Congruence between entry-level accountants' required competencies and accounting textbooks.

Congruence between entry-level accountants' required competencies and accounting textbooks. INTRODUCTION Demand for accounting professionals has increased dramatically inthe wake of financial disasters at Enron, MCI WorldCom, Tyco, and ArthurAnderson. A survey conducted by the National Association of Colleges andEmployers published in the March 1, 2005, issue of the Wall StreetJournal, found that accounting is the number one major employers aredemanding in 2005. Additionally, the Bureau of Labor Statistics haspredicted nearly 400,000 new accounting jobs over the 10-year periodending in 2012. While there appears to be consensus that the demand for accountingmajors is on the rise, there is widespread concern that the gap betweencurrent accounting education and the needs of industry are widening.Industry leaders are encouraging accounting educators to adopt anaccounting curriculum that is more relevant and that focuses on realworld situations. Specifically, they are asking educators to provide agreater emphasis on higher-order cognitive skills, teamwork, use oftechnology, exposure to global and ethical issues, and communicationskills. Accounting textbooks have a major influence on most accountingcourses and the nature and type of learning activities used to prepareentry-level accountants (Davidson & Baldwin, 2005). There isevidence in the accounting literature that indicates accountinginstructors rely heavily on textbooks and end-of-chapter (EOC) materialsfor homework assignments and coverage of course content. Accordingly,the cognitive skill set of an accounting student is largely dependent onthe EOC materials contained in the prescribed text. If instructors rely heavily on EOC materials from the text and theEOC materials mostly address lower-order thinking skills, there issubstantial risk that mostly lower-level learning will occur. Thepurpose of this research is to evaluate the EOC materials in the leadingtext of five accounting disciplines on a variety of criteria that areimportant for success in the accounting profession. This paper examines the congruence between the end-of-chapter (EOC)materials in select accounting textbooks and the cognitive andbehavioral skills identified above. Specifically, the authors performeda systematic analysis of the leading text for Accounting InformationSystems (AIS), Auditing, Cost, Intermediate, and Tax Accounting todetermine the extent to which textbooks facilitate the move from thetransmittal of knowledge to the development of the higher-ordercognitive skills as well as the behavioral skills (e.g. communication,technology, etc). The next sections of the paper contain a review of theprofessional and academic literature. The research questions of thisstudy, the methodology and results sections appear next. The paperconcludes with the conclusion, limitations and suggestions for futureresearch. PROFESSIONAL LITERATURE REVIEW Almost two decades ago, the Accounting Education Change Commission(AECC) was created by the American Accounting Association (AAA) to serveas a catalyst to improve the academic preparation of future accountants.More specifically, the AECC's purpose was to move accountingeducation from the traditional transmittal of technical knowledge to thedevelopment of a "deep understanding of concepts and policies, aswell as developing skills and attitudes necessary for the successfulpractice of accounting" (Gainen & Locatelli, 1995). The initialphases of this movement included a composite of knowledge and skillsneeded by accounting graduates (AECC, 1990). Following the recommendations of the Bedford Committee Report (AAA,1986) and the Big 8 White Paper (Arthur Anderson et al., 1989), theskills identified by the AECC (1990) include, but are not limited to,intellectual, interpersonal, and communication. Intellectual skillscomprise the ability to think logically, solve unstructured problems,and the ability to identify ethical issues. Interpersonal skillsincorporate the ability to work with others in groups and the ability tointeract with culturally and diverse people. Communication skillsconsist of the ability to communicate both formally and informally inboth spoken and written form. The ability to apply research skills,report results, and use electronic sources of information also appearsas a form of communication. The American Institute of Certified Public Accountant's(AICPA) Core Competency Framework (AICPA, 2003) and theprofession's Uniform Certified Public Accountant (CPA) examinationrequirements (AICPA, 2002) provide additional evidence about theimportance of cognitive thinking and a well-developed skills set. TheCore Competency Framework (2003) includes, but is not limited to,research skills, communication, interaction, technology,problem-solving, and global perspective. The CPA exam requires theapplication of research and technology skills and the analysis,interpretation and communication of business information. Specifictechnology skills include the ability to access and use electronicdatabases, electronic spreadsheets and word processors (AICPA, 2002, p.2). Corporate America also spoke to accounting educators about the lackof accounting knowledge and skills (Siegel & Sorensen, 1994).Respondents to a survey co-sponsored by the Institute of ManagementAccountants (IMA) and the Financial Executives Institute (FEI) revealthat entry-level accountants lack solid communication skills. Theresults of the survey also reveal that accounting educators received a68 percent for teaching computer literacy and only a 47 percent forteaching team building skills. The AACSB integrated the competencies identified above, in the formof learning goals and objectives, into the accreditation Assurance ofLearning (AOL) standards (Standards) more than a decade ago. The AACSBidentifies the establishment of the learning goals and objectives as thefirst step in the assessment process (AACSB, 2003). Although theStandards specifically state the applicability of learning goals andobjectives to separate degree programs (AACSB, 2003, p. 59), thesenaturally flow through to the individual major (e.g. accounting,finance, etc.) and course levels where learning occurs. The Standards state that learning goals should extend beyondknowledge recall to include cognitive skills such as those found inBloom's (1956) classification of cognitive skills (i.e. analysis,synthesis, and evaluation) (AACSB, 2003). In addition to knowledge andcognitive skills, the Standards provide a list of skills that shouldappear among the list of goals and objectives (AACSB, 2003, p. 71-72).These skills include, but are not limited to, communication abilities,ethical understanding and reasoning abilities, analytical skills, use ofinformation technology, global environments, and group dynamics (AACSB,2003). ACADEMIC LITERATURE REVIEW Limited literature that evaluates whether the textbooks' EOCmaterials have kept pace with the demands of the accounting educationprofession exists. Davidson and Baldwin (2005) evaluate two chapters ofseveral Intermediate Accounting texts and Karns et al. (1983) evaluateEconomics principles texts. However, while both articles limit theirevaluation to the presentation of EOC materials that tap intoBloom's higher-order thinking skills, neither evaluates thecoverage of the softer skills (e.g. communication, technology, etc.)that appears in the EOC materials. Although Sullivan and Benke (1997) donot evaluate the cognitive skills of Bloom's taxonomy, they includea comparison of a few of the softer skills in 33 financial accountingprinciples texts. Bloom's taxonomy (1956), the most commonly accepted theory oflearning (Davidson & Baldwin, 2005), presents a progression oflearning processes. Knowledge and comprehension must occur first,followed by the application and analysis of comprehended knowledge, andfinally, synthesizing and evaluating material learned at the lowerlevels. Knowledge and comprehension are considered"lower-order" cognitive objectives with the remaining fourconsidered "higher-order" cognitive objectives (Gainen &Locatelli, 1995). Knowledge requires the recall or recognition of information whereascomprehension requires the restating, explaining, describing, and/ortranslating into one's own words. An example of the achievement atthe knowledge level includes the ability to define terms. Comprehensionincludes the ability to explain, in one's own words, a GAAP method(Gainen & Locatelli 1995). The application level is achieved by using knowledge to achieve acertain purpose (Gainen & Locatelli, 1995); for example, usingfirst-in, first-out to value ending inventory. Analysis requires"separating of the whole into parts to see relationships anddiscover the structure of an idea or concept" (Francis et al.,1995, p. 8) such as is required to analyze risk on a portfolioinvestment (Gainen & Locatelli, 1995). Synthesis requires thecombining of ideas from various sources to produce an original product;whereas evaluation requires the development of an opinion based on thefacts, information, etc. Davidson