The Evolution of a Graduate Capstone Accounting Course

Cathleen S. Burns, PhD, CPASenior Instructor, Accounting Division

Leeds School of BusinessUniversity of Colorado – Boulder

419 UCBBoulder, CO 40309-0419

303-492-4076cathleen.burns@colorado.edu

The author would like to thank Jim Rebele, Don Wygal, and an anonymous reviewer for their helpful comments and suggestions. The author will share course materials described in this article.

July 3, 2006 Revision #4

The Evolution of a Graduate Capstone Accounting Course

Abstract

This paper discusses how the design of a graduate capstone accounting course

evolved over three years. Various stakeholders impacted the course design and materials

for a graduate capstone accounting course that is required for MS Accounting degree

students. The course has three, five-week modules: accounting ethics, earnings

management, and business strategy. The accounting ethics module emphasizes codified

principles of ethics and professional behavior in accounting. The integrating theme of the

last two modules is how accounting professionals can detect earnings management being

used as a short-term solution to a longer-term strategic problem. Materials are included

that may assist other schools contemplating a capstone accounting course in their 150-

hour program.

2

The Evolution of a Graduate Capstone Accounting Course

1. Introduction

This paper describes the design and materials for a graduate capstone accounting

course that integrates material covered on the revised CPA exam, core competencies

identified in the AICPA accounting education framework, and business and society goals

that are a part of a donor gift to the Leeds School of Business at the University of

Colorado at Boulder. The goal of this paper is to help others who may be designing new

accounting and ethics courses that respond to recommendations from various

stakeholders.

Capstone courses are an important part of most curricula because they provide an

opportunity to reflect on what has been learned, integrate both general education and

major coursework, and help the transition to the professional world (Gardner & Van deer

Veer, 1998). Jervis and Hartley (2005) described their experience designing and teaching

an undergraduate capstone accounting course addressing university goals, department

mission, and AICPA core competencies. Although capstone courses are recommended as

a key part of the accounting curriculum (Arya, Fellingham & Schroeder, 2003), there are

no articles in the accounting education literature that specifically describe experiences

designing and teaching a graduate capstone accounting course.

The first section of this article describes stakeholders that were considered when

designing the graduate capstone accounting course. The second section describes many

aspects of the course design and implementation over three semesters. The third section

summarizes how the course design responds to various stakeholders.

3

2. Stakeholder Input to Course Design

2.1. Ethics coverage in the accounting curriculum

As a result of recent scandals, there have been numerous requests from a variety

of stakeholders for university educators to increase their coverage of ethics in separate

courses, to integrate ethics into current courses, or to do both (Copeland, 2005; Garten,

2005; PricewaterhouseCoopers, 2003). Despite the debate on whether or not ethics can

be taught, or taught at a college student’s relatively late life stage (Piper, Gentile, and

Parks, 1993), most stakeholders recommend that ethics be taught in the business

curriculum, even if it is “just in case.”

How ethics is taught as part of the accounting curriculum is left to faculty who

design and teach separate or integrated courses (Titard, Braun, & Meyer, 2004). An

inventory of support materials has been assembled by Thomas (2004) to facilitate faculty

designing a separate ethics course or integrating ethics into existing accounting courses.

The World Resources Institute and The Aspen Institute’s Business and Society Program

highlights courses that prepare MBAs for social and environmental stewardship at

http://beyondgreypinstripes.org/search/search_coursework.cfm for faculty thinking

broadly about potential topics that could be included in their course design.

2.2. Donor gift

A donor gift prompted the reevaluation of the accounting curriculum at the

University of Colorado at Boulder. The Leeds family provided a major gift to the

University to name a school that would “become a nationally recognized business school,

known and valued for its leadership in developing high-quality business professionals,

4

with an emphasis on socially responsible behavior, advancing diversity, and promoting

the natural environment” (donor gift letter dated 10-10-01).

The donors requested that the faculty require all undergraduates to take at least

two courses on business and society issues and that all graduate students take at least one

course on business and society. The faculty has broadly interpreted “business and

society” to include ethics, sustainability, and the environment. Students in the MS

Accounting program take the graduate capstone accounting course to satisfy their

graduate business and society requirement, while undergraduate accounting majors select

among a menu of business and society capstone courses such as Sustainable Marketing,

Global Business Ethics, and Microfinance.

