We use a health care application to illustrate how variance analysis can be used to benchmark costs across similar service delivery sites. Variances for personnel costs, typically the largest cost component in service organizations, are calculated for price, quantity, and skill mix components. Skill mix is important since employees with different compensation often work together to produce service outputs. We find that the joint variance, which arises when both prices and quantities differ, has more managerial implications when assigned to the quantity variance, rather than its traditional allocation to the price variance. Using time-driven activity-based costing also leads to a new variance that reflects the impact of personnel capacity differences between sites. Finally, we introduce two new visualization tools to display the variances. Educators can teach students how variance analysis reveals opportunities to reduce personnel costs by identifying and transferring best practices across sites.
{"title":"Variance Analysis: New Insights from Health Care Applications","authors":"R. Kaplan, Susanna Gallani","doi":"10.2308/issues-2021-031","DOIUrl":"https://doi.org/10.2308/issues-2021-031","url":null,"abstract":"We use a health care application to illustrate how variance analysis can be used to benchmark costs across similar service delivery sites. Variances for personnel costs, typically the largest cost component in service organizations, are calculated for price, quantity, and skill mix components. Skill mix is important since employees with different compensation often work together to produce service outputs. We find that the joint variance, which arises when both prices and quantities differ, has more managerial implications when assigned to the quantity variance, rather than its traditional allocation to the price variance. Using time-driven activity-based costing also leads to a new variance that reflects the impact of personnel capacity differences between sites. Finally, we introduce two new visualization tools to display the variances. Educators can teach students how variance analysis reveals opportunities to reduce personnel costs by identifying and transferring best practices across sites.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47746561","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This case instructs students through the preparation of a real-world business case with a sustainability theme. The case involves capital expenditure analysis and communication for installing solar panels on roofs of two warehouses in the Super-Savers Supermarkets supply chain. Installing solar panels would save electricity costs from the public grid and save carbon dioxide greenhouse gas emissions. There are insource and outsource scenarios. The business case has three parts: (1) use Excel (including goal seek) to prepare a financial model with a discounted cash flow method - to analyze incremental capital expenditures, costs, profit impacts, and carbon dioxide emission savings; (2) prepare a Word report that concisely communicates the financial model and business case, and (3) prepare a PowerPoint presentation that concisely communicates the financial model and business case. A practice financial modeling exercise is included. The case suits undergraduate and graduate management accounting courses.
{"title":"The Solar Panels Business Case: A Management Accounting Instructional Resource","authors":"M. Peters","doi":"10.2308/issues-2019-503","DOIUrl":"https://doi.org/10.2308/issues-2019-503","url":null,"abstract":"This case instructs students through the preparation of a real-world business case with a sustainability theme. The case involves capital expenditure analysis and communication for installing solar panels on roofs of two warehouses in the Super-Savers Supermarkets supply chain. Installing solar panels would save electricity costs from the public grid and save carbon dioxide greenhouse gas emissions. There are insource and outsource scenarios. The business case has three parts: (1) use Excel (including goal seek) to prepare a financial model with a discounted cash flow method - to analyze incremental capital expenditures, costs, profit impacts, and carbon dioxide emission savings; (2) prepare a Word report that concisely communicates the financial model and business case, and (3) prepare a PowerPoint presentation that concisely communicates the financial model and business case. A practice financial modeling exercise is included. The case suits undergraduate and graduate management accounting courses.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48584847","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The “gig” economy has exploded as more consumers purchase products and services from gig businesses and more workers pursue gig employment. This case uses a fictional gig company, HungryHound (HH), mirroring services provided by Grubhub, DoorDash, and UberEats, to expose students to the complexities of gig businesses and to areas requiring judgment in the revenue recognition standard. Specifically, students determine the appropriate revenue treatment among varying alternatives and apply the guidance in identifying the customer(s), determining principal and/or agent classifications, and reporting the financial statement effect for transactions. Completion of the case requires critical thinking in evaluating and applying ambiguous revenue guidance. Students also learn about current variation in accounting treatments among gig companies. The case is designed to give instructors flexibility, where case deliverables can be used together or as standalone assignments and can be deployed in an undergraduate or graduate intermediate accounting course or capstone course.