and Baldwin (2005) analyzed two chapters (revenuerecognition and accounting for investments) each from a set of 41Intermediate Accounting textbooks/editions over a period from 1934 to2001. Several authors' texts represented multiple editions; assuch, 21 different sets of authors appear in Davidson and Baldwin'sstudy. For descriptive purposes only and without any underlying a prioriassumptions, Davidson and Baldwin (2005) found significantly higherproportions of EOC materials at the comprehension, application andanalysis (18.5, 19.2, and 43.0 percent, respectively) levels ofBloom's taxonomy and only six and three percent, respectively ofEOC materials at the evaluation and synthesis levels. Overall, 28.7,62.2, and 9.1 percent of the EOC materials were at the lower, middle,and top third, respectively, of Bloom's taxonomy (Davidson &Baldwin, 2005). Davidson and Baldwin (2005) subsequently classified EOC materialsinto four categories of items: questions, exercises, problems, andcases. Again, without any a priori assumption, they found that the levelof learning does not appear equally across the EOC categories. The EOCquestions target the lower levels of learning (knowledge andcomprehension); whereas, exercises, problems, and cases focus on themiddle levels of learning (application and analysis). They found only 26percent of the cases tapped into the highest levels of learning(evaluation and synthesis). Finally, Davidson and Baldwin (2005) evaluated the change over timein the proportion of Bloom's learning levels targeted by the EOCmaterials. They report that the percentage of knowledge, evaluations andsynthesis EOC materials remained relatively constant; whereas a decreaseoccurred in the percentage of comprehension and application EOCmaterials with an increase in the percentage of analysis EOC materials. Karns et al. (1983) applied Bloom's Taxonomy in the evaluationof six principles of economics textbooks and the accompanyingauthor-provided test banks. The results of the study reveal a lack ofcongruence between textbook educational objectives and the test bankexamination questions. Examination questions tested at a much lowerlevel on the cognitive domain identified in Bloom's taxonomy thanthose provided in the text. The stated text learning objectives weremore consistent with the analysis, synthesis, and evaluation levels ofBloom's taxonomy; whereas the author-provided exam questions weremore consistent with knowledge, comprehension, and application learningobjectives. Sullivan and Benke's (1997) study focused more on providingpotential adopters of financial accounting principles textbooks withrelevant, comparative information about 33 financial accountingprinciples textbooks published between 1994 and 1997. Among othervariables, they present the inclusion and level of inclusion of EOCmaterials. The authors present, on a text-by-text basis and in tableform, the existence or nonexistence of select EOC materials based on theevaluation of two chapters within each text. The authors'presentation includes computer problems, cases, special projects, globaleconomy problems, and ethics problems. Tabulating the contents of Sullivan and Benke's (1997) Table 2reveals that slightly more than half (55 percent) of the texts containextensive computer applications in the EOC materials; however, 42percent do not contain any computer problems. The authors classify atext as containing 'extensive' computer problems if thereexists at least one EOC material in at least two-thirds of the chaptersthat are "clearly identified as capable of being solved on acomputer" (p. 186). They classify individual texts as not havingcomputer problems if the text does not clearly identify the problem ascapable of being solved with a computer. Texts falling between these twoextremes are classified as "some" (1/3 to 2/3 of chapters) and"few" (less than 1/3 of chapters). Sullivan and Benke (1997)provide similar classification for ethics and global economy problems.Six percent of the texts contain extensive clearly identifiable globaleconomy problems and 52 percent of the texts do not. However, 48 percentof the texts contain extensive coverage of ethics in their EOCmaterials; whereas 30 percent contain no EOC materials "clearlyidentified as including or relating exclusively to ethicalconsiderations" (Sullivan & Benke, 1997, p. 187). RESEARCH QUESTIONS The call by the profession on every front, academia via the AAA,public accountants via the AICPA, corporate America via the IMA'sWhat Corporate American Wants (Siegel & Sorensen, 1994) over thepast one