2.3. AICPA core competency framework

About the same time as the donor gift, the American Institute of Certified Public

Accountants (AICPA) published the core competency framework for accounting

education. The AICPA core competency framework identifies functional, personal, and

broad business competencies desired of all accounting graduates

http://ceae.aicpa.org/Resources/Education+and+Curriculum+Development/

Core+Competency+Framework+and+Educational+Competency+Assessment+

Web+Site/. Jervis and Hartley (2005) demonstrate how components of their

undergraduate capstone accounting course meet the AICPA core competencies. The

AICPA core competency framework is one way to address program goals required by the

new AACSB learning assurance standards

(http://www.aacsb.edu/accreditation/business/STANDARDS.pdf.)

5

2.4. CPA exam revisions

The third event that encouraged us to reevaluate our accounting curriculum was

recent revisions to the content and format of the uniform CPA exam. The revised CPA

exam includes a content section called Business Environment and Concepts (BEC).

Primary topics in this new section are economics, finance, information systems, and

strategy. Although these topics are typically covered in business degree core

requirements, they were not specifically covered in earlier versions of the CPA exam.

The exam format has also changed from a paper and pencil exam to a completely on-line

exam with simulations and research problems that require students to be comfortable with

a variety of computer software manipulations and to provide a limited writing sample.

2.5. Accounting curriculum gap analysis

During summer 2004, an accounting faculty member developed a comprehensive

analysis of the University of Colorado at Boulder’s accounting curriculum and how it

addressed content and skills included in the new uniform CPA exam that was

administered for the first time in April 2004

(http://www.cpa-exam.org/cpa/how_prepare.html). The curriculum gap analysis

highlighted content areas, particularly in the Business Environment and Concepts section,

and skills (e.g., research and writing) that needed to be expanded in a revised curriculum.

A second curriculum analysis was prepared by accounting faculty during spring

2005. All faculty described activities and assessment strategies in their respective

courses that match program learning objectives centered on the development of core

competencies defined in the AICPA framework. These two curriculum analyses are part

6

of the Leeds School’s learning assurance strategy that will be presented in the next

AACSB accreditation visit.

As described later, the first offering of a revised graduate capstone accounting

course during spring 2004 filled some of these identified gaps. No one course can meet

all stakeholder initiatives and requests. The overlap in stakeholder objectives makes the

task less daunting. Many of the objectives are extensions of earlier recommendations

from groups like the Accounting Education Change Commission (AECC, 1996) that may

already be included in an accounting department’s earlier accounting curriculum

revisions. Curriculum gap analysis using the AICPA model is a good first step in

curriculum and course redesign.

3. Course design

3.1. Course description

The graduate capstone accounting course (ACCT 6350) taught at the University

of Colorado at Boulder is titled “Current Issues in Professional Accounting” in the course

catalog. This title provides wide latitude for the instructor to determine what will be

covered in the course. The working title for the current course is “The Ethics of

Accounting Decision Making.” The course deals with how firms and their advisors

improve performance through short-term ethical or unethical (legal and illegal are NOT

the same thing) earnings management or longer-term (and harder) strategic redirection.

The course starts broadly and ends broadly with very focused material in the

middle of the course. The course begins with a review and expansion of students’

knowledge of ethical theory. Philosophical principles are then applied to a variety of

specific challenges facing professional accountants in auditing, tax, management

7

accounting, and consulting careers. The earnings management continuum is then

illustrated through extensive analysis of financial statements and corporate governance.

Since aggressive accounting may accompany a failing corporate strategy, strategic

redirection is suggested as a longer-term effort to improve earnings. The course ends

with student teams presenting strategic and financial due diligence on companies in a

variety of industries.

3.2. Course objectives

The graduate capstone accounting course objectives are broader than the

objectives in an accounting course where technical knowledge tends to dominate skill

development. The course objectives have evolved over three semesters from a few global

goals (e.g., prepare for the BEC section of the CPA exam, exercise moral courage, and

develop AICPA core competencies) to very specific objectives that are tied to assessment

strategy as encouraged by the AACSB’s new Learning Assurance Standards

(www.aacsb.edu). For spring semester 2006, the course objectives that were linked

directly with student assessment include:

Compare, contrast and evaluate the variety of objectives in social responsibility (a.k.a. citizenship, sustainability) reports from two different industries.

