An Active Learning Approach to Teaching Variance Analysis to Accounting Students.

Introduction This paper looks at an activity that incorporates active learning by breaking the traditional classroom teaching pattern (where students can be content to be reluctant, quiet, inactive participants in the learning process), with an activity that is usually a new experience for many students: letting students create and solve their own problems. This activity can be done within a problem structure format for several topics, but the focus for this paper is on standard costing variance analysis, a sometimes difficult topic for principles of accounting students. The reason active learning is beneficial in this approach is that it simulates the implementation and analyzation of standard costing by businesses in the real world such that students better synthesize the goals of standard costing and how the variances generated achieve these goals. The problem structure in the standard costing format also shows students that 'accounting' is not just about numbers but, more importantly, about frameworks or systems that are designed to handle whatever numbers might come along. In addition, an example from using this active learning approach in a principles of accounting class is presented. Active Learning Literature Review Active Learning encourages student input into the learning process. Being engaged in the topic under discussion not only helps students be more interwoven into the learning process, it also allows students to learn from each other as well as from the person teaching the class. Springer and Borthick (2004) found that students used higher-level thinking skills in the introductory accounting course when working with business simulations they designed. Douglas (2012) found that active engagement by students facilitated their understanding of business law about how a problem unfolds into the various phases of its resolution. Matherly and Burney (2013) found that not only did active learning increase student participation, it also improved students' attitude towards managerial accounting topics in the class that was analyzed in their study. Since active learning focuses on learner-centered instruction and allows for individual differences in learning styles (Strage, 2008), active learning strategies have proven superior to the static lecture-based classroom approach (Burns, Pierson, and Reddy, 2014). For example, Pinder (2013) found that students' knowledge and ability to understand the subject matter increased with active learning. And, Cavanagh (2011) found that all respondents in his study agreed that active learning had helped them maintain interest and attention in the sessions under study. Limbach and Waugh (2010) found that active learning can not only encourage students to engage their higher-level thinking skills, it can also make a course more enjoyable for students (and the professor). In addition, the Accounting Education Change Commission (1990) encouraged that there not only be a focus on teaching the basic concepts, but that there also should be a focus on applying the concepts to the real world. Active learning can be accomplished in many ways. Phillips (2005) lists more than 20 strategies for active learning, including short writing assignments, debates in class (or online), and the use of clickers. The problem structure in the standard costing format in this paper similarly allows students to better model the real-world whereby a business chooses to use standard costing procedures, sets the standards and then measures the variances with actual results for the business. Learning Objective The learning objective for this active learning approach to teaching standard costs is to allow students to feel that they have more control over their learning environment than is allowed by working a predetermined problem presented in a textbook. One of the first statements students hear when learning about standard costs is that no one requires a business to implement a standard costing system - Rather, businesses choose to impose a standard costing system upon themselves for purposes of control. …