and a half decades provides substantial evidence to support theintegration of Bloom's cognitive objectives and the various skillsinto the accounting classroom. Further solidifying this support appearsvia the AACSBs most recently adopted accreditation standards whichinclude communication, critical/analytical, communication abilities,ethical understanding and reasoning abilities, use of informationtechnology, global environments, and group dynamics (AACSB, 2003). Thisevidence supports asking the following research questions: RQ1: Do accounting textbooks EOC materials have a sufficientcoverage of Bloom's cognitive skills? RQ2: Do accounting textbooks integrate behavioral skills requiredby the accounting profession into the EOC materials? METHODOLOGY The EOC materials for the leading text (market leader) in the areasof Accounting Information Systems (AIS), Audit, Cost, Intermediate, andTax were evaluated. The name of the text and the publisher wasidentified for the market leader in each of the above-mentioned coursesby means of a survey of the publishers. The respective publishersprovided copies of each text requested for research purposes (see Table1). The sample of questions for evaluation from the EOC materials wasselected for each text, on a chapter-by-chapter basis, using the randomnumber generator function in Excel [R] and using a sample size of 20percent from each of the categories, Discussion Questions, Exercises,Problems, Cases, etc. A total of 1,141 questions were evaluated acrossthe five courses on the cognitive and behavioral skills (see Table 1). Criteria for evaluation of each skill were established to ensureaccuracy and consistency in rating each of the eight skills. The skillsinclude oral and written communication, technology, ethics, research,global, teamwork, and cognitive. Oral communication was addressed if theEOC materials included any form of oral communication--e.g. interviews,working in groups. Written communication and technology was consideredaddressed by the EOC materials if the problem specifically required theuse writing skills and technology, respectively. Ethics was checked asbeing addressed by the EOC materials if it specifically addressed anethical issue and research was considered addressed by the EOC materialsif it specifically required the use of a reference outside the text,i.e. Internet, database, online library. An EOC material was consideredglobal in nature if it provided exposure to global issues. EOC materialsthat provided for the use of teams and/or groups met the criteria forteamwork. Cognitive skills were measured according to Bloom'staxonomy; however, the six levels of Bloom's taxonomy wereconsolidated into three levels as follows: Knowledge and Comprehension,Application and Analysis, and Synthesis and Evaluation. To confirm consistency in ratings across the two coauthors, thecoauthors conducted interrater reliability tests using texts notutilized in the full sample. A pilot sample of 67 questions from chapter5 of an Intermediate text indicated an inter-rater reliability of 88percent (59 of 67 questions were rated the same across the eightskills). An additional pilot sample of 29 questions from chapter 3 of aCost text indicated an inter-rater reliability of 86 percent (25 of 29questions were rated the same across the eight skills). An inter-raterreliability test of the actual questions included in the study revealedsimilar results (overall match of 78 percent) indicating thatconsistency of ratings was not an issue (see Table 2). The extent of coverage in the EOC materials indicates that thetextbooks are not doing an adequate job of covering the behavioralskills and competencies (e.g. communication, technology, etc.)identified as critical for success in the accounting profession. Teamand global coverage is less than one percent of all questions sampledwith ethics (1.3 percent), oral communication (1.4 percent), writtencommunication (2.8 percent), technology (3.3 percent), and research (4.7percent) only marginally higher (see Table 3). The extent of coverage of Bloom's Taxonomy indicates that, onaggregate, the textbooks focus primarily on addressing the middle-ordercognitive skills of application and analysis (54.5 percent), withmarginal coverage of the lower order cognitive skills of knowledge andcomprehension (24.5 percent). Overall and relative to the other twocategories, the highest order cognitive skills of synthesis andevaluation contain the least coverage (20.9 percent) in the textbookssampled (see Table 4). However, on a more important note, the chi-square