Identify and resolve challenges in providing non-traditional assurance services based on existing auditing/attestation standards and codes of conduct.

Analyze potentially abusive tax shelters according to various stakeholder positions and existing standards and tax laws.

Identify common failures across financial scandals in multiple industries.

8

Apply official codes and standards for professional behavior as auditors, management accountants, tax preparers, and consultants to hypothetical dilemmas in different accounting careers.

Communicate how a variety of ethical theories are applied to current events presented in The Wall Street Journal.

Articulate how the composition of the Board of Directors may impact earnings management decisions before and after the Sarbanes-Oxley Act.

Demonstrate strategies for detecting possible earnings management on the income statement, balance sheet, and statement of cash flows for several firms within the same industry.

Select, calculate and analyze financial ratios including bankruptcy scores for an IPO to support a hypothesis about the firm’s going concern status.

Develop compelling arguments for why a standard unqualified opinion, qualified opinion and/or a disclaimer or opinion could be supported with evidence included in SEC documents.

Select risk factors identified in SEC documents for a firm that are most likely to be associated with fraud risk based on SAS 99. Develop potential controls to mitigate each of these risks.

Compare, contrast and evaluate a firm’s and its key competitors’ corporate-level strategy(ies) within the same industry.

Analyze a firm’s corporate governance structure and how it increases/decreases the firm’s risk management.

Recommend changes to a firm’s strategy based on a detailed case analysis.

Develop advanced analytical, research, oral and written presentation, and interpersonal skills using a variety of publicly-available resources across a variety of industries in individual and team assignments.

Some of these course objectives introduce new material while others apply

knowledge from previous coursework in new settings. Table I shows how key

assessment strategies used in the course map against elements of the revised CPA exam,

AICPA core competencies, and the Business and Society donor initiative.

INSERT TABLE I HERE

9

3.3. Texts

The modules are linked to different texts and are taught in the following order:

accounting ethics, earnings management, and business strategy. Accounting ethics

provides the philosophical and regulatory (i.e., codes of conduct) foundation across a

variety of accounting careers. Several high-profile accounting scandals are studied

through both philosophical and earnings management lenses and provide segue into the

second module. The second module on earnings management refers to the ethical

foundation developed in the first module when evaluating accounting choices across the

earnings management continuum. Aggressive and illegal earnings management is

portrayed as a short-term fix to a problem that probably requires a change in strategy.

Business strategy fundamentals are discussed at the beginning of the third module. The

last three weeks of the semester are filled with team presentations of strategic audits of

companies across a wide variety of industries.

Two texts were used during the first course offering in Spring 2004: Business and

Professional Ethics for Directors, Executives, and Accountants (Brooks, 2004) and

Business Models: A Strategic Management Approach (Afuah, 2004). Students also read

articles from The Wall Street Journal to prepare oral and written summaries during the

first twelve weeks of the semester.

Feedback from the students after the first course offering was that the texts were

too general and focused more on auditing and strategy than other accounting careers,

such as tax accounting. Different textbooks were, therefore, selected for the spring 2005

semester. An accounting ethics text (Duska & Duska, 2003) was used for the first five

weeks of the semester and an earnings management text (Giroux, 2004) was used for the

10

second five weeks of the semester. A business strategy text (Harrison, 2004) was used

for the last five weeks of the semester. One of the instructor’s personal costs of

switching texts is that the second offering of the course was essentially a new

preparation.

In addition to the texts, a selection of academic articles was assigned beginning

with the spring 2005 semester (Appendix A). Feedback from the students after the

second course offering was that there was too much reading and not enough time to

discuss the readings. During the spring 2006 semester, the strategy text (Harrison, 2004)

was eliminated and three more academic articles were added. Since the strategy text was

eliminated, key management strategy content was covered in two days using materials

summarized by the instructor. The Wall Street Journal is used more extensively

throughout the course to illustrate all three topics (i.e., ethics, earnings management, and

strategy) as they unfold in the media.

One significant change between the spring 2004 and spring 2005 offerings of the

graduate capstone accounting course was adding additional perspectives to accounting

scandals that tend to be presented in most textbook presentations with only one view.

