactions by
account and the posting of data from journals to ledgers, the balancing of ledger
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accounts and the preparation of a trial balance, are no longer pre-requisites to the
production of the income statement and balance sheet.
How have textbooks neglected these developments?
A website search of New Zealand Universities was used to identify introductory
accounting course structures. The first course for all business students typically
examines accounting from a user perspective. This type of course is consistent with
the recommendations of Accounting Education Change Commission Position
Statement No 2. (1992). This is followed by a second course for students intending
major in accounting, but with the emphasis in this course being from a preparer
perspective.
A further search of these university and university bookstore websites confirmed that
the seven of the eight universities between them prescribe the textbooks listed in
Table 1.
Table 1: Textbooks adopted by NZ Universities
Code Authors
Title
Publisher
DHL
Davey H., Hopkins L., Ling A,, Low
M. & Sharma, U.
Accounting Principles and
Practice for New Zealand
Students, 2007
Thomson
CMP
Building John Wiley & Sons
Carlon,
S.,
Mladenovic- Accounting:
McAlpine, R., Palm, C., Kimmel, Business Skills, 4th edition
P., Kieso, D., & Weygandt, J.
CMY
Chalmers, K., Mitrione, L., Yuen, S.,
Fyfe, M., Weygandt, J., Kieso, D. &
Kimmel, P.
HHB
Horngren, C., Harrison, W., Accounting, 6th edition
Best, P., Fraser, D., and Willett,
R.
Principles of Accounting, 2nd
edition
John Wiley & Sons
Pearson
A preliminary examination of the textbooks revealed a common theme.
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1. The first chapter provides an introduction to accounting often embracing the
AAA definition or an adaptation thereof while the scope of this definition is
not reflected in the content of the textbook.
2. The next 10 chapters examine the components and structure of the income
statement and balance sheet and the processes involved in collecting,
recording and processing this data to produce these financial statements.
These chapters further demonstrate a bias to financial accounting by
describing the requirements of Financial Reporting Standards rather than
general accounting principles.
3. The remaining 6-7 chapters provide supplementary information on
management accounting topics, most of which source data from the general
ledger thus giving the appearance of being an extension of financial
accounting.
4. The authors claim that most “businesses” use computerised accounting
systems and they suggest the manual and computerised systems are based on
the same principles. They further claim that manual systems are easier to
illustrate. However, these claims ignore the very different processes adopted
by each approach.
5. The accounting system is treated independently of all other information
systems thus ignoring the integrated nature of modern day information
systems which primarily focus on the capture and processing of data about
business processes and the production of financial information is a by-produce
of these processes.
6. Special journals are described as vehicles for summarising accounting data
when, summarised transaction data is no longer stored in computerised
systems
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7. The general ledger is described as a vehicle for storing summarised accounting
data when, the ledger is now merely a report listing transactions by account
code, i.e. it explains the composition of the figures appearing in the financial
report. In addition the ledger accounts are illustrated as “T” accounts when it
is unlikely students will ever see a “T” account in practice.
8. The accounts receivable, accounts payable, inventory and payroll systems are
described as sub-ledgers of the general ledger when they are instead, specific
components of business processes and instead generate data for the
preparation of financial reports.
An analysis of these themes by textbook is presented in table 2.
Table 2: Textbook Themes
Theme
DHL CMP CMY HHB
Adaptation of AAA definition




First ten chapters on structure and preparation of 
income statement and balance sheet



Integrate financial reporting standards into the first 
10 chapters






Computerised accounting systems follow the same 
principles as manual systems implying that the
process is the same



Accounting system represented as independent of 
other information systems







The general ledger is used to accumulate and store 
data by account



Accounts receivable, accounts payable and 
inventory are sub ledgers of the general ledger



Ledger accounts are represented as T accounts



Remaining chapters on supplementary management
accounting topics (* no management accounting)
Special journals are used to summarise transactions
9
*
x
Acknowledge computerised accounting processes 
only after the first 5 chapters



