bluuebunny/crossref_metadata_2025 huggingface dataset:
The Impact of Task Information Feedback on Ethical Reasoning
Authors: Massey Dawn W. , Thorne Linda
Published: April 2008

This study investigates whether task information feedback (TIF) promotes 84 auditors' and accounting students' use of higher ethical reasoning, thereby increasing their tendency to consider the public interest in the resolution of ethical dilemmas. TIF is a type of feedback in which subjects are provided with guidance about the cognitive decision-making process they should use. In our experiment, subjects used higher ethical reasoning to resolve audit dilemmas after receiving TIF than they did before receiving TIF. Accordingly, our findings suggest that TIF is effective in promoting higher ethical reasoning and thus increasing the tendency of practicing and aspiring auditors to consider the public interest when resolving ethical dilemmas.
The Impact of Compensation Level and Context on Income Reporting Behavior in the Laboratory
Authors: Trivedi Viswanath Umashanker , Chung Janne O. Y.
Published: April 2008

This study examines two methodological issues in judgment and decisionmaking studies in accounting—compensation level and context—using an income reporting task. Previous research has not examined the joint effect of compensation level and context. Further, findings in previous research about these two variables may not extend to specific contexts such as an income reporting context. Specifically, the study examines the effect of different levels of compensation (including zero and very high values) on participants' income reporting behavior in the laboratory. It also examines whether the use of tax-specific instructions results in differences in income reporting behavior compared to the use of context-free instructions. The study predicts that compensation level should not affect reporting income levels when the treatment is tax-specific due to the influence of social norms. The study also makes predictions based on expected utility theory in the context-fee treatment. An experimental study was carried out in India using college students that manipulated two types of context (tax-specific and context-free) and six levels of compensation, including no compensation, grouped into three levels: Low, Medium, and High. The results show that compensation levels did not affect participants' income reporting behavior in the taxspecific treatment but in the context-free treatment, participants' income reporting behavior was negatively affected by the introduction of adequate compensation.
Strategy, Choice of Performance Measures, and Performance
Authors: Stede Wim A. Van der , Chow Chee W. , Lin Thomas W.
Published: April 2008

We examine the relationship between quality-based manufacturing strategy and the use of different types of performance measures, as well as their separate and joint effects on performance. A key part of our investigation is the distinction between financial and both objective and subjective nonfinancial measures. Our results support the view that performance measurement diversity benefits performance as we find that, regardless of strategy, firms with more extensive performance measurement systems—especially those that include objective and subjective nonfinancial measures—have higher performance. But our findings also partly support the view that the strategy-measurement “fit” affects performance. We find that firms that emphasize quality in manufacturing use more of both objective and subjective nonfinancial measures. However, there is only a positive effect on performance from pairing a qualitybased manufacturing strategy with extensive use of subjective measures, but not with objective nonfinancial measures.
An Examination of Convergent Validity between In-Lab and Out-of-Lab Internet-Based Experimental Accounting Research
Authors: Alexander Raquel Meyer , Blay Allen D. , Hurtt R. Kathy
Published: April 2008

Although behavioral research is increasingly relying upon the Internet for data collection, few Internet-based experimental accounting studies have been published. Bryant et al. (2004) discuss the advantages and disadvantages of Internet-based research and conclude that experimental validity poses the largest potential concern. One explanation for the scarcity of Internet-based accounting studies may be that accounting researchers find experimental validity concerns outweigh the benefits of Internet data collection. Krantz and Dalal (2000) report that Internet psychology experiments produce results similar to laboratory findings. However, experimental economics researchers find that results differ between Internet- and lab-based settings. In this paper, we examine convergent validity between in-lab and out-of-lab data collection with professional accountant participants. Using data from an Internet-based accounting experiment, we test convergent validity on those variables observed to interact with experimental delivery method (in-lab or out-of-lab) in prior research. Our results are consistent with that of the psychology literature. Specifically, no statistically significant interaction is reported between experimental delivery method and the independent variables or the demographic measures. We discuss factors contributing to this result and the implications for future behavioral accounting research.
An Anticipatory Case for Managing Teams and Team Projects
Authors: McConnell Cheryl A. , Sasse Craig M.
Published: April 2008

Accounting faculty can address problems associated with team development and group activities by using an anticipatory case exercise at the beginning of the course. The anticipatory case is a four-part case that engages students in a discussion of the potential problems of managing teams and team projects. The case describes the personal characteristics and behaviors of a fictitious team of students at three stages of a team project; the teacher then presents students with a set of discussion questions at the conclusion of each case part. This case is one way to discourage negative team development behaviors at the outset of the course. Importantly, the anticipatory case facilitates team development by (1) identifying potential project management or team process problems, (2) alerting students to expectations in terms of team behaviors and project grading, and (3) allowing student teams to get to know each other better and to set formal rules of engagement for their own team process.
An Instructional Case in the Ethics of Accounting Disclosures: Springfield Medical Center
Authors: Jennings James P. , Henry Eleanor G.
Published: April 2008

