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

Gupta, Sanjay ; Marshall, Leisa L.

INTRODUCTION

Demand for accounting professionals has increased dramatically in the wake of financial disasters at Enron, MCI WorldCom, Tyco, and Arthur Anderson. A survey conducted by the National Association of Colleges and Employers published in the March 1, 2005, issue of the Wall Street Journal, found that accounting is the number one major employers are demanding in 2005. Additionally, the Bureau of Labor Statistics has predicted nearly 400,000 new accounting jobs over the 10-year period ending in 2012.

While there appears to be consensus that the demand for accounting majors is on the rise, there is widespread concern that the gap between current accounting education and the needs of industry are widening. Industry leaders are encouraging accounting educators to adopt an accounting curriculum that is more relevant and that focuses on real world situations. Specifically, they are asking educators to provide a greater emphasis on higher-order cognitive skills, teamwork, use of technology, exposure to global and ethical issues, and communication skills.

Accounting textbooks have a major influence on most accounting courses and the nature and type of learning activities used to prepare entry-level accountants (Davidson & Baldwin, 2005). There is evidence in the accounting literature that indicates accounting instructors rely heavily on textbooks and end-of-chapter (EOC) materials for homework assignments and coverage of course content. Accordingly, the cognitive skill set of an accounting student is largely dependent on the EOC materials contained in the prescribed text.

If instructors rely heavily on EOC materials from the text and the EOC materials mostly address lower-order thinking skills, there is substantial risk that mostly lower-level learning will occur. The purpose of this research is to evaluate the EOC materials in the leading text of five accounting disciplines on a variety of criteria that are important 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 and behavioral skills identified above. Specifically, the authors performed a systematic analysis of the leading text for Accounting Information Systems (AIS), Auditing, Cost, Intermediate, and Tax Accounting to determine the extent to which textbooks facilitate the move from the transmittal of knowledge to the development of the higher-order cognitive skills as well as the behavioral skills (e.g. communication, technology, etc). The next sections of the paper contain a review of the professional and academic literature. The research questions of this study, the methodology and results sections appear next. The paper concludes with the conclusion, limitations and suggestions for future research.

PROFESSIONAL LITERATURE REVIEW

Almost two decades ago, the Accounting Education Change Commission (AECC) was created by the American Accounting Association (AAA) to serve as a catalyst to improve the academic preparation of future accountants. More specifically, the AECC's purpose was to move accounting education from the traditional transmittal of technical knowledge to the development of a "deep understanding of concepts and policies, as well as developing skills and attitudes necessary for the successful practice of accounting" (Gainen & Locatelli, 1995). The initial phases of this movement included a composite of knowledge and skills needed 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), the skills identified by the AECC (1990) include, but are not limited to, intellectual, interpersonal, and communication. Intellectual skills comprise the ability to think logically, solve unstructured problems, and the ability to identify ethical issues. Interpersonal skills incorporate the ability to work with others in groups and the ability to interact with culturally and diverse people. Communication skills consist of the ability to communicate both formally and informally in both spoken and written form. The ability to apply research skills, report results, and use electronic sources of information also appears as a form of communication.

The American Institute of Certified Public Accountant's (AICPA) Core Competency Framework (AICPA, 2003) and the profession's Uniform Certified Public Accountant (CPA) examination requirements (AICPA, 2002) provide additional evidence about the importance of cognitive thinking and a well-developed skills set. The Core Competency Framework (2003) includes, but is not limited to, research skills, communication, interaction, technology, problem-solving, and global perspective. The CPA exam requires the application of research and technology skills and the analysis, interpretation and communication of business information. Specific technology skills include the ability to access and use electronic databases, electronic spreadsheets and word processors (AICPA, 2002, p. 2).

Corporate America also spoke to accounting educators about the lack of accounting knowledge and skills (Siegel & Sorensen, 1994). Respondents to a survey co-sponsored by the Institute of Management Accountants (IMA) and the Financial Executives Institute (FEI) reveal that entry-level accountants lack solid communication skills. The results of the survey also reveal that accounting educators received a 68 percent for teaching computer literacy and only a 47 percent for teaching team building skills.