Students were eager to debate alternative accounting treatments, legal/illegal vs.

ethical/unethical, and how to manage conflicts of interest since the class agreed that they

could not be totally avoided in professional careers.

3.4. Cases

Cases are used throughout the semester. The first case in the accounting ethics

section is a two-page case questioning the independence of wine expert Robert Parker

(Richardson, 2004). This case stimulates significant student discussion early in the

11

semester. Comparisons are drawn between Parker’s evaluation of particular wines and

auditors’ evaluations of firms’ financial statements.

As you would expect, Enron, Andersen, and WorldCom are part of the ethics text

(Duska & Duska, 2003) with the classic question of “where were the auditors?”

Supplemental readings from academic journals (e.g., Dugan, Berman & Barrionuevo,

2002; Morrison, 2004) looked at Enron and Andersen from the conflicting perspectives

of employees from both of these organizations. The purpose of presenting both sides of

the argument is to encourage classroom debate and enhance students’ professional

skepticism.

During spring 2005 and 2006, The Wall Street Journal chronicled the court cases

of many of the Enron and WorldCom participants that were introduced in the texts.

However, new and unexpected cases emerged throughout the semester. Because the

students chose what Wall Street Journal articles they thought were most relevant to

present to the class, general themes developed around independence in fact and

appearance, and conflicts of interest, in many professions. The students continually

asked why other professionals were not being criticized as much as accountants. For

example, who provides oversight to: large banks providing firm valuations? Lawyers

issuing comfort letters? Pharmaceutical consultants proclaiming the benefits of new

drugs? Many cases emerged in The Wall Street Journal that expanded the scope of our

discussion of accounting ethics to professional ethics.

The earnings management text (Giroux, 2004) uses Hilton Hotels as an integrative

case throughout the text. Comparisons of Hilton Hotels to Marriott Hotels and the

Mandalay Bay Group are integrated in end-of-chapter financial analysis spreadsheet

12

assignments. It is important to use a common data set for these spreadsheet assignments

(e.g., Mergent Online) so that class time is focused on insights resulting from the

analysis, and not data reconciliation. Periodic developments in the hotel industry and the

three comparison firms were also part of The Wall Street Journal readings.

Finally, the students formed their own teams to study a company of their choice

from strategic, earnings management, and ethical perspectives. Their case project is

described in detail below. A text is no longer used for the strategy section of this course.

3.5. Assessment

Course learning objectives were identified and discussed earlier in the paper. The

majority of a student’s grade is determined by how well the student applies what was

learned in class to new business situations on two individual take-home research exams

and a case presentation. The grade breakdown is two individual take-home research

exams over the ethics and earnings management texts (50% of grade), a group industry

analysis and case company paper (23%), a group oral presentation of the company project

(7%), individual spreadsheet homework (12%), and various evaluations of case and

individual class participation (8%).

3.6. Take-home exams and honor code

The University has a student-run honor code that facilitates take-home exams

(www.colorado.edu/academics/honorcode/Home.html). The exams were research-based

and graded by the instructor. Each exam covered one of the texts and used cases recently

published in Issues in Accounting Education (Verreault, Yang, & Angel, 2004; Coulter &

Vogel, 2004). Students were limited to ten typed pages, single-spaced for each take-

home exam. A grading rubric was provided after the first exam during the first course

13

offering. Although it takes time to create rubrics, doing so facilitates grading and clearly

communicates performance expectations, as suggested in many assessment resource

manuals. An original exam question and the associated grading rubric are presented in

Appendix B to communicate exam style and to clarify expectations.

3.7. Case project

During the spring 2005 semester, a list of 100 large publicly traded firms with ties

to a founding family was given to the students as a population of companies from which

to select a case project company. Companies with ties to a founding family were

hypothesized to have corporate governance challenges under The Sarbanes-Oxley Act.

During the spring 2006 semester, Business Ethics 100 Best Corporate Citizens 2005 was

used as the company population available for selection. Companies selected during the

prior year are not available choices during the current year.

Students self-selected their teams of 3-4 students and then placed bids on three

different companies. Expectations for case presentations, along with a grading rubric for

the oral presentation and group paper were distributed in class. Oral presentations were

20-25 minutes in length (assuming 3-4 group members), split as evenly as possible across

the team members with five-ten minutes for questions posed by the students and

instructor. Extensive use of presentation software (e.g., PowerPoint) to develop attractive

visual aids was encouraged.