This instructional case considers the ethical issues in an actual legal case involving a Big 8 firm and a management consulting engagement. The engagement included the oversight of a forecast and an attestation service for the registration statement in an initial public offering. The objectives of the case are: to present an agency framework for the examination of ethical issues; to illuminate the obligations of full disclosure, the exercise of due care and the state of independence; to consider an ethical basis for the “deep-pockets” theory; and to provide a vehicle for ethical reasoning by students. The case is directed to a financial accounting course at the M.B.A. level, a professional development course or an upper-division undergraduate course.
Accounting for Divestitures: A Comparison of Sell-Offs, Spin-Offs, Split-Offs, and Split-Ups
Authors: Cumming John , Mallie Tina Y.
Published: April 2008

In the 1990s, the financial press has frequently announced corporate spin-offs and split-offs. Financial accounting textbooks, though, contain little or no coverage of spin-offs, split-offs and other types of divestitures. This paper discusses the reasons for divestitures, identifies four types of divestitures, describes the characteristics and common conditions associated with each type, reviews the accounting standards and federal income tax rules and regulations pertaining to each type, illustrates the application of the accounting standards for each type and discusses the potential impact of these accounting standards and tax rules and regulations on a corporation's choice of one type of divestiture over another. As such, this paper may be used as a supplement in an upper-division financial accounting course.
Instructional Case: Worldwide Shipping Corporation Ltd: Early or Late Adoption of a New International Accounting Standard?
Authors: Lee Peter , Tan Pearl
Published: April 2008

The management of Worldwide Shipping Corporation Ltd (hereafter “Worldwide Shipping”) is confronted with a dilemma when a new international accounting standard on leases is introduced which contains a transitional provision allowing firms to defer implementation for a period of four years. Students are required to put themselves in the position of managers who have to weigh the adverse impact of early adoption of the new accounting standard against a responsibility for fair financial reporting. Worldwide Shipping is a multifaceted case that can be used as an accounting case study or a financial analysis study. The objectives of the case are threefold. First, it aims to provide students with a better understanding of the impact of off-balance sheet transactions (in this case, sale-leaseback contracts) on a firm's financial statements. Second, it requires students to examine implications of accounting choice on management compensation and debt-contracting costs, as well as the perplexing problem of recognition in financial statements vs. footnote disclosures. By putting students in the position of managers, the case increases students' awareness of the possible economic consequences arising from accounting choice. Third, it provides students with a useful exercise in the mechanics of effecting a change in accounting method using the retroactive method.
Information Systems Controls and Auditing: Mathra Tool, Inc.
Authors: Splettstoesser Ingrid B.
Published: April 2008

Mathra Tool, Inc. (MTI) is a small business manufacturing case. It can be used by undergraduate or graduate students studying management controls and auditing in a computerized setting. Students integrate accounting, auditing, and information systems concepts. They identify and assess controls to set detection risk and suggest the nature, extent and timing of detailed tests for generalized audit software. They then prioritize weaknesses in internal control, separating reportable conditions from other improvements.

MTI is particularly topical, in the light of SAS No. 80, Amendment to Statement on Auditing Standards No. 31, Evidential Matter, effective for financial statements beginning on or after January 1, 1997. This SAS recognizes that both electronic and paper evidence needs to be considered when conducting risk assessments and during the evidence-gathering process. Instructors can discuss concepts of activity-based costing (due to inappropriate overhead application) and additional types of EDI beyond the stand-alone EDI method used by MTI.
A Course Survey of Financial Statement Analysis
Authors: Koehn Jo Lynne , Hallam Jolene J.
Published: April 2008

This study reports survey results of the pervasiveness and attributes of Financial Statement Analysis (FSA) as both an undergraduate- and graduate-level course. The paper may be of interest to departments considering adding an FSA course to the curriculum. Demographic data of survey participants is provided as well as information regarding motivations for offering the course, classroom materials, instructional methods and topic analysis. The paper also includes descriptions of model assignments and teaching innovations.
Instructional Case: General Host: Accounting for a Bond Refunding
Authors: Mohrman Mary Beth
Published: April 2008

