Strategies for Teaching
the Accounting Theory Course:
Curriculum, Pedagogy and Resources
Carla Carnaghan - University of Lethbridge
James Dodd – Drake University
Irene Gordon - Simon Fraser University
David Gilbertson - Western Washington University
Strategies for Teaching
the Accounting Theory Course
Topics to be discussed:
• What do we mean by an accounting theory
course?
• Why we think a theory course is important
• Roles for the accounting theory course in the
curriculum
• Considerations in designing the course content
• Pedagogical techniques and resources
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. August 4, 2010
What Do We Mean by
An Accounting Theory Course?
• Not a lot of literature on such courses (James Martin,
MAAW - AECM)
• Nature of the course is very diverse:




CPA Exam Prep
Current Topics
Financial Economics
Conceptual Framework Course
• Our Focus in Teaching Accounting Theory:
To help students better understand why accounting
“looks like it does”, and the challenges of creating
accounting standards and information given
diverse needs and stakeholders
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Why is a Theory Course Important?
• Increasing complexity of business transactions
 More understanding of what accounting is trying to do is
important
• Impossibility of prescriptive rules
 Trend toward principles-based accounting standards
• Provides students with a different vision of accounting
– Social responsibility
– What could be, rather than what is
• e.g. use of all fair values, replacement cost accounting, different
approaches to accounting for intangibles
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Roles for the Accounting Theory Course
in the Curriculum: Skills and Knowledge
• Critical thinking and reasoning
– Using evidence; challenging status quo
• Speaking and writing skills
• Conceptual knowledge (e.g. fair values, adverse
selection)
• Research skills
– Accounting standards
– Financial reporting regulations
– Practitioner articles and commission reports
– Research studies
• Motivation for standards
• What to do when there is no clear guidance
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Roles for the Accounting Theory Course:
Complementing Other Parts of the Curriculum (1)
• Review/integrate topics from other accounting courses
Conceptual Framework
Examples using existing standards
Implications of current accounting approaches (e.g.
pensions)
• IFRS
• “Forest” rather than “Trees” (Why, not how)
• Discuss current business and accounting issues
Derivatives and off balance sheet financing
Accounting Scandals
Management Compensation
Fair Values
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Roles for the Accounting Theory Course:
Complementing Other Parts of the Curriculum (2)
• Relating accounting to other disciplines:
– Economics (“The dark side”?)
– Psychology
– History
– Ethics
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Designing the Course’s Content: What Do
We Want Students to Learn?
• Critical Thinking
• Role of Assumptions in Developing Accounting
• Using Evidence to Develop/Support Positions
• Writing/Articulating a Coherent Position
• Learning to Learn
• Research skills
• No one right answer?
• Judgment skills (better answers)
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Designing the Course’s Content: What Do
We Want Students to Learn?
• My emphasis is on the development of accounting
standards using history as the starting point. The
idea is to understand how we got to where we are
before starting the trip.
• I emphasize likely future trends and how the students
as professionals can find/support ways to account for
economic transactions. The find/support leads to a
research orientation to stay abreast of change.
• I want students to develop empathy for differing
positions
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Designing the Course’s Content:
Foundations
Financial economics
Critical theory
Conceptual framework
Psychology
Valuation bases (HC vs FV vs RC etc) - R. Jensen,
AECM
• A mix can be helpful to make students think about
underlying assumptions
• History of development of accounting thought can be
helpful in explaining particular developments
•
•
•
•
•
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Designing the Course’s Content:
Concepts that Might be Covered
Economics
Psychology
Critical
Conceptual
Framework
Efficient
Markets
Behavioral
Finance
Ethics
Relevance
Information
Asymmetry
Prospect
Theory
Stakeholders
Reliability
Agency Theory
Satisficing
History of
Accounting
Valuation
Bases
Earnings
Management
Attribution
Theory
Stewardship
Standards
Setting
Decision
Usefulness
Market
Failures
Valuation
Bases
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Designing the Course’s Content:
Controversies that Might be Covered
Topic
Econ
Psych
Critical Framew’k
Fair Values
X
X
X
Intangibles/
Contingencies**
X
X
X
Market efficiency
X
X
X
Management Comp.
X
X
X
Earnings Management**
X
X
X
IFRS Adoption
X
X
Derivatives/
Shadow Economy**
X
X
X
X
X
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Techniques and Resources (1):
Alternative Delivery Methods
• In a traditional classroom, a mixture of
face-to-face and online
– Drake University
– University of Iceland
• Online delivery, 100%
– Blackboard Discussion Boards (forums)
– Blackboard Quizzes for content facts
– VoiceThreads for community building
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Techniques and Resources (2):
Assignments and Projects
•
•
•
•
•
Debates on Controversies (Team)
Position Papers - Followup to Debates (Individual)
Beginning and ending assignments
Group Assignments (in and out of class)
Microeconomic experiments (See Book by Bergstrom and
Miller - McGraw Hill)
• Draft Standards projects - analysis (IFRS or FASB)
• Concept Maps - visual representations of concepts and the
relationships among them. (See Simon, J. 2007. Concept
Mapping in a Financial Accounting Theory Course. Accounting Education:
an International Journal. September. v. 16(3). 273-308)
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Techniques and Resources (3):
Assignments and Projects
• A project comparing U.S. GAAP with IFRS and nonIFRS standards with the goal of developing a “best
standard” by using components from around the
world. It requires review of academic and industry
literature, databases, and the political processes
affecting standards setting.