The AACSB integrated the competencies identified above, in the form of learning goals and objectives, into the accreditation Assurance of Learning (AOL) standards (Standards) more than a decade ago. The AACSB identifies the establishment of the learning goals and objectives as the first step in the assessment process (AACSB, 2003). Although the Standards specifically state the applicability of learning goals and objectives to separate degree programs (AACSB, 2003, p. 59), these naturally 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 beyond knowledge recall to include cognitive skills such as those found in Bloom's (1956) classification of cognitive skills (i.e. analysis, synthesis, and evaluation) (AACSB, 2003). In addition to knowledge and cognitive skills, the Standards provide a list of skills that should appear 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 of information technology, global environments, and group dynamics (AACSB, 2003).

ACADEMIC LITERATURE REVIEW

Limited literature that evaluates whether the textbooks' EOC materials have kept pace with the demands of the accounting education profession exists. Davidson and Baldwin (2005) evaluate two chapters of several Intermediate Accounting texts and Karns et al. (1983) evaluate Economics principles texts. However, while both articles limit their evaluation to the presentation of EOC materials that tap into Bloom's higher-order thinking skills, neither evaluates the coverage of the softer skills (e.g. communication, technology, etc.) that appears in the EOC materials. Although Sullivan and Benke (1997) do not evaluate the cognitive skills of Bloom's taxonomy, they include a comparison of a few of the softer skills in 33 financial accounting principles texts.

Bloom's taxonomy (1956), the most commonly accepted theory of learning (Davidson & Baldwin, 2005), presents a progression of learning processes. Knowledge and comprehension must occur first, followed by the application and analysis of comprehended knowledge, and finally, synthesizing and evaluating material learned at the lower levels. Knowledge and comprehension are considered "lower-order" cognitive objectives with the remaining four considered "higher-order" cognitive objectives (Gainen & Locatelli, 1995).

Knowledge requires the recall or recognition of information whereas comprehension requires the restating, explaining, describing, and/or translating into one's own words. An example of the achievement at the knowledge level includes the ability to define terms. Comprehension includes 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 a certain purpose (Gainen & Locatelli, 1995); for example, using first-in, first-out to value ending inventory. Analysis requires "separating of the whole into parts to see relationships and discover the structure of an idea or concept" (Francis et al., 1995, p. 8) such as is required to analyze risk on a portfolio investment (Gainen & Locatelli, 1995). Synthesis requires the combining of ideas from various sources to produce an original product; whereas evaluation requires the development of an opinion based on the facts, information, etc.

Davidson and Baldwin (2005) analyzed two chapters (revenue recognition and accounting for investments) each from a set of 41 Intermediate Accounting textbooks/editions over a period from 1934 to 2001. Several authors' texts represented multiple editions; as such, 21 different sets of authors appear in Davidson and Baldwin's study.

For descriptive purposes only and without any underlying a priori assumptions, Davidson and Baldwin (2005) found significantly higher proportions of EOC materials at the comprehension, application and analysis (18.5, 19.2, and 43.0 percent, respectively) levels of Bloom's taxonomy and only six and three percent, respectively of EOC 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 materials into four categories of items: questions, exercises, problems, and cases. Again, without any a priori assumption, they found that the level of learning does not appear equally across the EOC categories. The EOC questions target the lower levels of learning (knowledge and comprehension); whereas, exercises, problems, and cases focus on the middle levels of learning (application and analysis). They found only 26 percent of the cases tapped into the highest levels of learning (evaluation and synthesis).

Finally, Davidson and Baldwin (2005) evaluated the change over time in the proportion of Bloom's learning levels targeted by the EOC materials. They report that the percentage of knowledge, evaluations and synthesis EOC materials remained relatively constant; whereas a decrease occurred in the percentage of comprehension and application EOC materials with an increase in the percentage of analysis EOC materials.

Karns et al. (1983) applied Bloom's Taxonomy in the evaluation of six principles of economics textbooks and the accompanying author-provided test banks. The results of the study reveal a lack of congruence between textbook educational objectives and the test bank examination questions. Examination questions tested at a much lower level on the cognitive domain identified in Bloom's taxonomy than those provided in the text. The stated text learning objectives were more consistent with the analysis, synthesis, and evaluation levels of Bloom's taxonomy; whereas the author-provided exam questions were more consistent with knowledge, comprehension, and application learning objectives.