This assignment, which involves accounting for a simple bond refunding, achieves several objectives. First, it reinforces basic concepts in bond accounting, such as cash flows, book values, interest expense and gains/losses from early extinguishment. Second, it leads students to critically analyze an article from the popular business press. Third, it illustrates many important issues in financial accounting, such as earnings management, the relationship between earnings and stock prices, and economic consequences. Students are asked to read “Paper Money” from Forbes' “Numbers Game” column. The article describes General Host's bond exchange offer and questions the recognition of a gain in such circumstances. The case assignment requires students to carefully analyze the bond exchange and to question many of the authors' assumptions about the economic impacts of the exchange offer. I have used this case successfully in undergraduate intermediate accounting classes and in an introductory financial accounting course for M.B.A. students.
Instructional Case: Lakeview Lumber, Inc.: A Study of Auditing Issues Related to Fraud, Materiality and Professional Judgment
Authors: Lindberg Deborah L.
Published: April 2008

Lakeview Lumber, Inc. involves several auditing and accounting issues, including concepts related to Statement on Auditing Standards (SAS) No. 82, Consideration of Fraud in a Financial Statement Audit (AICPA 1997). The case highlights management's potential motivation to manipulate net income in response to a bonus compensation scheme. Lakeview Lumber also provides a framework for discussion of issues related to professional judgment, audit supervision and materiality. More specifically, the case emphasizes the professional judgment required in the estimation of selected account balances and in determining the accounting treatment of transactions related to unusual or extraordinary events. The concept of materiality, in conjunction with the interpretation and application of professional standards, is also discussed. In addition, the case gives students an opportunity to perform analytical review, prepare common-size statements and use the Internet to find professional pronouncements and financial information.
Implementation of a Serial-Case Pedagogy in the Introductory Managerial Accounting Course
Authors: Adams Steven J. , Lea Richard B. , Harston Mary E.
Published: April 2008

The accounting profession and the business community have called for academics to place more emphasis on presenting accounting to students in an economic-decision context. In response to that call, California State University, Chico (CSU, Chico) applied for and received in 1992 a Fund for the Improvement of Post-Secondary Education (FIPSE) grant to reengineer its introductory accounting curriculum. This paper describes a serial case, created as part of the grant, that introduces a user, decision-making approach into the second semester course that emphasizes managerial accounting. Specifically, the paper defines what is meant by a serial case, then provides an overview of the case, the California Car Company (CCC), a hypothetical manufacturer of electric-powered vehicles. The paper then depicts the types of decisions addressed and accounting information employed by CCC. Issues related to the implementation of the serial case are also discussed. The paper concludes with a discussion of assessment data that document student reactions to the case. Experience with the serial case suggests that it may be a powerful tool for introducing students to business-decision problems and related accounting information.
Classroom Assessment: Educational and Research Opportunities
Authors: Harwood Elaine M. , Cohen Jeffrey R.
Published: April 2008

The objective of this paper is to demonstrate existing educational and research opportunities in the area of Classroom Assessment. Classroom Assessment is an ongoing process whereby professors and their students work together to collect accurate and timely information about what students are learning in a particular subject. The raison d'e^tre of Classroom Assessment is to discover what potentially can and should be done to improve student learning, thereby developing the talents of both professors and students. This paper provides an extensive review of the literature and a discussion of the process of Classroom Assessment, tailored to the needs of accounting professors. Thus, this paper provides the tools by which accounting professors can take advantage of both the educational and research opportunities.

The theoretical basis and motivation for Classroom Assessment, together with the shared excitement of those who use it, provide strong reason to believe that Classroom Assessment has the potential to improve accounting education. Recent and continuing efforts to improve accounting education give accounting professors both the motivation and comparative advantage they need to make significant contributions to an emerging area of research in Classroom Assessment. This paper calls for greater care when following the process of Classroom Assessment and when designing experiments to increase our understanding of it.
Comptronix, Inc.: An Audit Case Involving Fraud
Authors: Boockholdt James L.
Published: April 2008

Comptronix, Inc. was a high-technology company founded in 1984. It grew rapidly and by 1993 employed 1,700 people in three operating locations. The company went public in 1989, listing its stock with NASDAQ. The stock received consistent “buy” recommendations from brokerage firms until 1992, when its Board of Directors disclosed a fraud perpetrated by three of its officers. They had manipulated accounting records in order to overstate Comptronix's earnings for 1989–1991.

