Academic Performance in Introductory Accounting: Do Learning Styles Matter?

Abstract

This study examines the impact of learning styles on academic performance using major assessment methods (examinations and assignments including multiple-choice and constructed response questions (CRQs)) in an introductory accounting course. Students' learning styles were assessed using Kolb's Learning Style Inventory Version 3.1. The results indicate that students' learning styles, after controlling for other variables, are associated with academic performance, particularly, in the final examination including both formats, multiple-choice questions and CRQs. Students who exhibit the ‘assimilating’ learning style appear to perform better in some of the assessments than students with ‘diverging’ or ‘accommodating’ learning styles. The findings have implications for designing assessments to ensure that they are not biased towards particular learning styles which would improve their validity and fairness.     

Tainted portfolios: How impairment accounting rules restrict security sales

Contrary to claims that fair value accounting exacerbated banks’ securities sales during the recent financial crisis, we present evidence that suggests – if anything – that the current impairment accounting rules served as a deterrent to selling. Specifically, because banks must provide evidence of their ‘intent and ability’ to hold securities with unrealized losses, there are strong incentives to reduce, rather than increase, security sales when market values decline to avoid ‘tainting’ their remaining securities portfolio. Validating this concern, we find that banks incur greater other‐than‐temporary impairment (OTTI) charges when they sell more securities. We then find that banks sell fewer securities when their security portfolios have larger unrealized losses (and thus larger potential impairment charges), and these results are concentrated in banks with homogenous securities portfolios, expert auditors, more experienced managers, and greater regulatory capital slack. Overall, our results suggest that – contrary to critics’ claims – the accounting rules appear to have reduced banks’ propensity to sell their securities during the financial crisis.     

Do Macro-economic Crises Determine Accounting Value Relevance?

Abstract

We investigate whether the value relevance of earnings and book values in Turkey significantly changed across periods of financial uncertainty. Our enquiry differs from the mainstream literature that posits a unidirectional association determined by the ‘quality’ of individual firm accounts towards price. We find divergence in accounting value relevance components across the 1997–2012 period. Dominant value relevance shifts from earnings and negative interest rates in hyper-inflation, to the balance sheet after IFRS in 2005. On the other hand, the global financial crisis (GFC) is associated with diminished accounting value relevance for all variables. Policy issues are raised about value relevance consistency, the use of negative (low) interest rates as fiscal policies and the asymmetric application of market based valuations in emerging economies.     

The Implementation and Use of Benchmarking in Local Government: A Case Study of the Translation of a Management Accounting Innovation

Benchmarking is a management accounting innovation (MAI) that can be used for performance measurement and management in both the private and the public sectors. Although public sector accounting researchers have reported some success with the use of benchmarking, frequently charged problems exist in implementing and using this management technique. To look beyond the technical and institutional explanations, this paper takes a translation approach and presents a case study of a local government benchmarking network. We conclude that there is a link between benchmarking implementation problems and initiators’ failure to build a strong network of benchmarking allies. Implementation is facilitated if actors, other than the initiators, recognize the possibility of making benchmarking more relevant and less cost focused. However, even when a network of actors has a favourable attitude towards benchmarking, benchmarking may still appear as an unruly ‘actant’. Furthermore, the perception of implementation failure and success is heterogeneous and connected to various actors’ adoption of benchmarking. We also conclude that there is a connection between the use of benchmarking and 1) actors’ possibilities to use benchmarking in the struggle for resources and 2) the perception of benchmarking information as ‘factual’ or ‘factual enough’. However, the perception of benchmarking information as ‘factual’ or ‘factual enough’ seems not only a matter of correct or incorrect ratios but also of whether such information serves actors’ interests. A final conclusion is that the use of benchmarking increases when actors other than the initiators complement the original idea and ‘counter interest’ the initiators.     

