AIR Summer 2009

Resource Consumption Accounting

There is a pandemic in the accounting profession in businesses across the United States. This problem has been festering for years and is in dire need of fixing. Somehow American companies, large and small, have lost their way. But this has nothing to do with Enron. The accounting industry has lost sight of their most important clients: management. According to a July 2003 study done by the Institute of Management Accountants and Ernst and Young, 98% of managers believe their cost data is distorted while almost 40% believe their cost data is significantly distorted. Management is not getting accurate information to make decisions, and if 98% of managers recognize this fact, we need a new solution that supports decision making.

Resource Consumption Accounting (RCA) is an emerging management accounting method. RCA is easier to understand, provides better decision-support, produces more accurate results, and may be the first accounting system praised by non-accountants and managers.
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Accounting Students and the First Year Experience Course

Student retention and appropriate academic preparation of graduates are two areas of concern for many universities. Accounting programs are faced with the challenge of attracting high quality students and then retaining these students to graduation.

The purpose of this paper is to describe a Business Freshman Year Experience course designed to provide students with the opportunity to interact with professors and professionals in
their intended field of study and to integrate them into the university and into their major very early in their experience. Students write a series of essays about topics presented in the course. For the final essay, students are asked to indicate what they learned in the course and how their perspectives on majoring in a business discipline have changed. Results of analysis of these final essays are presented.

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An Alternative Approach for Teaching the Interest Method Amortization of Bond Premiums and Discounts

Discounts and premiums occur when the issuance price of a bond is more (premium) or less (discount) than its principal or face value. This result is due to a difference between the market or effective rate of interest and the coupon or face interest rate of the bond on the issuance date. If the market rate exceeds the coupon rate, the bond is issued at a discount, and if the market rate is less than the coupon rate, the bond is issued at a premium.

This paper presents an alternative approach for teaching the interest method amortization of bond premiums and discounts.

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The Apartment Hunt: A Short Case to Bridge the Gap between Students Lack of Business Experience and Learning to Define Information Requirements in Accounting Information Systems or Managerial Accounting Courses

Undergraduate students with little work experience have difficulty beginning to learn managerial accounting and information systems concepts. These students have little frame of reference to determine specific information needs for managerial decisions. One way to attempt to bridge this gap between conceptual information requirements and real world business processes is to design assignments that take advantage of experiences common to many students, for example, searching for an apartment or a place to live. Students’ prior experiences should aid learning about the conceptual task of defining information needs. With this in mind, we ask students to define the information requirements for deciding on an apartment. This is an introductory exercise that can be used in either an accounting information systems (AIS) course focused on defining information requirements or in a managerial accounting course focused on information requirements for decision making.

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What Is the Future of Accounting Education?

A reporter interviewed me on the changes I see forthcoming in accounting education. I thought these questions and my answers make a good summary for this issue of Trends.
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Accounting Instructors’ Report, Summer 2009: Table of Contents

TRENDS
What Is the Future of Accounting Education?
Belverd E. Needles, Jr., Ph.D., CPA

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