This case is intended for use in an auditing class. It describes a method of perpetrating the fraud allegedly used by the officers and includes financial data for the company and its competitors. Students are asked to identify audit procedures that would have detected the fraud and suggest conditions that should have alerted the auditor. Finally, students are asked to research a high-technology company of their choice, looking for similar conditions.
Using Experimental Asset Markets to Illustrate the Value of Auditing
Authors: Boylan Scott J.
Published: April 2008

This article provides a description of (and guidance for implementing) a classroom exercise in which experimental asset markets are used to illustrate the economic impact that auditing can have on a market economy and its participants. In particular, the exercise entails creating two actual microeconomies in the classroom. In one microeconomy, participants produce, trade, and consume generic assets in an environment in which the underlying asset quality is not readily observable to consumers. In the second microeconomy, there is one principal difference: asset quality is verified via an independent audit, and the results are reported to the marketplace. Comparison of the two microeconomies allows students and instructors to identify, measure, and explain the impact of auditing on individual decisions, individual profits, and overall market performance. The exercise can serve as a platform for classroom discussion on a variety of topics pertaining to the value of auditing in a market economy. As such, the exercise provides a useful introduction to and motivation for a course in auditing.
Estimating Transactions Given Balance Sheets and an Income Statement
Authors: Arya Anil , Fellingham John C. , Schroeder Douglas A.
Published: April 2008

One way to develop an appreciation for the power and beauty of doubleentry is to derive consistent transaction vectors, i.e., start with financial statements and derive the transaction amounts that could have generated the statements. Working backward to uncover transactions (the inverting exercise) complements the more traditional approach of working forward from transactions to financial statements. In addition, the approach highlights a fundamental accounting activity: aggregation. Financial statements summarize a firm's transactions using only a relatively small number of account balances. A consequence of aggregation is that there are infinite consistent transaction vectors. However, because these infinite solutions are all prepared in accordance with double-entry, they are linked to each other in a systematic fashion. We show how a directed graph representation of the accounting system can be used as a parsimonious means of characterizing all consistent transaction vectors. As the number of accounts and transactions are increased, the inverting exercise becomes tedious if one does not make use of the directed graph. To emphasize this point, the inverting exercise is conducted using a set of published financial statements. We also discuss the issue of picking the most likely transaction vector from the set of consistent transaction vectors. The authors have used this note in undergraduate, M.B.A., and Ph.D. classes. For the Ph.D. class, the note has been supplemented by the more rigorous analyses in the linear algebra literature and the accounting literature.
Wilson Electronics (A) and (B): An ABC Capstone Experience
Authors: Brewer Peter C. , Campbell Robert J. , McClure Richard H.
Published: April 2008

This case is designed to provide students with an activity-based costing (ABC) capstone experience that addresses the following topics: (1) applying resource usage and resource spending concepts to support “what-if” decision making; (2) using ABC product cost information to support strategic product mix decision making; (3) using ABC process cost information to support process improvement decision making; and (4) using ABC information in conjunction with the theory of constraints (TOC) to support revenue growth-oriented modes of analysis when making decisions. The case is partitioned into (A) and (B) versions to enable greater flexibility from a teaching perspective. More specifically, the (A) case focuses on the resource usage vs. resource spending portion of the analysis. The (B) case expands the analysis to address the full range of topics mentioned above.
Riverfest: Managing Risk and Measuring Performance at Little Rock's Annual Music and Arts Festival
Authors: Ballou Brian , Godwin Norman H. , Tilbury Van
Published: April 2008

This case is based on the experience of one of the authors as executive director of Riverfest, Arkansas' largest annual music and arts festival, held in Little Rock on Memorial Day weekend. The case provides an opportunity to identify business process risks, evaluate and consider improvements to controls for those risks, and develop ways to measure elements of Riverfest's operations that can help improve or monitor the organization's performance. This case demonstrates how managing business risks and measuring business performance are critical for all types of organizations, including those not driven by profitability objectives. The case centers on Merle Flowers, a CPA who specializes in business process measurement and risk management for major events. Merle has been hired to provide Riverfest with suggestions on how to improve risk management and performance measurement for its key processes, including entertainment, cash management and security, sponsorship arrangements, vendor and beverage arrangements, physical security, and budgeting and reporting. This engagement is a value-added service that Merle is providing Riverfest, which has been successful in the past but is looking for continuous improvement opportunities in the future.
Service-Learning Outcomes: Guidelines for Educators and Researchers
Authors: Rama Dasaratha V. , Ravenscroft Sue P. , Wolcott Susan K. , Zlotkowski Edward
Published: April 2008