The consequences of adopting the approach outlined above, is that the textbooks
fail to correctly represent current day accounting practice or clearly differentiate
between financial and management accounting. Specifically the textbooks fail to:
1. Acknowledge the capture and processing of data relates to business processes
and, the transmission of accounting data for financial reporting is a secondary
function.
2. Explain the integrated nature of information systems and how a vast amount of
accounting data is sourced from other systems.
3. Acknowledge that management accounting data is not solely sourced from
data reported in the general ledger but is instead sourced from a database
where a much wider range of business transaction data is stored.
4. Acknowledge the role and consequences of using database technology to
produce a greater range and complexity of accounting information beyond the
income statement and balance sheet.
5. Highlight the benefits and limitations of information presented in the income
statement and balance sheet.
6. In addition to emphasising financial accounting processes, the system is
considered independently of its context. These are closed systems which in
the curriculum do not interact with the environment thus removing the
richness of accounting practice. This absence of a contextual consideration
leads to an oversimplification of the accounting process.
These failings are identified in the textbooks reviewed in table 3.
Table 3: Textbook failings
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DHL CMP CMY HHB
Failings
To examine the accounting system as a part of a larger 
information system







between accounting 



To consider the implications of database technology on 
reporting possibilities



To examine alternative data sources for accounting data
To examine the relationship
systems and business processes
The shortcomings outlined above, are of concern in that they limit both the scope and
purpose of accounting and fail to adequately reflect the definition provided at the
commencement of the textbook.
This results in an over-representation of the
perceived usefulness of the income statement and balance sheet. In addition, the
presentation of a disjointed and incomplete view of management accounting
marginalises this sub-discipline and implies that it is subservient to financial
accounting thus contributing to the perpetuation of the accounting stereotype.
Mackie, Hamilton, Susskind, and Rosselli (1996) suggest that there are four key
features of a stereotype. The first is that the stereotype is a cognitive structure that
resides inside the head of individuals. Second, the terms “knowledge, beliefs and
expectations” are inclusive terms in that they are not limited to traits but instead
include attitudes, roles and behaviours of the group. Third, they relate to the target
which consists of two or more people who share the said characteristics, with the
number of groups limited only by the number of identifiable group characteristics.
The fourth feature affect is the mental stimulus which activates the stereotype in
memory and is key to understanding the formation and functioning of stereotypes
(Mackie et al., 1996).
It has been shown that the positive attributes of stereotypes are underestimated and
their negative attributes overestimated or vice versa. They have often been assumed
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to be overgeneralisations, which implies inaccuracy in the perceived dispersion of
group members. That is, members are more or less dispersed around the central
tendency of the group than is the case (Park & Judd, 1990).
We suggest that students have been exposed to accounting processes which do not
reflect current day practice and that the mental stimulus resulting from repeated
exposure to the income statement and balance sheet activates an affective mechanism
which causes students to overgeneralise this experience to represent their
understanding of accounting around which in turn contributes to their very narrow
perception of accounting. It is therefore argued that if the textbook contained a more
contextually and broad based approach to accounting, there would be greater
awareness of a much more diverse range of accounting outcomes and outputs and, a
greater diversity of input data, data sources and processing activities. We believe that
this will only occur when the design of an accounting system commences with a
vision and plan for the future of the entity within a specific context so that the
information needs of the interested parties is better understood.
A possible
explanation for the suggested bias towards financial accounting is that it being much
more structured and regulated it is easier to define while management accounting is
less structured and more user defined within a specific context.
Conclusion
We have examined the approach taken by the authors of introductory accounting
textbooks and suggest that this in part contributes to the negative perceptions that
students have of accounting. To what extent the influence of the curriculum is
instructor or textbook driven is unclear, however the consistency of approach among
the textbooks would suggest an element of influence by the textbooks and their
authors.
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This teaching note provides a call to authors and publishers to de-emphasise the
excessive focus on financial accounting to the detriment of management accounting
and to better reflect the influence of technology on the accounting process as currently
practised.
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