The case company grade was based on both overall content and on individual and

team presentation skills. All team members completed peer evaluation forms to identify

any freeloaders or exceptional team leadership. Students earned points for the

completion of peer evaluation forms and for their effort as reported by their peers.

14

Students not presenting their own case in class that day provided received points for

providing detail feedback to each presenting team. The anonymous peer feedback forms

received after their “oral paper draft” presentations helps improve students’ written

papers before they were due on the final exam date. Bid sheets, peer evaluation sheets,

and team feedback forms are all available from the instructor. Case guidelines are

included as Appendix C.

3.8. Student course evaluations

The university uses Faculty Course Questionnaires (FCQ) to evaluate teaching

quality. The FCQs are available at the university’s website and are used by students in

selecting instructors and courses.

In general, the students’ evaluations of the first offering of the graduate capstone

accounting course in spring 2004 were a full grade below the instructor’s average scores

for five sections of cost management and three sections of the undergraduate capstone

strategy course taught at the University of Colorado at Boulder. The workload in the

graduate capstone accounting course was adjusted downward from a 7.66 (on a nine-

point scale) to a 6.92 during the spring 2005 semester by eliminating one of the three

take-home exams and adding spreadsheet assignments. A capstone course workload in

the 7.0 range can be compared to the Accounting Division average of 5.59 for the spring

2004 semester. The Division average of 5.59 includes all undergraduate and graduate

courses offered, and so the average is negatively biased from what we would expect of a

graduate course only workload.

Another instructor who taught the capstone course for the first time in a different

format during spring 2003 also had scores that were 1-2 levels below that instructor’s

15

average scores for other courses. The instructor’s learning curve, between the first and

second offerings of the capstone course, is evident in improved FCQ scores. However, a

faculty member may be discouraged about teaching the course again after an exhausting

first semester attempt at curriculum innovation.

4. How the course design responds to stakeholders

In the first section of this paper, three stakeholders were introduced as important

to the design of the graduate capstone accounting course. Other than this new course,

there is no other course in the accounting curriculum that is dedicated to business and

society issues within an accounting context that would satisfy the donor’s request. The

accounting curriculum at the University of Colorado at Boulder also needs to address the

content and format of the CPA exam since most of the students in the graduate capstone

accounting course will take the CPA exam shortly after graduation.

The graduate accounting capstone course is reading-intensive, Excel-intensive,

research-intensive, and writing-intensive (and therefore, grading-intensive). These

activities provide opportunities for students to develop core competencies identified in

the AICPA core competency framework and demonstrate learning in various course

assessments as promulgated by the new AACSB learning assurance standards. The

AICPA core competency framework was jointly developed by academics and

practitioners and provides a good framework for designing course and accounting

program learning outcomes and assessment strategies required by the AACSB. There are

excellent assessment tools at the AICPA’s website (www.aicpa.org).

While stakeholder requests are not completely addressed in the current course

design, a commitment to continuous improvement should assure that most of the

16

objectives are achieved each semester. With regard to the most important (most urgent?)

stakeholders, college administrators are satisfied that this course meets the donor’s

requests. The new course design also fills a CPA exam BEC section content coverage

gap in strategy. Graduate accounting students would have had no exposure to strategy

without this course since the undergraduate capstone course has evolved from a standard

management strategy course to a menu of business and society offerings with limited

strategic concepts.

5. Conclusion

Practitioners, faculty, and students have responded favorably to the format and

content of the graduate capstone accounting course. It is the hope of the instructor that in

the long term, Leeds School accounting graduates will be differentiated from other

graduates because of the required business and society initiative coursework, the

strengthening of moral courage from dealing with controversial cases, and the

development of professional writing and research skills.

Recent alumni working in public accounting tell us that they spend significant

time researching topics in specialized industries, similar to what they did in their exams

and case project. Recent alumni also tell us that, contrary to their expectations, they

spend much more time writing than calculating. Typical writing tasks involve

documenting business processes, summarizing client interviews, and evaluating

alternative financial statement treatments. The graduate capstone accounting course

provides a good transition for students from their academic careers into their professional

careers and helps prepare them for the CPA exam.