The purpose of this paper is to survey, organize, and evaluate extant research on service-learning to provide guidance to both educators and researchers. Because little has been written about service-learning in academic accounting, the research cited comes primarily from other disciplines. Our literature survey is divided into two sections: (1) student outcomes related to intellectual skills, and (2) student personal outcomes. After surveying the literature, we synthesize the results to offer guidance for educators interested in using service-learning and make suggestions for how accounting researchers could contribute to the literature regarding the student outcomes of service-learning. In addition, to illustrate our recommendations for educators, we provide examples of desired outcomes and assessment criteria for several accounting service-learning projects.
Behavioral Research in Auditing and Its Impact on Audit Education
Authors: Knechel W. Robert
Published: April 2008

Auditing is inherently a judgment process. In the past 25 years a large body of research related to auditor judgment has raised numerous issues about the manner in which audits are performed and the nature of education and training that is appropriate for individuals entering the profession. Current trends in auditing away from overly structured methods to more subjective, risk-based approaches exacerbate the judgment demands placed on auditors and make it increasingly more critical that issues of auditor judgment and decision making be integrated into audit education. The need for auditing students to be exposed to a breadth of substantive business and accounting topics is more pronounced than ever before. Auditors do not merely dwell in a world of debits and credits, but rather must deal with the more challenging issues of risks, controls, performance measurement, and audit evidence. To rise to these challenges, new graduates need to develop skills in critical reasoning, information search, interpersonal interaction, communication, and decision making. When I started teaching auditing 20 years ago, I approached the topic from a highly structured and quantitative viewpoint. In recent years, I have come to realize that the judgmental, decision-making aspects of auditing are critical. Auditing courses may be best suited to facilitate the development of necessary analytical skills by embracing current trends in audit practice and exposing students to complex, realistic, and interactive learning exercises such as cases, role playing, debates, online exercises, and classroom presentations that reflect the challenges of the dynamic environment of auditing in 2000 and beyond.
The Role of Behavioral Research in Management Accounting Education in the 21st Century
Authors: Birnberg Jacob G.
Published: April 2008

Behavioral accounting research (BAR) has a long history in management accounting. It has not had as significant a presence in the management accounting courses. It has tended to be relegated to the responsibility accounting chapter in textbooks. Thus, the extent to which behavioral materials appeared in a course depended on the interests of the instructor. It can safely be described as a matter of taste. In this paper the history of management accounting dating back to the end of World War II is divided into three periods. In each period, the extent of behavioral materials in the management accounting curriculum is reviewed. These periods, called the “cost accounting,” “modern management accounting,” and “postmodern management accounting” periods, reflect increasing emphasis on behavioral materials in the management accounting courses. The paper focuses on the reasons why the demand for behavioral material in the management accounting curriculum is likely to increase and offers conjectures about what form those materials will take. It is, implicitly, also a call for research on the issues discussed here.
The Myers-Briggs Type Indicator and Applications to Accounting Education and Research
Authors: Wheeler Patrick
Published: April 2008

Many of the challenges facing the accounting profession involve personality characteristics of accountants. Personality theories have generated a rich research stream outside accounting and are widely applied in other disciplines and professions. Yet little research using these theories has been done in accounting. To redress this imbalance, this paper examines Jungian personality-type psychology—one of the main personality theories—and the major psychometric instrument that has arisen from it—the Myers-Briggs Type Indicator (MBTI). The MBTI has been extensively tested for reliability and validity, and used in a large number of basic and education research studies. Results from reliability and validity testing indicate that the MBTI reliably measures personality characteristics predicted by Jungian theory. A small amount of published research has been conducted in accounting using the MBTI. These 16 articles are reviewed, with suggestions for additional research.
Pecos Products: A Project Introducing Complexity into the Study of Activity-Based Costing
Authors: Platt David E. , Towry Kristy L.
Published: April 2008

This case is designed to help students gain a more thorough understanding of activity-based costing (ABC) than is usually obtained in introductory managerial accounting courses. If you have taken such a course, you have probably seen, in general, simple examples of activity-based costing. However, ABC can be more complex than these examples indicate for three reasons: (1) the mechanics of ABC are far more complex than these simple examples indicate; (2) many of the design choices required in an ABC system, which are critical to the cost-benefit decision, are omitted from the simple examples; and (3) without adequate detail, it is hard to see how economic consequences arise from the choice of costing systems.

The Pecos Products ABC Design Project (the “project”) addresses these issues by providing a hypothetical company with a detailed business scenario and asking you to help with the cost-system-design decision. To accomplish this, you will have to think about traditional cost system and ABC design issues, delve deeply into the cost system mechanics, and evaluate the benefits (economic consequences) of an ABC system in light of the cost and effort required to create it.
Activity-Based Costing in the Service Sector: The Buckeye National Bank
Authors: Bamber Linda Smith , Hughes K. E.
Published: April 2008

The U.S. Bureau of the Census projects that by 2006, the service sector will employ 74 percent of the workforce. This case illustrates why a major segment of the service sector—banks—needs accurate cost information to make strategic decisions, and how more refined accounting systems help fulfill this need.