{"title":"Accounting for Revenue Recognition in the Gig Economy: An Instructional Case","authors":"C. Hux, Pamela A. Smith, Meghann Cefaratti","doi":"10.2308/issues-2020-040","DOIUrl":"https://doi.org/10.2308/issues-2020-040","url":null,"abstract":"The “gig” economy has exploded as more consumers purchase products and services from gig businesses and more workers pursue gig employment. This case uses a fictional gig company, HungryHound (HH), mirroring services provided by Grubhub, DoorDash, and UberEats, to expose students to the complexities of gig businesses and to areas requiring judgment in the revenue recognition standard. Specifically, students determine the appropriate revenue treatment among varying alternatives and apply the guidance in identifying the customer(s), determining principal and/or agent classifications, and reporting the financial statement effect for transactions. Completion of the case requires critical thinking in evaluating and applying ambiguous revenue guidance. Students also learn about current variation in accounting treatments among gig companies. The case is designed to give instructors flexibility, where case deliverables can be used together or as standalone assignments and can be deployed in an undergraduate or graduate intermediate accounting course or capstone course.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42720597","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This learning strategy provides accounting faculty with a detailed course design and materials for a 3-credit, 14-week RPA course at the graduate level. This learning strategy is valuable in four respects. First, it leverages existing materials in the public domain and provides accounting faculty with a potential framework for using these materials to create an RPA course. Second, it teaches students RPA concepts and provides them with hands-on skills. Third, although it features a stand-alone RPA course, specific modules from this course can also be used as non-technical tutorials and be integrated into existing accounting courses. Lastly, it features resource and experience sharing based on the course implementation. Overall, this learning strategy adds an alternative reference to accounting faculty considering teaching RPA.
{"title":"How to Teach a 14-Week Robotic Process Automation (RPA) Course for Accounting Students?","authors":"C. Zhang, M. Vasarhelyi","doi":"10.2308/issues-2021-013","DOIUrl":"https://doi.org/10.2308/issues-2021-013","url":null,"abstract":"This learning strategy provides accounting faculty with a detailed course design and materials for a 3-credit, 14-week RPA course at the graduate level. This learning strategy is valuable in four respects. First, it leverages existing materials in the public domain and provides accounting faculty with a potential framework for using these materials to create an RPA course. Second, it teaches students RPA concepts and provides them with hands-on skills. Third, although it features a stand-alone RPA course, specific modules from this course can also be used as non-technical tutorials and be integrated into existing accounting courses. Lastly, it features resource and experience sharing based on the course implementation. Overall, this learning strategy adds an alternative reference to accounting faculty considering teaching RPA.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48966604","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This instructional case was inspired by a real-world incident, involving a highly publicized cruise ship mishap. The breakdown at sea generates significant negative publicity, which has an adverse effect on corporate reputation. Consequently, there is an increased reputation risk, which may have implications for asset impairment testing. The case requires students to apply fair value standards relevant to non-financial assets is the impairment testing process. The case can be used for impairment testing under either US GAAP or IFRS, and it can be used to compare the methods. The case demonstrates that asset impairment testing requires professional judgment to be exercised. If an impairment loss is recorded, it will affect executive bonuses. Students are asked to use an ethical framework for guidance to resolve possible ethical issues. This case can be used in an international accounting course, and an intermediate or graduate-level financial accounting course.
{"title":"The Crusin Lines: Asset Impairment, Ethical Issues, and Reputation Risk","authors":"W. Bremser, Benita M Gullkvist","doi":"10.2308/issues-19-107","DOIUrl":"https://doi.org/10.2308/issues-19-107","url":null,"abstract":"This instructional case was inspired by a real-world incident, involving a highly publicized cruise ship mishap. The breakdown at sea generates significant negative publicity, which has an adverse effect on corporate reputation. Consequently, there is an increased reputation risk, which may have implications for asset impairment testing. The case requires students to apply fair value standards relevant to non-financial assets is the impairment testing process. The case can be used for impairment testing under either US GAAP or IFRS, and it can be used to compare the methods. The case demonstrates that asset impairment testing requires professional judgment to be exercised. If an impairment loss is recorded, it will affect executive bonuses. Students are asked to use an ethical framework for guidance to resolve possible ethical issues. This case can be used in an international accounting course, and an intermediate or graduate-level financial accounting course.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41450957","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In today’s business world, it is essential that accountants be concerned about cybersecurity in their organizations and in the work they perform. Despite increasing importance as well as regulatory and professional emphasis, most accounting curricula limit cybersecurity coverage to accounting information systems courses. We argue that cybersecurity concepts should be introduced at all levels of the accounting curriculum, and we provide six short, open-ended cases highlighting the relationship between cybersecurity and the accounting curriculum. Instructors can assign one or more of these cases as individual or group exercises in introductory, core, and/or advanced accounting classes. The cases address cybersecurity disclosure issues in financial reporting, the impact of a client cybersecurity breach on financial audit, the risks to tax preparers of storing personally identifiable information, calculating and evaluating the costs of cybersecurity breaches, and examining cybersecurity disclosures in 10-Ks. Case efficacy was evaluated in multiple courses and learning environments.