University Accounting Curricula: The Perceptions of an Alumni Group

Abstract

Many of the problems associated with accounting education could be due to at least two reasons: inadequate attention given to the design of accounting programmes, and the narrow view of stakeholder approach adopted in examining education issues. The existing literature mainly focuses on students' perception about issues such as teaching quality, alumni experience in major accounting firms, and so on. This paper deals with the design of accounting programmes, and proposes to ascertain the views of an important stakeholder group (i.e. alumni) on this issue. The findings of this study give credence to some of the generally held views, e.g. that it is no longer appropriate for tertiary education providers to adopt a one-size-fits-all approach. However, in some other areas, the findings represent a stark contrast to the views on certain issues promulgated by the professional bodies in New Zealand and overseas including the USA, (for example, the issue of appropriate proportions of accounting, business and liberal studies in an accounting programme). Notably, the respondents in general placed a low importance on auditing as part of an education programme. Further, in terms of the emphases that should be placed in an accounting programme, contrary to the endorsement in the literature, ‘work experience’ was not considered as important as other areas of emphasis, (e.g. global perspective, local perspective, professionalism and social and environmental perspective).     

On the ‘Disclosure Initiative – Principles of Disclosure’: The EAA Financial Reporting Standards Committee’s View

Abstract

This paper summarises the contents of a comment letter produced by a working group of 12 academics in response to the International Accounting Standards Board (IASB) Discussion Paper on principles of disclosure. The comment letter was submitted by the Financial Reporting Standards Committee (FRSC) of the European Accounting Association (EAA). The work includes reviews of relevant academic literature of areas related to the various questions posed by the IASB in the Discussion Paper, including the ‘disclosure problem’ and the objective of the project, the suggested principles of effective communication, the roles of the primary financial statements and notes, the location of information and the use of performance measures. The paper also discusses the disclosure of accounting policies, the objectives of centralised disclosure, and the New Zealand Accounting Standards Board staff’s approach to disclosure.     

Strategic management accounting in close inter-organisational relationships

This paper provides a conceptual comparison between the ‘mainstream strategic management accounting’ literature, the ‘accounting and strategising’ literature and ‘strategic management accounting (SMA) in close inter-organisational relationships’. It concludes that ‘SMA in close inter-organisational relationships’ shares some important characteristics with the ‘accounting and strategising’ literature. Important differences were found, too, though. These mainly concerned the need to understand individuals working for close partners as preparers of strategic information; the need for disaggregated accounting information about unique connections to close partners and about the role of indirect benefits that follow from close connections and the need for the company to not only collect information but also disperse diverse information within close inter-organisational relationships. Through an intensive case study of a global robot manufacturer, Robotics, this paper also provides novel empirical evidence on ‘SMA in close inter-organisational relationships’. For instance, SMA practices included indirect benefits, something mainly neglected in the existing literature on SMA. These indirect benefits involved a close customer's willingness to invest time and effort in Robotics’ technological development, thereby contributing to Robotics’ ability to attain revenue gains in its interactions with other customers. Our findings also have important implications for the ‘inter-organisational accounting’ literature, for instance, by highlighting the need to link more explicitly strategic decision-making with the current interest in the role of accounting in inter-organisational dynamics.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Slovenia

Abstract

We provide an overview of the role and current status of International Financial Reporting Standards (IFRS) in the development of national accounting rules in Slovenia. The basic requirements of the financial reporting in Slovenia are set in the Companies Act, while the Slovenian accounting standards (SAS) provide a detailed authoritative guidance, especially on measurement. We describe the (historical) relations of all four editions of SAS with IFRS, provide explanations for the close alignment of SAS 2006 and SAS 2016 with IFRS, and identify major differences. In addition, the paper covers the adoption of the new EU accounting Directive into Slovenian legislation.     

Accounting for Fair Competition between Private and Public Sector Armaments Manufacturers in Victorian Britain

Failures in rifle supply during the Crimean War (1853–56) caused the British government to seek a more reliable method for procuring weapons for military use. Fact‐finding missions to US rifle manufacturers led to the introduction of the ‘American system of manufacturing’ at a purpose‐built factory in north London. The extension of gun‐making facilities at the Royal Small Arms Factory, Enfield Lock, was accompanied by major accounting innovations driven by society's desire for ‘cheap and efficient’ government and, within a laissez‐faire environment, the need to ensure fair competition between private and public suppliers of military goods. Accounting practices based on ‘strictly commercial principles’ were then disseminated to other government military manufacturing establishments located at the Woolwich Arsenal. The historical knowledge revealed in this paper adds a new dimension to existing accounting historiography, which focuses principally on the business sector as the driving force for accounting change in Britain.     