Buckeye National Bank is a hypothetical bank that has suffered falling profits despite a shift in customer base toward retail customers, which the current information system reports are more profitable than business customers. Following a step-by-step approach, you will develop the Bank's average cost of serving a retail customer account and a business customer account, under (1) the Bank's traditional single allocation base system, and (2) a (pilot test) activity-based costing system. You will analyze these results to determine how and why costs reported by the activity-based system differ from the costs reported by the traditional system, and what this difference means for the Bank's business strategy. Finally, you will consider how the Bank's managers can use the new, more refined activity-based cost data in strategic decision making, including controlling costs and developing more profitable business strategies.
Cendant Corp.: A Case Study Examining the Compensation and Accounting Issues Involved in a Stock-Option Repricing Program
Authors: Vogel Thomas J.
Published: April 2008

Stock options are usually issued to corporate executives in an attempt to align the interests of those individuals with the interests of the company's shareholders. The options are designed to provide a large payoff to the executives when the company's stock price increases substantially above the exercise price of the options. However, in those periods when a company performs poorly, its stock price may decrease to a level below the exercise price of outstanding options. When this occurs, the options are said to be “underwater.” Because options provide a benefit only as the stock price increases, underwater options will often lack the motivational incentive that they were designed to create. This creates a dilemma to the compensation committee of the company—i.e., modify the compensation agreements of the individuals in charge during the period of poor stock price performance or risk losing those executives to other companies. One such modification that is often considered in these circumstances is a stock-option repricing program. Here, underwater stock options are exchanged for new options containing a lower exercise price. These programs experienced increased popularity during the 1990s despite the opposition that arose from critics who claimed that repricing programs “rewarda” executives for poor performance. This instructional case requires students to evaluate the appropriateness of a stock-option repricing program for the executives and other employees of Cendant Corp. This company experienced a severe decrease in its stock price during 1998 as a result of many factors including an accounting scandal, failed expansion efforts, and poor market conditions. In addition, the case material can also be used to introduce students to the accounting implications of stock-option repricing programs as modified by Interpretation No. 44, issued by the Financial Accounting Standards Board in March 2000.
Norwood Office Supplies, Inc.: A Teaching Case to Integrate Computer-Assisted uditing Techniques into the Auditing Course
Authors: Gelinas Ulric J. , Levy Elliott S. , Thibodeau Jay C.
Published: April 2008

This case presents an introduction to using computer-assisted auditing techniques (CAATs). Specifically, this case integrates ACL audit software into the financial-statement auditing class. The case has three assignments. In assignment #1, you will walk through an interactive exercise that introduces the basics of the ACL software package. Assignment #2 introduces you to the audit context. The client, Norwood Office Supplies, Inc., operates in the highly competitive retail office supplies industry. In this assignment, you will be required to first identify business/operational and financial-reporting audit risks and then recommend audit procedures that can address such risks using the ACL software. You will then be asked to identify issues that may lead to opportunities for providing the client with different types of assurance and consulting services. In assignment #3, you are required to execute the audit procedures using ACL. While the authors created the data for the case, the audit context is a realistic portrayal of the highly competitive office supplies industry.
Developing Student Abilities to Recognize Risk Factors: A Series of Scenarios
Authors: Strand Carolyn A. , Welch Sandra T. , Holmes Sarah A. , Judd Steven L.
Published: April 2008

Misappropriation of assets is an expensive and growing problem. However, detecting this type of fraud is very difficult. Green and Calderon (1996) claim that externally observable risk factors can help signal the likelihood of fraud. Awareness and timely recognition of these “red flags” might improve an individual's ability to assess the potential vulnerability of an organization to fraud. Contained herein is a case consisting of five scenarios that deal with the risk factors identified in Statement on Auditing Standards (SAS) No. 82, Consideration of Fraud in a Financial Statement Audit (AICPA 1997). Throughout the case, you will be confronted with a number of clues that may suggest employee wrongdoing. This case is designed to help you develop your knowledge and professional skill regarding the recognition of fraud risk factors. Although textbooks, and other sources, frequently list various risk factors, these same clues may not be as obvious to you when they actually occur in an organization.
Outcome Assessment of a Writing-Skill Improvement Initiative: Results and Methodological Implications
Authors: Ashbaugh Hollis , Johnstone Karla M. , Warfield Terry D.
Published: April 2008

