aaa presentation final
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Strategies for Teaching
the Accounting Theory Course:Curriculum, Pedagogy and Resources
Carla Carnaghan - University of LethbridgeJames DoddDrake University
Irene Gordon - Simon Fraser University
David Gilbertson - Western Washington University
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Strategies for Teachingthe Accounting Theory CourseTopics to be discussed:
What do we mean by an accounting theorycourse?
Why we think a theory course is important
Roles for the accounting theory course in thecurriculum
Considerations in designing the course content Pedagogical techniques and resources
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What Do We Mean byAn 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 accountinglooks like it does, and the challenges of creatingaccounting standards and information givendiverse needs and stakeholders
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Why is a Theory Course Important? Increasing complexity of business transactions
More understanding of what accounting is trying to do isimportant
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, differentapproaches to accounting for intangibles
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Roles for the Accounting Theory Coursein 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
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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 financingAccounting Scandals
Management Compensation
Fair Values
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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
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Designing the Courses Content: What DoWe 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)
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Designing the Courses Content: What DoWe Want Students to Learn? My emphasis is on the development of accounting
standards using history as the starting point. Theidea is to understand how we got to where we arebefore starting the trip.
I emphasize likely future trends and how the studentsas professionals can find/support ways to account foreconomic transactions. The find/support leads to aresearch orientation to stay abreast of change.
I want students to develop empathy for differingpositions
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Designing the Courses 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 aboutunderlying assumptions
History of development of accounting thought can behelpful in explaining particular developments
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Designing the Courses Content:Concepts that Might be CoveredEconomics Psychology Critical ConceptualFramework
EfficientMarkets
BehavioralFinance
Ethics Relevance
InformationAsymmetry ProspectTheory Stakeholders Reliability
Agency Theory SatisficingHistory ofAccounting
ValuationBases
Earnings
Management
Attribution
TheoryStewardship
StandardsSetting
DecisionUsefulness
MarketFailures
ValuationBases
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Designing the Courses Content:Controversies that Might be CoveredTopic Econ Psych Critical Framewk
Fair Values X X X
Intangibles/Contingencies**
X X X
Market efficiency X X X X
Management Comp. X X X
Earnings Management** X X X X
IFRS Adoption X X
Derivatives/Shadow Economy**
X X X
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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
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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 therelationships among them. (See Simon, J. 2007. ConceptMapping in a Financial Accounting Theory Course.Accounting Education:
an International Journal. September. v. 16(3). 273-308)
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Pedagogical Techniques and Resources (3):Assignments and Projects A project comparing U.S. GAAP with IFRS and non-
IFRS standards with the goal of developing a beststandard by using components from around the
world. It requires review of academic and industryliterature, databases, and the political processesaffecting standards setting.
Research papers: Newspaper article about a businessand use accounting research to explain the situation
Requirement to organize and present seminarsexamples from student groups seminars
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Pedagogical Technique Example: SampleStudent Group Presentation - Experiment
Manager
Honest (H) Distort (D)
InvestorBuy (B) 60, 40 20, 80
Refuse to Buy
(R)35, 20 35, 30
Investor: to buy or not to buy Manager: Honest or Distort
Assumptions:
One-period game
Non-cooperative Rational Individuals
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Pedagogical Technique Example: SampleStudent Group Presentation - Debrief of theExperiment 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
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Pedagogical Technique Example: StudentGroup Presentation Slide
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Pedagogical Technique Example: StudentGroup Executive Compensation Activity
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Pedagogical Technique Example: StudentGroup 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, yourgoal is to persuade the compensation committee tochoose a compensation package that is most beneficial
to you. For the compensation committees, your goal is to
understand the arguments from the two sides anddecide a reasonable compensation package. (It doesnot have to be right in the middle.)
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Pedagogical Technique Example : StudentGroup 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
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Student Group Role Play: Scene One (1)Role play illustrating agency theory
Lilian as Manager Lindy as Owner
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Student Group: Scene One (2) The PERFORMANCE REVIEW
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Student Group Role Play Setting (3):HUGE LOSS!
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Student Group slide illustrating how AGENCYTHEORY worked in the Role Play Example (4)
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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 toEmerging Accounting Issues without changing content orstructure and enrollments increased.
I find that introducing current articles into the discussions tends
to make the idea of accounting theory more meaningful.
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Pedagogical Techniques and Resources (4)Performance Evaluation - ExcerptGroup Members:Seminar Number:Last four digits of your student number: Irene
Circle only one numberHOW EFFECTIVE WAS THE GROUP IN: for each comment.
PoorExcellent
|_____________________________________|CONTENT OF SEMINAR:1. Highlighting the main points of the readings through
seminar discussion, brief overview or summary? 1 2 3 4 5
2. Linking the seminar topics tocurrent business developments? 1 2 3 4 5
3. Using visual aids and/or handouts to providesupport and insight into today's topics? 1 2 3 4 5
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Pedagogical Techniques and Resources (5):Other Techniques Means for tracking participation
Get Out of Jail Free
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Pedagogical Techniques and Resources (6):Selected TextbooksAuthor Country GAAP Focus
Schroeder, Clark,Cathey (Wiley) U.S.
U.S. /someIFRS
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
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Pedagogical Techniques and Resources (7):Selected Textbooks - Major Topics
Strategies for Teaching the Accounting Theory Course - AAA Annual Meeting. San Francisco. August 4, 2010
Schroeder Wolk Scott Deegan GodfreyConceptual Framework X X X X
Uses of Accounting Info X X X
Income Concepts/Valuation Bases
X X X XX
F/S and A&L Topics XXX XXX X
Regulation ofFinancial Accounting
X X X
Economic Theories XXX X X
Social Responsibility X X
Behavioral Research X X
Critical Perspectives X
Intl Accounting X X XX XX X
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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
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Pedagogical Techniques and Resources ( 9):Other Resources Annual testimony by Chairman of SEC,
PCAOB, and FASB to U.S. House ofRepresentatives.
The Wall Street Journal Financial Times
Lexis-Nexus
Google Scholar FASBs Accounting Standards Codification
Larger CPA firms websites
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Strategies for Teaching the AccountingTheory 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, valuationbases, controversies, current research; all of the above
Assessment Can encompass presentations, debates, papers,
research, journals, experiments
Range of resources available