Revising the Advanced Accounting Curriculum

A Review of the 2001 AAA
Innovation in Accounting Education Award

Why Change?

For more than a decade, academic and professional leaders have been calling for changes in the content and/or delivery of extant accounting courses. In particular, the leaders of our profession have stressed the need for educators to develop students’ critical thinking skills, rather than focus on technical rules. These professional leaders also recognize that achieving a shift in coverage in accounting courses also requires a shift in approach. Simply put, the traditional “lecture-memorize-test for content” approach has to go.

In addition to these calls for change in accounting education, the environment facing accounting educators has also changed. Accounting departments are being transformed into service departments for other majors as the number of students who choose to major in accounting decreases while the number of students who choose other majors, especially finance, increases.

In response to these factors, many academics have devoted their attention to revising courses such as introductory financial accounting, intermediate accounting, and managerial/cost accounting. However, based on our reviews of the literature, a handful of syllabi posted on the Internet, and all of the Advanced Accounting texts on the market, we found no evidence that anyone had revised Advanced Accounting in the last decade. Accordingly, we set out to redesign the Advanced Accounting course in order to adhere to the call of our profession’s leaders and, ultimately, to draw majors and non-majors alike to study accounting.

What Content Is Included?

To develop students’ critical thinking skills in Advanced Accounting, we emphasize

• the adequacy of current accounting treatment for various levels of investment, and
• accounting implications that are associated with investing in a global marketplace.

Topics included in our discussion of the adequacy of current accounting treatment for various levels of investment are

• the appropriateness of using fair-value accounting for small investments in other companies (financial instruments, 12% of class time),
• the accounting implications of larger investments that allow the investor to exercise “significant influence” on the investee (8% of class time), and
• theoretical consideration of the adequacy of current accounting treatment for business combinations and consolidations (18% of class time).

Topics covered in our discussion of accounting implications that are associated with investing in a global marketplace are

• derivatives (19% of class time),
• translation (12% of class time),
• hedging (10% of class time), and
• international accounting and reporting differences (21% of class time).

Which Delivery Techniques Are Used?

To cover these topics and to maintain the course’s focus on developing critical thinking skills, we use

• a custom-published textbook,
• active-learning techniques, and
• collaborative learning techniques.

Because no existing textbook suits our needs, we compile annually a custom-published textbook, A Critical Analysis of Advanced Accounting Issues, drawn from various publishers’ accounting texts, together with materials that have appeared in recent professional publications. Further, throughout the course, we supplement the text with real-time professional developments by posting course updates (current publications and/or Internet references) to our library’s electronic reserves system.

We include active-learning activities that are aimed at enabling the students to develop their oral communication skills. In addition to conducting the course as a seminar, we include two specific active-learning activities in the course: oral debates and international accounting presentations. For the debates, groups prepare to argue both sides of the controversy. The teams are assigned a particular position at the start of class by the flip of a coin. In the current semester, student teams will debate the following questions:

• Should liabilities be valued at fair value?
• Will discontinuing the pooling-of-interest method in the US affect merger and acquisition activity?
• Have the new derivative disclosures added to the usefulness of financial statements?

For the international presentations, students present for 30-45 minutes on the adequacy of the accounting practices in assigned foreign countries representing different types of economic systems. Students’ presentations must cover

• influences on the country’s accounting standards,
• the nature of the accounting profession in that country,
• the adequacy of the country’s accounting treatment for each of the course topics, and
• the country’s harmonization efforts.

We encourage extensive student involvement by using collaborative learning and by moving much of the procedural work outside the classroom. Students must still master the basic procedures, but those skills are honed using out-of-class group assignments.

Was the Change Successful?

The revised course has been well received by both students and faculty:

• 89 percent of students in the Autumn 2000 semester indicated that the course did an excellent or above average job of attaining its stated objectives;
• enrollment in the course has more than doubled since the first time the revised course was offered, even though the number of eligible students has stayed about the same;
• the number of accounting majors has risen by more than 50 percent; and
• the percentage of finance professors recommending that their majors take Advanced Accounting, and the percentage of seniors majoring in finance and minoring in accounting, increased from 23 to 33 percent.

Is This Approach for You?

Our revision of the Advanced Accounting course has three important features:

1. The approach is consistent with the calls to change accounting education.
2. The custom-published textbook is available for general adoption.
3. We’ve had great success at our university in using this approach.

The revised course uses active and collaborative learning techniques to focus on the development of students’ critical thinking skills. Accordingly, we believe that the approach we describe makes an important and noteworthy contribution to accounting education.

Dawn W. Massey, PhD (dmassey@mail.fairfield.edu)
and Joan Van Hise, PhD (jvanhise@mail.fairfield.edu)
are both at Fairfield University.