This paper reports the outcome assessment of our accounting department's writing-skill improvement initiative. We employ complementary experimental designs to examine the effects of professionally relevant writing experiences on accounting students' writing-skill development. Using a between-subjects experimental design, we compare the writing skills of accounting students who participated in our writing initiative with the writing skills of other business students who did not participate. Using a within-subjects experimental design, we track improvements of accounting students' writing skills over time. Results from both outcome assessment methodologies indicate that accounting students' writing skills improve as students participate in our writing initiative. This paper provides insight into the features of a successful writing initiative and offers methodological suggestions for conducting outcome assessments of writing initiatives.
New Accounting Scholars's Publications in Accounting and Nonaccounting Journals
Authors: Christensen Anne L. , Finger Catherine A. , Latham Claire K.
Published: April 2008

Publications in nonaccounting journals are commonly omitted in accounting faculty productivity studies, and we examine whether that omission matters. We use samples consisting of two groups of new scholars who received an accounting Ph.D. (1987/88 and 1977/78 graduates) and took tenure-track positions at U.S. universities. We combine data from multiple databases to obtain an extensive list of research publications pertaining to these individuals.

During the first seven employment years, the 87/88 (77/78) Ph.D. sample published, on average, 1.95 (1.55) total research articles per scholar, including 1.38 (1.15) articles appearing in accounting journals. These findings suggest that new scholars commonly use nonaccounting journals as publication outlets, and that publication counts increase substantially when publications in both nonaccounting and accounting journals are considered. In addition, the 87/88 scholars published in nonaccounting journals more often than did the 77/78 scholars. Finally, publications in nonaccounting journals occur somewhat later in accounting scholars' careers.
General Electric: Investment Accounting and Consolidations
Authors: Blacconiere Walter G. , Hopkins Patrick E.
Published: April 2008

General Electric Company (GE) is a large, diversified corporation with hundreds of subsidiaries. As of December 31, 2000, GE had total consolidated assets of over $437 billion and a market capitalization of approximately $475 billion. This instructional case considers the use of GE's publicly reported financial statement data to illustrate the concepts and procedures related to (1) investment accounting under the equity method and (2) preparation of consolidated financial statements. In addition, the case highlights the effect of required consolidation on ratio analysis as well as the potential influence of accounting disclosure on investorsa' perceptions of firm value. Thus, this case should help you better understand the economic significance of relatively technical accounting procedures by analyzing their effects in a relevant, real-world setting.
Interstate Transport, Inc.: A Case Study in Earnings Management
Authors: Sack Robert J.
Published: April 2008

This case asks student teams to make a number of accounting decisions in the context of a single company. The decisions address the allowance for bad debts, inventory valuation, depreciation lives and methods, contingency provisions, and accounting for off-book entities. The case setting requires you to address those issues in an integrated way, and establish a rationale for the decisions required. The teamwork required illustrates the way differing personal judgments, regarding both facts and principles, enter into the determination of net income. Whether you mean to or not, your teams will be practicing “earnings management.”
TechMall.com: Revenue Recognition in the Internet Economy
Authors: Swain Monte R. , Allen Robert D. , Cottrell David M. , Pexton Kyle
Published: April 2008

This case will help you explore the impact of authoritative revenue recognition literature in the context of e-commerce. In addition to better understanding e-commerce companies, you will have the opportunity to consider important GAAP literature that significantly impacts the revenue recognition practices of numerous organizations. Further, you will gain an appreciation for the fact that decisions regarding revenue recognition policies must often be made in a setting of significant professional and personal pressure.
The Quality of Earnings in the Information Age
Authors: Clikeman Paul M.
Published: April 2008

Critics complain that the current accounting model is inadequate for measuring the performance and resources of knowledge-based companies because (1) expenses are not matched properly with related revenues, and (2) many important “assets” (e.g., patents, copyrights, brand names, employee expertise) are omitted from corporate balance sheets or, if reported, are valued at nominal amounts. The purpose of this exercise is to examine whether these criticisms are valid and discuss whether the current accounting model can be improved to better measure the performance and resources of information-age companies.
Grey Paints: Using Earnings Quality Concepts to Clarify the Earnings Measurement Process
Authors: Kreuze Jerry G. , Ruhl Jack M.
Published: April 2008

This case uses the concepts of earnings quality and earnings management to illustrate the inherent ambiguity in the earnings measurement process. Accounting students are often uncomfortable with ambiguity. Students want faculty to provide them with a single correct answer, such as the precise earnings for a given time period. Accounting textbooks rarely address this perception; we have yet to find a textbook that illustrates a range of acceptable amounts. This case demonstrates that earnings can be, and often are, ambiguous in the real world.
Using Expectancy Theory to Assess Group-Level Differences in Student Motivation: A Replication in the Russian Far East
Authors: Campbell Steven V. , Baronina Tatyana , Reider Barbara P.
Published: April 2008