17

Capstone courses provide the opportunity for students to reflect, integrate, and

transition into the professional world. This last chance at adding value to our students’

lives may impact their commitment to the university after they graduate (Gardner & Van

derVeer, 1998). As instructors and program directors, we should take seriously how the

short-term investment in course design for a capstone course can enhance our lifelong

relationships with the students we graduate into the accounting profession.

18

TABLE 1: GRADUATE CAPSTONE ACCOUNTING COURSE DESIGN

AICPA CORE COMPETENCIES

CPA EXAM BUSINESS ENVIRONMENTAL CONCEPTS

BUSINESS AND SOCIETY DONOR INITIATIVE KEY ASSESSMENT STRATEGY

Functional Financial Statement Analysis

Stakeholder analysis Identify relevant stakeholders in tax shelter case using Integrative Social Contracts Theory (norms and hypernorms).

(e.g., Risk Analysis; Measurement; Reporting; Research)

Providing Assurance on Non-Financial Reports (corporate social responsibility reports)

Identify challenges in providing non-traditional assurance services based on guidance from The Sarbanes-Oxley Act, AICPA Code of Ethics, and auditing standards.

Earnings Management Indicators

Integration of comprehensive ratio analysis of Hilton Hotels and its competitors with information shared on SEC reports; Case Project Analysis

Corporate Governance Criteria Evaluation of Board of Directors for e-commerce firm. Evaluation of Board of Directors for case project analysis.

Personal Information Systems Financial statement analysis using Excel. Extensive use of library resources to complete exams and case analysis.

(e.g., Professional Demeanor; Interaction; Use of Technology)

Development of moral courage and discussion of controversial topics

Oral and Written Case Project Presentations;Oral and Written WSJ Article Presentations; Degree of professional skepticism demonstrated in all assignments.

Business Strategy Social responsibility (sustainability) reporting; Industry Analysis

Compare and contrast two corporate social responsibility reports.

(Industry/Global/Customer/Regulatory Perspectives)

Case Project Analysis: Strategy; Situation Analysis; Financial Analysis; Corporate Governance; Recommendations

APPENDIX A: Course Reading Materials (includes two texts)

Ethics, Earnings Management and Business Strategy1. The Wall Street Journal: Student-selected articles presented during first 12

weeks of course (three articles per day)

Accounting Ethics2. Accounting Ethics by Duska and Duska (2003) 10 chapters with 5 appendices3. Grover, S. L. (2005). The Truth, the Whole Truth, and Nothing but the Truth:

The Causes and Management of Workplace Lying. Academy of Management Executive 19(2), 148-157.

4. Friedman, M. (1970). The Social Responsibility of Business Is to Increase Its Profits. The New York Times Magazine.

5. Morrison, M. A. (2004). Rush to Judgment: The Lynching of Arthur Andersen & Co. Critical Perspectives on Accounting, 15, 335-375.

6. Morrison, M. A. (2005). Reply to Lynn Turner. Critical Perspectives on Accounting, 26, 65-69.

7. O’Connell, B. T. (2004). Crimes and Misdemeanours: The Death of Arthur Andersen. Critical Perspectives on Accounting, 15, 333-334.

8. Turner, L. E. (2005). Reply to Mary Morrison. Critical Perspectives on Accounting, 16, 63-64.

9. O’Connell, B. T. & Nagy, J. (2005). Commentary on Lynn E. Turner’s Response to Mary Morrison’s Andersen as Road-Kill. Critical Perspectives on Accounting, 16, 71-72.

10. Dugan, I. J., Berman, D. K., & Barrionuevo, A. (2002, April 15). On Camera, People at Andersen, Enron Tell How Close They Were. The Wall Street Journal, p. A1.

11. Watkins, S. (2003). Former Enron Vice President Sherron Watkins on the Enron Collapse. Academy of Management Executive, 17(4), 119-125.

12. Pulliam, S. & Solomon, D. (2002, October 30). How Three Unlikely Sleuths Discovered Fraud at WorldCom. The Wall Street Journal, p. A1.

13. Pulliam, S. & Latour, A. (2005, January 12). Trial of WorldCom’s Ebbers Will Focus on Uneasy Partnership. The Wall Street Journal, p. A1.

14. Langley, M. (2004, December 10). Consultant Leads Secret Double Life as Internet Sleuth. The Wall Street Journal, p. A1.