statisticsindicate a significant difference in the coverage of Bloom'sTaxonomy between disciplines ([chi square] = 251.93, df = 8,'p' value < 0.00, see table 5). On closer examination, among the five accounting disciplinesexamined in this study, Audit has a significantly larger proportion ofthe lower order cognitive skills coverage (42 percent) whereas Cost andAIS have a significantly larger proportion of the highest ordercognitive skills coverage (49 & 46 percent, respectively). Ajustification for the findings could be that Intermediate and Tax aremore rules-based and this may justify the larger percentage ofapplication/analysis types of questions in these disciplines (69 percentin each) with very low emphasis on the higher-order cognitive skills ofsynthesis and evaluation (7 & 11 percent, respectively) (see Table6). The results for Intermediate compare closely to the Davidson andBaldwin (2005) study who found 19, 62, and nine percent of lower level,middle-level, and higher-level cognitive skills coverage. SUMMARY AND CONCLUSIONS While there appears to be consensus that the demand for accountingmajors is on the rise, there is widespread concern that the gap betweencurrent accounting education and the needs of industry are widening.Industry leaders are encouraging accounting educators to adopt anaccounting curriculum that is more relevant and that focuses on realworld situations. Specifically, they are asking educators to provide agreater emphasis on higher-order cognitive skills, teamwork, use oftechnology, exposure to global and ethical issues, and communicationskills. Accounting textbooks have a major influence on most accountingcourses and the nature and type of learning activities used to prepareentry-level accountants (Davidson & Baldwin, 2005). There isevidence in the accounting literature that indicates accountinginstructors rely heavily on textbooks and end-of-chapter (EOC) materialsfor homework assignments and coverage of course content. Accordingly,the cognitive and behavioral skill set of an accounting student islargely dependent on the EOC materials contained in the prescribed text. The purpose of this research was to evaluate the EOC materials inthe leading text in five of the accounting disciplines on a variety ofcriteria that are important for success in the accounting profession. Ifinstructors rely heavily on EOC materials from the text and the EOCmaterials mostly address lower-order thinking skills, there issubstantial risk that mostly lower-level learning will occur. Results indicate that the leading accounting texts tend to focusmore on lower-order cognitive skills as compared to higher-ordercognitive skills. Results also indicate that there is a significantdifference in the coverage of cognitive skills across the differentaccounting disciplines. Also, findings indicate that there is a lowcoverage of the behavioral skills among the various accountingdisciplines. LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH There are some limitations of this study. We only examined the EOCmaterials in one text for five accounting disciplines. To the extentthat the coverage of the EOC materials contained in these texts is notrepresentative of the other texts available, our results have to beinterpreted with caution. Second, the questions for rating were splitbetween the two authors. However, the inter-rater reliability resultsindicate there was an acceptable degree of consistency in ratings.Third, we only examined the textbook and did not look at any of thesupplemental material that is typically available with most texts.Finally, we only looked at the EOC materials available in the textsidentified and did not examine the questions prescribed by particularprofessors. For example, it is likely that even though a certain textmay only contain a small percentage of questions that address thehigher-order cognitive skills, a professor may mitigate this problem byprescribing a large percentage of those types of questions. Examiningthe types of questions actually contained in the supplemental materialand the types of questions prescribed by professors will provide furtherinsights into whether we as educators are addressing the skills requiredof our students by the corporate world. REFERENCES Accounting Education Change Commission (AECC) (1990). Objectives ofeducation for accountants. Issues in Accounting Education, 5, 307-312. American Accounting Association (AAA) (1986). Future accountingeducation: Preparing for the expanded profession. Committee on theFuture Structure, Content, and Scope of