Extending the Classification of European Countries by their IFRS Practices: A Research Note

Abstract

This paper expands the IFRS accounting systems’ classification proposed by Nobes [(2011). IFRS practices and the persistence of accounting system classification. Abacus, 47(3), 267–283] to a broader set of European countries. The results suggest a classification distinguishing between four groups of European countries, and add to the evidence, reported by Kvaal and Nobes [(2010). International differences in IFRS policy choice. Accounting and Business Research, 40(2), 173–187] and Nobes (2011)., that pre-IFRS accounting differences influence the options adopted by firms. This study contributes to the literature suggesting that the widespread adoption of IFRS has not eliminated the differences between national accounting practices and that accounting systems classification did not lose its relevance.     

A theoretical basis for public sector accrual accounting research: current state and perspectives

ABSTRACT

Public sector or government accounting has been the subject of many research endeavors. However, scholars have repeatedly criticized the lack of a consistent and well-defined theoretical basis for international research. So far, most researchers have drawn from various streams of theoretical perspectives with often unsatisfactory results. The goal of this paper is to put forward the International Public Sector Accounting Standards Board’s (IPSASB) Conceptual Framework as a point of reference for establishing a better-fitting theoretical basis for public sector accrual accounting research.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Italy

Abstract

We examine the recent changes that have affected the Italian accounting scenario after the adoption of the IFRS and the enactment of the European accounting system. In particular, we have focused our attention on the decision of the legislature to enlarge the mandatory adoption of IFRS to non-listed companies and to individual financial statements (FS). At the same time, we have observed the changes determined by the EU Directive 2013/34 on the Italian Civil Code and the FS legislation. Both set of changes are describing a process under which the Italian accounting rules are moving towards the international accounting standards and their framework, contents and methods. Therefore, the main differences among national rules and IFRS are grounded on the measurement rules and the role played by the historical cost principles and the strict and detailed regulation of the Balance sheet and Income statement formats.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Turkey

Abstract

As it is not a member of the European Union, Turkey has not yet adopted EU accounting directives by law. Instead, Turkish standard setting authority adopted International Financial Reporting Standards for entities that have public accountability and has recently prepared the draft Turkish financial reporting standard for non-publicly accountable entities that are subject to independent audit: Framework for Local Financial Reporting. This national standard is influenced by European accounting directive 2013/34, international financial reporting practices and UK experience in addition to national accounting rules.     

The persistence of international accounting differences as measured on transition to IFRS

The international accounting classification literature emphasises the importance of understanding how institutional factors shape accounting regulations and practices. With the mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union and Australia in 2005, our empirical study examines whether three international accounting classification systems relating to equity financing, law and culture still had merit as measured on transition to IFRS and explore whether they are effective in grouping accounting systems. Using IFRS as the yardstick, we find statistically significant differences in the measurement of shareholders’ equity as between strong (Class A) versus weak (Class B) equity financing systems, common law versus code law systems and cultural systems based on ‘Anglo’, ‘Nordic’ and ‘More Developed Latin’ cultural groups. With regard to the measurement of net income, however, we find statistically significant differences only in respect of strong (Class A) versus weak (Class B) equity financing systems. Our findings demonstrate that traditional international accounting system differences still persisted at the time of IFRS adoption even after long periods of harmonisation and growing international accounting convergence.     

A Framework of Best Practice of Continuing Professional Development for the Accounting Profession

Abstract

The International Accounting Education Standards Board (IAESB) places a strong emphasis on individual professionals taking responsibility for their Continuing Professional Development (CPD). On the other hand, the roles performed by professional accountants have evolved out of practical necessity to ‘best’ suit the diverse needs of business in a global economy. This diversity has meant that professional accountants are seen in highly specialised roles requiring diverse skill sets. In order to enhance the contribution of the accountant as a knowledge professional for business, it follows that CPD that leverages off an individual's experience should be designed to meet the needs of professionals across the different specialised roles within the profession. In doing so the project identifies how CPD should differ across roles and levels of organisational responsibility for accounting professionals. The study also makes a number of policy recommendations to IAESB and IFAC.     