Sullivan and Benke's (1997) study focused more on providing potential adopters of financial accounting principles textbooks with relevant, comparative information about 33 financial accounting principles textbooks published between 1994 and 1997. Among other variables, they present the inclusion and level of inclusion of EOC materials. The authors present, on a text-by-text basis and in table form, the existence or nonexistence of select EOC materials based on the evaluation of two chapters within each text. The authors' presentation includes computer problems, cases, special projects, global economy problems, and ethics problems.

Tabulating the contents of Sullivan and Benke's (1997) Table 2 reveals that slightly more than half (55 percent) of the texts contain extensive computer applications in the EOC materials; however, 42 percent do not contain any computer problems. The authors classify a text as containing 'extensive' computer problems if there exists at least one EOC material in at least two-thirds of the chapters that are "clearly identified as capable of being solved on a computer" (p. 186). They classify individual texts as not having computer problems if the text does not clearly identify the problem as capable of being solved with a computer. Texts falling between these two extremes 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 global economy problems and 52 percent of the texts do not. However, 48 percent of the texts contain extensive coverage of ethics in their EOC materials; whereas 30 percent contain no EOC materials "clearly identified as including or relating exclusively to ethical considerations" (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's What Corporate American Wants (Siegel & Sorensen, 1994) over the past one and a half decades provides substantial evidence to support the integration of Bloom's cognitive objectives and the various skills into the accounting classroom. Further solidifying this support appears via the AACSBs most recently adopted accreditation standards which include communication, critical/analytical, communication abilities, ethical understanding and reasoning abilities, use of information technology, global environments, and group dynamics (AACSB, 2003). This evidence supports asking the following research questions:

RQ1: Do accounting textbooks EOC materials have a sufficient coverage of Bloom's cognitive skills?

RQ2: Do accounting textbooks integrate behavioral skills required by the accounting profession into the EOC materials?

METHODOLOGY

The EOC materials for the leading text (market leader) in the areas of Accounting Information Systems (AIS), Audit, Cost, Intermediate, and Tax were evaluated. The name of the text and the publisher was identified for the market leader in each of the above-mentioned courses by means of a survey of the publishers. The respective publishers provided copies of each text requested for research purposes (see Table 1).

The sample of questions for evaluation from the EOC materials was selected for each text, on a chapter-by-chapter basis, using the random number generator function in Excel [R] and using a sample size of 20 percent from each of the categories, Discussion Questions, Exercises, Problems, Cases, etc. A total of 1,141 questions were evaluated across the five courses on the cognitive and behavioral skills (see Table 1).

Criteria for evaluation of each skill were established to ensure accuracy and consistency in rating each of the eight skills. The skills include oral and written communication, technology, ethics, research, global, teamwork, and cognitive. Oral communication was addressed if the EOC materials included any form of oral communication--e.g. interviews, working in groups. Written communication and technology was considered addressed by the EOC materials if the problem specifically required the use writing skills and technology, respectively. Ethics was checked as being addressed by the EOC materials if it specifically addressed an ethical issue and research was considered addressed by the EOC materials if it specifically required the use of a reference outside the text, i.e. Internet, database, online library. An EOC material was considered global in nature if it provided exposure to global issues. EOC materials that provided for the use of teams and/or groups met the criteria for teamwork. Cognitive skills were measured according to Bloom's taxonomy; however, the six levels of Bloom's taxonomy were consolidated into three levels as follows: Knowledge and Comprehension, Application and Analysis, and Synthesis and Evaluation.

To confirm consistency in ratings across the two coauthors, the coauthors conducted interrater reliability tests using texts not utilized in the full sample. A pilot sample of 67 questions from chapter 5 of an Intermediate text indicated an inter-rater reliability of 88 percent (59 of 67 questions were rated the same across the eight skills). An additional pilot sample of 29 questions from chapter 3 of a Cost text indicated an inter-rater reliability of 86 percent (25 of 29 questions were rated the same across the eight skills). An inter-rater reliability test of the actual questions included in the study revealed similar results (overall match of 78 percent) indicating that consistency of ratings was not an issue (see Table 2).