Accounting Education (BedfordCommittee Report). Issues in Accounting Education, 1, 168-195. American Accounting Association. Accounting Education ChangeCommission. Retrieved June 25, 2008, fromhttp://aaahq.org/facdev/aecc.htm American Institute of Certified Public Accountants (AICPA) (2002).Uniform CPA examination content specification. Retrieved June 25, 2008,from http://www.cpaexam.org/download/CSOs%20for%20revised%20CPA%20Exam.pdf. AICPA (2003). AICPA Core competency framework for entry into theaccounting profession (The Framework). Retrieved September 17, 2008,from http://www.aicpa.org/edu/corecomp.htm Arthur Andersen & Co., Arthur Young, Coopers & Lybrand,Deloitte Haskins & Sells, Ernst & Whinney, Peat Marwick Main& Co., Price Waterhouse, and Touche Ross (1989). Perspectives oneducation: Capabilities for success in the accounting profession,"White Paper." Prepared by the chief executives of the [then]eight largest public accounting firms. Retrieved June 25, 2008, fromhttp://aaahq.org/AECC/big8/index.htm Association to Advance Collegiate Schools ofBusiness--International (AACSB). 2003. Eligibility procedures andstandards for business accreditation. Retrieved June 25, 2008, fromhttp://www.aacsb.edu/accreditation/business/standards.pdf Association to Advance Collegiate Schools of Business, Overview ofassessment. Retrieved June 25, 2008, fromhttp://www.aacsb.edu/resource_centers/assessment/ov-process-define.asp Bloom, Benjamin S. (ed.) 1956. Taxonomy of educational objectives:The classification of educational goals, by a Committee of College andUniversity Examiners. Handbook I. Cognitive Domain. New York: Longmans,Green. CPA Vision AICPA. Retrieved June 25, 2008, fromhttp://www.cpavision.org/vision.htm Davidson, R. A. & B. A. Baldwin (2005). Cognitive skillsobjective in intermediate accounting textbooks: Evidence fromend-of-chapter material. Journal of Accounting Education, April: 79-95. Francis, M., T. C. Mulder & J. S. Stark (1995). Intentionallearning: A process for learning to learn in the accounting curriculum.Accounting education series, Volume No. 12. Sarasota, FL: AmericanAccounting Association. Gainen, J. & P. Locatelli (1995). Assessment for the newcurriculum: A guide for professional Accounting programs. Accountingeducation series, Volume 11. Sarasota, FL: American AccountingAssociation. Karns, J. M., G. E. Burton & G. D. Martin (1983). Learningobjectives and testing: An analysis of six principles of economicstextbooks, using Bloom's taxonomy. The Journal of EconomicEducation, 14(3), 16-20. Siegel, G. & J. E. Sorensen (1994). What corporate Americawants in entry-level accountants. Management Accounting, 76(3), 26-31. Sullivan, M. C. & R. L Benke, Jr. (1997). Comparingintroductory financial accounting textbooks. Journal of AccountingEducation, 15(2), 181-220. Sanjay Gupta, Valdosta State University Leisa L. Marshall, Valdosta State UniversityTable 1: Leading Textbooks and SampleDiscipline Name of Text Author(s) Publisher #Qs * Total Qs 1,141AIS Accounting Romney & Prentice 89 Information Steinbart Hall Systems (10thAudit Auditing & Assurance Services (11th Arens, Prentice 205 Ed.) Ed.) Elder & Hall BeasleyCost Cost Accounting Horngren, Prentice 219 (12th Ed.) Datara & Hall FosterIntermediate Intermediate Accounting Keiso, Wiley 368 (12th Ed.) Weygandt & WaTax Individual Hoffman, Thomson 260 Income Taxes Smith & (2008 Ed.) Willis* Number of questions sampledTable 2: Inter-rater reliability resultsDiscipline Total # % Questions Matched MatchedAIS 29 18 62Audit 44 33 75Cost 46 35 76Intermediate 75 64 85Tax 53 41 77Total 236 183 78Table 3: Coverage of behavioral skillsDiscipline Questions Oral Written TechnologyAIS 89 5 9Audit 205 16Cost 219 1Intermediate 368 10 13Tax 260 16 16Total 1,141 16 32 38Overall Percent (%) 1.40% 2.80% 3.30%Table 4: Coverage of Bloom's Taxonomy Cognitive SkillsDiscipline Questions Knowledge/ Applications/ Synthesis/ Comprehend Analysis EvaluationAIS 89 9 39 41Audit 205 87 80 38Cost 219 43 69 107Intermediate 368 88 255 25Tax 260 53 179 28Total 1,141 280 622 239Overall Percent 24.5% 54.5% 20.90%Table 5: Chi-square results Value df Asymp. Sig. (2-sided)Pearson Chi-square 251.9287522 8 6.72E-50Likelihood Ratio 238.7302672 8 4.21E-47N of Valid Cases 11410 cells (0%) have expected count less than 5.The minimum expected count is 18.64.Table 6: Coverage of Bloom's Taxonomy--PercentagesDiscipline Number of Knowledge/ Application/ Synthesis/ Questions Comprehend Analysis (%) Evaluation (%) (%)AIS 89 10 44 46Audit 205 42 39 19Cost 219 20 32 49Intermediate 368 24 69 7Tax 260 20 69 11