15. Scannell, K. (2004, August 18). How Lawyers Helped Drive the Boom in Tax Shelters. The Wall Street Journal, p. A1.

16. Jennings, M. M. (2004.) Incorporating Ethics and Professionalism into Accounting Education and Research: A Discussion of the Voids and Advocacy for Training in Seminal Works in Business Ethics. Issues in Accounting Education 19(1), 7-26.

APPENDIX A: Course Reading Materials (cont’d.)

Earnings Management17. Detecting Earnings Management by Giroux (2004) 11 chapters with 1

appendix18. Nelson, M. W., Eliott, J. A., & Tarpley, R. L. (2003). How are Earnings

Managed? Examples from Auditors. Accounting Horizons (Supplement), 17-35.

19. Botosan, C. A., Koonce, L, Ryan, S. G., Stone, M. S., & Whalen, J. M. (2005). Accounting for Liabilities: Conceptual Issues, Standard Setting, and Evidence from Academic Research. Accounting Horizons 19(3), 159-186.

Business Strategy (text eliminated in spring 2006)Current articles from The Wall Street Journal selected by the instructor

21

APPENDIX B: Sample Take-Home Exam Question and Associated Grading Rubric

Question #1: (65 points) Corporate Social Responsibility Reports Shell has been publishing a corporate social responsibility report for eight years. On the other hand, General Electric published its first citizenship report during 2005. Please review The Shell Report 2004 at http://www.shell.com/home/Framework?siteId=shellreport2004-en and General Electric’s 2005 Citizenship Report at http://www.ge.com/en/citizenship/.Do not print out these reports. Become familiar with the reports but you do not need to read every word. The terms being used globally are sustainability reporting and sustainability assurance. When answering Parts A, B and C below, use the outline of a good argument located on WebCT.

Part A: (20 points) Prepare an evaluation of the argument presented in The Shell Report 2004 using the format on WebCT. First, what is the thesis statement for the report? Cite and support the TWO BEST SPECIFIC and DIFFERENT examples and the TWO WORST SPECIFIC and DIFFERENT examples (FOUR TOTAL) based on the Duska text and other class readings. Be sure to cite the text or readings when you are integrating themes with examples.

Part B: (20 points) Prepare an evaluation of the argument presented in General Electric’s Citizenship Report 2005 using the format on WebCT. First, what is the thesis statement for the report? Cite and support the TWO BEST SPECIFIC and DIFFERENT examples and the TWO WORST SPECIFIC and DIFFERENT examples (FOUR TOTAL) based on the Duska text and other class readings. Be sure to cite the text or readings when you are integrating themes with examples.

Part C: (10 points) Which report do you think is most successful in communicating its purpose to the public? Provide TWO SPECIFIC and DIFFERENT conclusions with support from the report and integration from our text/class readings.

Part D: (15 points) Accountants use GAAP and GAAS to prepare and audit financial reports. Look carefully at the standards that were used and the level of assurance that was provided for the Shell Report 2004 and the GE 2005 Citizenship Report. Compare and contrast the quality of the process used to create these reports. Identify THREE SPECIFIC and DIFFERENT concerns and/or praises that you have about the information quality included in these reports. Be sure to integrate information from the Duska text to support your concerns/praises. Do not discuss the same topics you mentioned in your answers in parts A, B and C above.

22

APPENDIX B (cont’d.): Sample Take-Home Exam Question and Associated Grading Rubric

Honor Code Form Signed? __________

Question #1A: ShellShell Best #1 Identified (2 points) __________Shell Best #1 Text Integration (3 points) __________Shell Best #2 Identified (2 points) __________Shell Best #2 Text Integration (3 points) __________Shell Worst #1 Identified (2 points) __________Shell Worst #1 Text Integration (3 points) __________Shell Worst #2 Identified (2 points) __________Shell Worst #2 Text Integration (3 points) __________

Subtotal (20 points) __________

Question #1B: General ElectricGeneral Electric Best #1 Identified (2 points) __________General Electric Best #1 Text Integration (3 points) __________General Electric Best #2 Identified (2 point) __________General Electric Best #2 Text Integration (3 points) __________General Electric Worst #1 Identified (2 points) __________General Electric Worst #1 Text Integration (3 points) __________General Electric Worst #2 Identified (2 points) __________General Electric Worst #2 Text Integration (3 points) __________