The extent of coverage in the EOC materials indicates that the textbooks are not doing an adequate job of covering the behavioral skills and competencies (e.g. communication, technology, etc.) identified as critical for success in the accounting profession. Team and global coverage is less than one percent of all questions sampled with ethics (1.3 percent), oral communication (1.4 percent), written communication (2.8 percent), technology (3.3 percent), and research (4.7 percent) only marginally higher (see Table 3).

The extent of coverage of Bloom's Taxonomy indicates that, on aggregate, the textbooks focus primarily on addressing the middle-order cognitive skills of application and analysis (54.5 percent), with marginal coverage of the lower order cognitive skills of knowledge and comprehension (24.5 percent). Overall and relative to the other two categories, the highest order cognitive skills of synthesis and evaluation contain the least coverage (20.9 percent) in the textbooks sampled (see Table 4).

However, on a more important note, the chi-square statistics indicate a significant difference in the coverage of Bloom's Taxonomy between disciplines ([chi square] = 251.93, df = 8, 'p' value < 0.00, see table 5).

On closer examination, among the five accounting disciplines examined in this study, Audit has a significantly larger proportion of the lower order cognitive skills coverage (42 percent) whereas Cost and AIS have a significantly larger proportion of the highest order cognitive skills coverage (49 & 46 percent, respectively). A justification for the findings could be that Intermediate and Tax are more rules-based and this may justify the larger percentage of application/analysis types of questions in these disciplines (69 percent in each) with very low emphasis on the higher-order cognitive skills of synthesis and evaluation (7 & 11 percent, respectively) (see Table 6). The results for Intermediate compare closely to the Davidson and Baldwin (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 accounting majors is on the rise, there is widespread concern that the gap between current accounting education and the needs of industry are widening. Industry leaders are encouraging accounting educators to adopt an accounting curriculum that is more relevant and that focuses on real world situations. Specifically, they are asking educators to provide a greater emphasis on higher-order cognitive skills, teamwork, use of technology, exposure to global and ethical issues, and communication skills.

Accounting textbooks have a major influence on most accounting courses and the nature and type of learning activities used to prepare entry-level accountants (Davidson & Baldwin, 2005). There is evidence in the accounting literature that indicates accounting instructors rely heavily on textbooks and end-of-chapter (EOC) materials for homework assignments and coverage of course content. Accordingly, the cognitive and behavioral skill set of an accounting student is largely dependent on the EOC materials contained in the prescribed text.

The purpose of this research was to evaluate the EOC materials in the leading text in five of the accounting disciplines on a variety of criteria that are important for success in the accounting profession. If instructors rely heavily on EOC materials from the text and the EOC materials mostly address lower-order thinking skills, there is substantial risk that mostly lower-level learning will occur.

Results indicate that the leading accounting texts tend to focus more on lower-order cognitive skills as compared to higher-order cognitive skills. Results also indicate that there is a significant difference in the coverage of cognitive skills across the different accounting disciplines. Also, findings indicate that there is a low coverage of the behavioral skills among the various accounting disciplines.

LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH

There are some limitations of this study. We only examined the EOC materials in one text for five accounting disciplines. To the extent that the coverage of the EOC materials contained in these texts is not representative of the other texts available, our results have to be interpreted with caution. Second, the questions for rating were split between the two authors. However, the inter-rater reliability results indicate there was an acceptable degree of consistency in ratings. Third, we only examined the textbook and did not look at any of the supplemental material that is typically available with most texts. Finally, we only looked at the EOC materials available in the texts identified and did not examine the questions prescribed by particular professors. For example, it is likely that even though a certain text may only contain a small percentage of questions that address the higher-order cognitive skills, a professor may mitigate this problem by prescribing a large percentage of those types of questions. Examining the types of questions actually contained in the supplemental material and the types of questions prescribed by professors will provide further insights into whether we as educators are addressing the skills required of our students by the corporate world.

REFERENCES

Accounting Education Change Commission (AECC) (1990). Objectives of education for accountants. Issues in Accounting Education, 5, 307-312.