We replicate and extend previous studies examining expectancy theory, accounting student motivation, and cultural differences (Harrell et al. 1985; Geiger and Cooper 1996; Geiger et al. 1998). Using a within-persons decision modeling approach, individuals from four Russian accounting student groups were analyzed to determine whether group subcultures affect individual motivation and effort decisions. We find significant differences across individuals in different groups regarding the relative influences of three potential motivators: improving overall grade-point average, increased personal satisfaction, and increased esteem within the group. Regarding the students' effort-level decisions, we find no evidence of group-level differences. Overall, our evidence indicates Russian accounting students tend to value expectancy over valence in making their effort decisions; however, this finding is, in part, due to gender differences.
The Five-Year Program Debate Continues: An Updated Analysis of the Supply of and Demand for Master's Degrees in Accounting
Authors: Miller Paul B. W.
Published: April 2008

This comment updates an analysis of the supply of, and demand for, accounting graduates that was published in 1996. This analysis shows that the imbalance between supply and demand continues. It also shows that the slight increases in supply of, and demand for, master's degrees has been accompanied by large decreases in the supply of, and demand for, bachelor's degrees. The data do not suggest that mandated five-year programs can be justified by a change in the demand for graduates.
Quality of Earnings: The Case of the Mobile and Ohio Railroad in the 19th Century
Authors: Samson William D. , Flesher Dale L. , Previts Gary John
Published: April 2008

The antebellum expansion of the corporate form of business to support the development of a railroad transportation network in the United States is a precursor to the types of reporting problems identified in the principal-agent literature of recent years. The case of the Mobile and Ohio Railroad, a major interstate carrier of the mid-19th century, demonstrates financial accounting and reporting issues that management and capital providers faced in evaluating company performance, especially in times of complex political and economic change, rapid technological advancement, and the hostilities of war.

Quality of earnings issues, studied in this early corporate circumstance, afford a rich comparative setting for discussion of similar contemporary situations. This case, complete with original data sets and information, supports instructional objectives that seek to increase your experiential base and understanding. This experiential approach serves to improve your abilities to identify and critically examine similar aspects of contemporary 21st century accounting challenges, including earnings management and the application of cash-flow-based performance measures, such as earnings before interest, tax, depreciation, and amortization (“EBITDA”).
Comment on: “The Five-Year Program Debate Continues: An Updated Analysis of the Supply of and Demand for Master's Degrees in Accounting”
Authors: Howard James A. , Lubich Bruce H.
Published: April 2008

This paper comments on Miller's update of his 1996 analysis of the supply and demand for accounting graduates. His claim that there continues to be an imbalance between supply and demand is shown to be an overestimate resulting from two factors: (1) not using the best data available and (2) limited definitions of those who demand accounting degrees and what qualifies as a Master's degree in accounting.
Creating Strategic Responses to Critical Risks Facing Accounting Education
Authors: Barsky Noah P. , Catanach Anthony H. , Kozlowski Bette M.
Published: April 2008

Recently many accounting programs have simultaneously faced declining enrollments and administrative/practitioner pressures to update curricula. Each of these issues requires accounting educators to carefully consider the strategic direction and operating structure of their programs. This paper illustrates how KPMG's Business Measurement Process (BMP) can be used to identify and manage the major risks affecting accounting education at the college and university level. It also demonstrates the BMP's usefulness in meeting the strategic-planning requirements of the AACSB's new, mission-based accreditation process. The BMP's holistic framework specifically focuses accounting educators on controllable risks and educational processes, and unmasks potentially hidden opportunities to deliver lasting, substantive, and effective curriculum change.
The Importance of Relevant Practical Experience among Accounting Faculty: An Empirical Analysis of Students' Perceptions
Authors: Mounce Patricia H. , Mauldin D. Shawn , Braun Robert L.
Published: April 2008

AACSB International maintains a requirement that accounting faculty, as a whole, should demonstrate relevant professional experience for academic units seeking separate accounting accreditation. This study examines student perceptions of the importance of relevant practical experience by using a two-phase method incorporating both a between-subjects design of an experiment and a survey in which participants ranked the importance of various faculty attributes. The results of the Phase One experiment indicate that professors possessing relevant practical experience were perceived by students to be of significantly higher quality than professors lacking relevant practical experience. Survey results in Phase Two, limited due to the method used, provide some degree of validation of the results found in Phase One.