Reclaiming ‘Sense’ from ‘Cents’ in Accounting Education

Abstract

This essay adopts an interpretive methodology of relevant literature to explore the limitations of accounting education when it is taught purely as a technical practice. The essay proceeds from the assumption that conventional accounting education is captured by a positivistic neo-classical model of decision-making that draws on economic rationale to inform and report on corporate activities and make value judgements about accounting. Accounting with its emphasis on transactions and recording makes little sense unless accountability and stewardship objectives are effective. This essay calls for an increased use of active learning strategies (experiential and in-context activities) to connect students to the social realities of accounting. Cognitive dissonance, as an explicit objective of accounting education, provides the means to challenge accounting as a rational stage of endeavour through critical and dialogical perspectives in accounting. Two types of learning pedagogies based on ‘in’ and ‘out’ of classroom activities were discussed and analysed.     

Regression Analysis: Instructional Resource for Cost/Managerial Accounting

Abstract

This paper describes a classroom-tested instructional resource, grounded in principles of active learning and a constructivism, that embraces two primary objectives: ‘demystify’ for accounting students technical material from statistics regarding ordinary least-squares (OLS) regression analysis – material that students may find obscure or overly abstract – and increase student knowledge regarding the use of Excel for cost-estimation purposes. The resource consists of a set of seven student-related files – PowerPoint slides, Word documents, and Excel files – divided into two major parts: four files that deal with simple (i.e., one-variable) linear regression and three files related to the incremental unit-time learning-curve model. A separate Word file, meant for instructors, provides detailed guidance regarding the use of the student-based files. The resource is flexible in that it can be used at both graduate and undergraduate courses in cost/management accounting; customized to meet the needs of individual instructors (coverage of the entire resource requires approximately seven hours of in-class time) and used in conjunction with any cost/management accounting textbook. Throughout the resource many references to related online supplemental materials are provided, including links to relevant online video clips.     

Deadlines and software: disentangling local government accounting reforms in Brazil

ABSTRACT

This paper shows how ongoing accounting reforms in Brazilian local governments were affected by a shift from a universal to a gradual implementation approach. Deadlines being postponed led to a decrease in local governments’ willingness to reform. This effect varied according whether the accountants involved depended on commercial software to operate a particular accounting policy. An important finding from this research was that software providers are to some extent setting the IPSAS implementation agenda in Brazil.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from the Czech Republic

Abstract

The aim of this paper is to characterize the extent to which International Financial Reporting Standards (IFRS) is used as a reference point for national accounting rules in the Czech Republic (CR) and what elements are incorporated in Czech Accounting Regulation, paying particular attention to the latest amendment to the Accounting Act (AA) based on the EU accounting Directive (2013/34/EU). Methods used include analysis of Ministry of Finance documents, interviews with the team members who participated in the new wording of the AA to adapt it to the EU Directive and comparison of current to existing IFRS reporting rules. The results confirm that IFRS implementation in the CR is determined by economic and institutional factors, a major part of which is played by foreign ownership of dominant Czech companies and their subordinate position as subsidiaries of foreign entities and the weak capital market. Implementation of elements of IFRS into Czech accounting standards is still only partial. This process takes place as an integral part of the process of reorientation of the entire economic system toward market principles, which includes the accounting system. Each change of the AA involves some elements of IFRS; however, between the two systems, there are still significant differences, the roots of which lie in a different (continental) model of accounting.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Croatia

Abstract

We examine the changes in Croatian accounting regulation, in the context of 2013/34/EU Directive implementation and analyse indirect effects of IFRS on national reporting regulation for non-listed companies. The main goal is to determine the level of conformity between Croatian accounting rules and IFRS as adopted by EU. Analysis shows that IFRS are used in the great extent as a source for provisions in Croatian Financial Reporting Standards (CFRS). There are only a few major differences between Croatian financial reporting standards and IFRS. However, there are a number of IFRS standards that are considered not to be relevant in the context of CFRS, as CFRS are intended to be used only by SMEs. Nevertheless, the management is permitted to use provisions and guidance from IFRS, if CFRS provisions are not applicable to a certain transaction or event.