American Accounting Association (AAA) (1986). Future accounting education: Preparing for the expanded profession. Committee on the Future Structure, Content, and Scope of Accounting Education (Bedford Committee Report). Issues in Accounting Education, 1, 168-195.

American Accounting Association. Accounting Education Change Commission. Retrieved June 25, 2008, from http://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 the accounting 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 on education: 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, from http://aaahq.org/AECC/big8/index.htm

Association to Advance Collegiate Schools of Business--International (AACSB). 2003. Eligibility procedures and standards for business accreditation. Retrieved June 25, 2008, from http://www.aacsb.edu/accreditation/business/standards.pdf

Association to Advance Collegiate Schools of Business, Overview of assessment. Retrieved June 25, 2008, from http://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 and University Examiners. Handbook I. Cognitive Domain. New York: Longmans, Green.

CPA Vision AICPA. Retrieved June 25, 2008, from http://www.cpavision.org/vision.htm

Davidson, R. A. & B. A. Baldwin (2005). Cognitive skills objective in intermediate accounting textbooks: Evidence from end-of-chapter material. Journal of Accounting Education, April: 79-95.

Francis, M., T. C. Mulder & J. S. Stark (1995). Intentional learning: A process for learning to learn in the accounting curriculum. Accounting education series, Volume No. 12. Sarasota, FL: American Accounting Association.

Gainen, J. & P. Locatelli (1995). Assessment for the new curriculum: A guide for professional Accounting programs. Accounting education series, Volume 11. Sarasota, FL: American Accounting Association.

Karns, J. M., G. E. Burton & G. D. Martin (1983). Learning objectives and testing: An analysis of six principles of economics textbooks, using Bloom's taxonomy. The Journal of Economic Education, 14(3), 16-20.

Siegel, G. & J. E. Sorensen (1994). What corporate America wants in entry-level accountants. Management Accounting, 76(3), 26-31.

Sullivan, M. C. & R. L Benke, Jr. (1997). Comparing introductory financial accounting textbooks. Journal of Accounting Education, 15(2), 181-220.

Sanjay Gupta, Valdosta State University

Leisa L. Marshall, Valdosta State University Table 1: Leading Textbooks and Sample Discipline Name of Text Author(s) Publisher #Qs * Total Qs 1,141 AIS Accounting Romney & Prentice 89 Information Steinbart Hall Systems (10th Audit Auditing & Assurance Services (11th Arens, Prentice 205 Ed.) Ed.) Elder & Hall Beasley Cost Cost Accounting Horngren, Prentice 219 (12th Ed.) Datara & Hall Foster Intermediate Intermediate Accounting Keiso, Wiley 368 (12th Ed.) Weygandt & Wa Tax Individual Hoffman, Thomson 260 Income Taxes Smith & (2008 Ed.) Willis * Number of questions sampled Table 2: Inter-rater reliability results Discipline Total # % Questions Matched Matched AIS 29 18 62 Audit 44 33 75 Cost 46 35 76 Intermediate 75 64 85 Tax 53 41 77 Total 236 183 78 Table 3: Coverage of behavioral skills Discipline Questions Oral Written Technology AIS 89 5 9 Audit 205 16 Cost 219 1 Intermediate 368 10 13 Tax 260 16 16 Total 1,141 16 32 38 Overall Percent (%) 1.40% 2.80% 3.30% Table 4: Coverage of Bloom's Taxonomy Cognitive Skills Discipline Questions Knowledge/ Applications/ Synthesis/ Comprehend Analysis Evaluation AIS 89 9 39 41 Audit 205 87 80 38 Cost 219 43 69 107 Intermediate 368 88 255 25 Tax 260 53 179 28 Total 1,141 280 622 239 Overall 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-50 Likelihood Ratio 238.7302672 8 4.21E-47 N of Valid Cases 1141 0 cells (0%) have expected count less than 5. The minimum expected count is 18.64. Table 6: Coverage of Bloom's Taxonomy--Percentages Discipline Number of Knowledge/ Application/ Synthesis/ Questions Comprehend Analysis (%) Evaluation (%) (%) AIS 89 10 44 46 Audit 205 42 39 19 Cost 219 20 32 49 Intermediate 368 24 69 7 Tax 260 20 69 11