{"title":"Accountants, Cybersecurity isn't just for 'Techies': Incorporating Cybersecurity into the Accounting Curriculum","authors":"Diane J. Janvrin, Gray Joy, Scott R. Boss","doi":"10.2308/issues-2021-001","DOIUrl":"https://doi.org/10.2308/issues-2021-001","url":null,"abstract":"In today’s business world, it is essential that accountants be concerned about cybersecurity in their organizations and in the work they perform. Despite increasing importance as well as regulatory and professional emphasis, most accounting curricula limit cybersecurity coverage to accounting information systems courses. We argue that cybersecurity concepts should be introduced at all levels of the accounting curriculum, and we provide six short, open-ended cases highlighting the relationship between cybersecurity and the accounting curriculum. Instructors can assign one or more of these cases as individual or group exercises in introductory, core, and/or advanced accounting classes. The cases address cybersecurity disclosure issues in financial reporting, the impact of a client cybersecurity breach on financial audit, the risks to tax preparers of storing personally identifiable information, calculating and evaluating the costs of cybersecurity breaches, and examining cybersecurity disclosures in 10-Ks. Case efficacy was evaluated in multiple courses and learning environments.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":"81 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68983910","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Each year, millions of people donate blood at blood centers run by not-for-profit organizations such as the American Red Cross, which supply blood products to hospitals. Many people can also give blood plasma and receive cash compensation from for-profit pharmaceutical companies, which use plasma to develop and manufacture medical products. Blood donations raise interesting accounting issues. How should the blood and plasma donations be accounted for by a not-for-profit organization and a for-profit company, respectively? How are these similar transactions manifested differently in their financial statements? Is the accounting treatment consistent with the objectives of the entities? What are the ethical and social issues in paying for plasma donation? The case leverages students’ familiarity with accounting standards for business enterprises to deepen their understanding of not-for-profit accounting. The case also challenges students to think critically about accounting concepts and improve their Codification research skills.
{"title":"Accounting for Blood Donation: An Instructional Case","authors":"Qing L. Burke, Mahendra R. Gujarathi","doi":"10.2308/issues-2021-020","DOIUrl":"https://doi.org/10.2308/issues-2021-020","url":null,"abstract":"Each year, millions of people donate blood at blood centers run by not-for-profit organizations such as the American Red Cross, which supply blood products to hospitals. Many people can also give blood plasma and receive cash compensation from for-profit pharmaceutical companies, which use plasma to develop and manufacture medical products. Blood donations raise interesting accounting issues. How should the blood and plasma donations be accounted for by a not-for-profit organization and a for-profit company, respectively? How are these similar transactions manifested differently in their financial statements? Is the accounting treatment consistent with the objectives of the entities? What are the ethical and social issues in paying for plasma donation? The case leverages students’ familiarity with accounting standards for business enterprises to deepen their understanding of not-for-profit accounting. The case also challenges students to think critically about accounting concepts and improve their Codification research skills.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43500008","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
K. Smith, Malissa L. Davis, C. Malone, Lisa Owens-Jackson
Historically black colleges and universities (“HBCU”) provide an academic environment that contributes to increased student success and social mobility. However, this environment introduces unique working conditions for faculty members. The existing academic literature does not provide evidence about the motivation and job satisfaction of HBCU accounting faculty. This study addresses that gap and provides survey evidence on this unique group's motivation and job satisfaction. We find that respondents are motivated by helping others but are not satisfied with institutional operations, research resources, and compensation. We also find that tenured faculty have lower job satisfaction than non-tenured faculty. Demographically, we find that the respondents were older, tenured, and have significant practitioner experience. Taken together, these findings identify opportunities for improvement in job satisfaction for HBCU accounting faculty.