• Research papers: Newspaper article about a business
and use accounting research to explain the situation
• Requirement to organize and present seminars –
examples from student group’s seminars
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Technique Example: Sample
Student Group Presentation - Experiment
• Investor: to buy or not to buy
• Manager: Honest or Distort
• Assumptions:
• One-period game
• Non-cooperative
• Rational Individuals
Manager
Investor
Honest (H)
Distort (D)
Buy (B)
60, 40
20, 80
Refuse to Buy
(R)
35, 20
35, 30
Pedagogical Technique Example: Sample
Student Group Presentation - Debrief of the
Experiment
• Nash Equilibrium:
– Rational investors would not invest
– Rational managers would distort information
– Suboptimal points for both parties
• Solutions: Cooperative agreement (auditor)
• Enron: Unethical managers and auditors
– Short-run profit> long-run costs
• Regulations: Government, courts, standard setters
Pedagogical Technique Example: Student
Group Presentation Slide
Pedagogical Technique Example: Student
Group Executive Compensation Activity
Pedagogical Technique Example: Student
Group Activity Explanation (1)
Your group represents one of four groups:
• 1. CEO/Executive Team
• 2. Shareholders
• 3. Compensation Committee A
• 4. Compensation Committee B
• For the CEO/Executive and Shareholder Teams, your
goal is to persuade the compensation committee to
choose a compensation package that is most beneficial
to you.
• For the compensation committees, your goal is to
understand the arguments from the two sides and
decide a reasonable compensation package. (It does
not have to be right in the middle.)
Pedagogical Technique Example : Student
Group Activity Explanation (2)
• Two Rounds of Discussion
– 1st Round
• Compensation Team A and CEO/Executives
• Compensation Team B and Shareholders
– 2nd Round
• Compensation Team A and Shareholders
• Compensation Team B and CEO/Executives
Student Group Role Play: Scene One (1)
•Role play illustrating agency theory
– Lilian as Manager
– Lindy as Owner
Student Group: Scene One (2) –
The PERFORMANCE REVIEW
Student Group Role Play Setting (3):
HUGE LOSS!
Student Group slide illustrating how AGENCY
THEORY worked in the Role Play Example (4)
Pedagogical Techniques and Resources (3):
Ways of Increasing Student Motivation/Enrollment
Students participate in performance evaluations.
Students take turns leading the discussion
Students have to write “journals” on each reading
Discuss current issues in relation to course - big picture
Link to career functions and cases (Z. Swanson- AECM)
The course is a graduate-level course in our Master of Accounting
(MAcc) program. I changed the title from “Accounting Theory” to
“Emerging Accounting Issues” without changing content or
structure and enrollments increased.
• I find that introducing current articles into the discussions tends
to make the idea of accounting theory more meaningful.
•
•
•
•
•
•
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Techniques and Resources (4)
Performance Evaluation - Excerpt
Group Members:
Seminar Number:
Last four digits of your student number: Irene
Circle only one number
for each comment.
HOW EFFECTIVE WAS THE GROUP IN:
Poor
Excellent
|_____________________________________|
CONTENT OF SEMINAR:
1. Highlighting the main points of the readings through
seminar discussion, brief overview or summary?
2.
3.
1
Linking the seminar topics to
current business developments?
Using visual aids and/or handouts to provide
support and insight into today's topics?
1
1
2
3
4
5
2
3
4
5
2
3
4
5
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Techniques and Resources (5):
Other Techniques
• Means for tracking participation
• “Get Out of Jail Free”
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Techniques and Resources (6):
Selected Textbooks
Author
Country
GAAP
Focus
Schroeder, Clark,
Cathey (Wiley)
U.S.
U.S. /some
IFRS
Framework
Wolk, Dodd, Rozycki
(Sage)
U.S
U.S.
Framework
Scott (Prentice Hall)
Canada
IFRS/U.S.
Economic
Deegan (McGraw-Hill)
Australia/
Europe
IFRS
Mixed
Godfrey et al (Wiley)
Australia
IFRS/Aus
Mixed
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Techniques and Resources (7):
Selected Textbooks - Major Topics
Schroeder Wolk
Scott
Conceptual Framework
X
X
Uses of Accounting Info
X
X
X
Income Concepts/
Valuation Bases
X
X
X
XXX
XXX
F/S and A&L Topics
Regulation of
Financial Accounting
X
Deegan
Godfrey
X
X
XX
X
X
X
XXX
X
X
Social Responsibility
X
X
Behavioral Research
X
X
Critical Perspectives
X
Economic Theories
Int’l Accounting
X
X
XX
XX
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
X
Pedagogical Techniques and Resources (8):
Other Resources
• Wall Street Journal - instructor mailing list
–
http://ProfessorJournal.com
• AECM mailing list and archives (http://www.aecm.org)
• MAAW http://www.maaw.info/
• “Smartest Guys in the Room” video
• Accounting Horizons/Accounting Perspectives
• Senate Hearings
• IASB/FASB - discussion papers and roundtables
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Pedagogical Techniques and Resources ( 9):
Other Resources
• Annual testimony by Chairman of SEC,
PCAOB, and FASB to U.S. House of
Representatives.
• The Wall Street Journal
• Financial Times
• Lexis-Nexus
• Google Scholar
• FASB’s Accounting Standards Codification
• Larger CPA firms’ websites
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Strategies for Teaching the Accounting
Theory Course: Summary Points
• Very helpful as a complement to the rest of the
curriculum
– Cover “why” and judgment questions
– Big Picture
– Critical Thinking
• Content
– Lots of choice: conceptual framework, valuation
bases, controversies, current research; all of the above
• Assessment
– Can encompass presentations, debates, papers,
research, journals, experiments
• Range of resources available