{"title":"Faculty That Look Like Me: An Examination of HBCU Accounting Faculty Motivation and Job Satisfaction","authors":"K. Smith, Malissa L. Davis, C. Malone, Lisa Owens-Jackson","doi":"10.2308/issues-2020-090","DOIUrl":"https://doi.org/10.2308/issues-2020-090","url":null,"abstract":"Historically black colleges and universities (“HBCU”) provide an academic environment that contributes to increased student success and social mobility. However, this environment introduces unique working conditions for faculty members. The existing academic literature does not provide evidence about the motivation and job satisfaction of HBCU accounting faculty. This study addresses that gap and provides survey evidence on this unique group's motivation and job satisfaction. We find that respondents are motivated by helping others but are not satisfied with institutional operations, research resources, and compensation. We also find that tenured faculty have lower job satisfaction than non-tenured faculty. Demographically, we find that the respondents were older, tenured, and have significant practitioner experience. Taken together, these findings identify opportunities for improvement in job satisfaction for HBCU accounting faculty.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-01-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48428478","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
J. D. Keyser, Jason L. Smith, Nathaniel M Stephens
In 2017, KPMG discovered that several high-ranking partners in its Department of Professional Practice (DPP) had surreptitiously obtained highly confidential information on upcoming PCAOB inspections. In obtaining this information, these KPMG partners were able to anticipate and prepare for PCAOB inspections, causing the firm’s inspection deficiency rate to plummet and its executives to tout the success of their efforts to improve audit quality. Once the firm discovered the scandal, the individuals involved were terminated, and six of them were ultimately convicted of felonies. This case study introduces students to relevant auditing standards, audit quality concepts, and facilitates discussion of a number of ethical issues. Learning objectives for this case include obtaining an understanding of the PCAOB and its inspection program, understanding audit documentation standards, demonstrating the ability to evaluate ethical issues, applying the fraud triangle in a unique setting, and assessing responsibility for the various parties involved.
{"title":"An Audit Quality Inspection Scandal: Ethical Lapses in a Misguided Attempt to Alleviate Regulatory Scrutiny","authors":"J. D. Keyser, Jason L. Smith, Nathaniel M Stephens","doi":"10.2308/issues-2021-004","DOIUrl":"https://doi.org/10.2308/issues-2021-004","url":null,"abstract":"In 2017, KPMG discovered that several high-ranking partners in its Department of Professional Practice (DPP) had surreptitiously obtained highly confidential information on upcoming PCAOB inspections. In obtaining this information, these KPMG partners were able to anticipate and prepare for PCAOB inspections, causing the firm’s inspection deficiency rate to plummet and its executives to tout the success of their efforts to improve audit quality. Once the firm discovered the scandal, the individuals involved were terminated, and six of them were ultimately convicted of felonies. This case study introduces students to relevant auditing standards, audit quality concepts, and facilitates discussion of a number of ethical issues. Learning objectives for this case include obtaining an understanding of the PCAOB and its inspection program, understanding audit documentation standards, demonstrating the ability to evaluate ethical issues, applying the fraud triangle in a unique setting, and assessing responsibility for the various parties involved.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2022-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48064185","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the influences of elitism and merit in new accounting faculty. Building on research showing that search committees value pedigree in hiring new faculty, we theorize both aristocratic (e.g., accessing or reinforcing elite networks) and meritocratic (e.g., signaling stronger future research potential) influences on the hiring of new accounting faculty. Using curriculum vitae from 381 Accounting Ph.D. Rookie Recruiting and Research Camps, we examine whether candidates graduating from elite accounting institutions place disproportionately higher than do their non-elite peers. Results suggest that elite pedigree predicts placement rank among candidates without favorable publication outcomes at top journals (e.g. acceptance or invitation to resubmit) but not among candidates with favorable publication outcomes. The results suggest joint and complex aristocratic (elite-based) and meritocratic (productivity-based) influences in new accounting faculty hiring.
{"title":"Aristocracy or Meritocracy? The Role of Elite Pedigree and Research Performance in New Accounting Faculty Placements","authors":"Sid Bundy, P. Mohapatra, Matthew Sooy, D. Stone","doi":"10.2308/issues-2020-083","DOIUrl":"https://doi.org/10.2308/issues-2020-083","url":null,"abstract":"This paper investigates the influences of elitism and merit in new accounting faculty. Building on research showing that search committees value pedigree in hiring new faculty, we theorize both aristocratic (e.g., accessing or reinforcing elite networks) and meritocratic (e.g., signaling stronger future research potential) influences on the hiring of new accounting faculty. Using curriculum vitae from 381 Accounting Ph.D. Rookie Recruiting and Research Camps, we examine whether candidates graduating from elite accounting institutions place disproportionately higher than do their non-elite peers. Results suggest that elite pedigree predicts placement rank among candidates without favorable publication outcomes at top journals (e.g. acceptance or invitation to resubmit) but not among candidates with favorable publication outcomes. The results suggest joint and complex aristocratic (elite-based) and meritocratic (productivity-based) influences in new accounting faculty hiring.","PeriodicalId":46324,"journal":{"name":"ISSUES IN ACCOUNTING EDUCATION","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48295478","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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