Subtotal (20 points) __________

Question #1C: Comparison of ReportsConclusion #1 Identified/Supported by Resources (5 points) __________Conclusion #2 Identified/Supported by Resources (5 points) __________

Subtotal (10 points) Question #1D: Assurance/Attestation Concerns/PraisesChallenge #1 Identified/Supported by Resources (5 points) __________Challenge #2 Identified/Supported by Resources (5 points) __________Challenge #3 Identified/Supported by Resources (5 points) __________

Subtotal (15 points)

Organization, flow, grammar, punctuation, word usage,capitalization, and spelling (up to 5 points subtracted) __________

Total (65 points)=========

23

APPENDIX C: Team Case Assignment (Oral Presentation and Written Report)

I. Introductiona. Brief history of the firmb. Company profilec. Strategic mission and intent

II. Situation Analysisa. Industry analysisb. Competitor analysisc. Internal analysis

III. Performance Measures and Financial Dataa. Ratiosb. Valuationc. Key sources of financingd. Evidence of earnings managemente. Restructuring history and/or opportunitiesf. Social responsibility report

IV. Corporate-level Strategya. Single-business/dominant-business strategyb. Diversification strategyc. Possible acquisitionsd. Key alliancese. International strategy

V. Corporate Governancea. Board of directors analysisb. Ownership concentrationc. Organizational structured. Audit firm historye. Code of ethicsf. Risk managementg. Executive compensationh. CEO background

VI. Conclusiona. What’s working and what’s not working with the company’s strategy?b. At what stage is the strategy implementation?c. Product life cycle for key products/services?d. Your recommendations:

i. Acquisitions? Divestitures?ii. Is the right leadership in place?

iii. How innovative is the company? Is the company’s past success sustainable?

iv. How would you rate the culture of the company?v. Would you invest in the company?

24

REFERENCES

Accounting Education Change Commission (AECC). (1996). Position and Issues

Statements of the Accounting Education Change Commission. Sarasota, FL:

American Accounting Association.

Afuah, A. (2004). Business Models: A Strategic Management Approach. New York, NY:

McGraw-Hill Irwin.

American Institute of Certified Public Accountants’ (AICPA) Core Competency

Framework. (n.d.). Retrieved July 3, 2006, from

http://ceae.aicpa.org/Resources/Education+and+Curriculum+Development/

Core+Competency+Framework+and+Educational+Competency+Assessment+

Web+Site/

Arya, A., Fellingham, J. C., & Schroeder, D. A. (2003). An Academic Curriculum

Proposal. Issues in Accounting Education 18(1), 29-35.

Asmus, P. (2005). 2005 100 Best Corporate Citizens. Business Ethics 19(1), 20-27.

Association to Advance Collegiate Schools of Business (AACSB) Accreditation

Standards. (January 1, 2006). Retrieved July 3, 2006, from

http://www.aacsb.edu/accreditation/business/STANDARDS.pdf.

Beyond Grey Pinstripes: Preparing MBAs for Social and Environmental Stewardship

Coursework (n.d.). Retrieved July 3, 2006, from

http://beyondgreypinstripes.org/search/search_coursework.cfm

Botosan, C. A., Koonce, L, Ryan, S. G., Stone, M. S., & Whalen, J. M. (2005).

Accounting for Liabilities: Conceptual Issues, Standard Setting, and Evidence

from Academic Research. Accounting Horizons 19(3), 159-186.

Brooks, L. J. (2004). Business and Professional Ethics for Directors, Executives and

Accountants. Mason, OH: South-Western College Publishing.

Certified Public Accountant (CPA) Exam (n.d.). Retrieved July 3, 2006, from

http://www.cpa-exam.org/cpa/how_prepare.html.

Cioffi, F. L. (2005). Effective Argumentation in a Culture of Discord. The Chronicle of

Higher Education 51 (37), B6.

Copeland, Jr., J. E. (2005). Ethics as an Imperative. Accounting Horizons 19(1), 35-43.

Coulter, J. M., & Vogel, T. J. (2004). Pets.com, Inc.: Assessing Financial Performance

and Risks in the e-Commerce Industry. Issues in Accounting Education 19(4),

567-582.

Dugan, I. J., Berman, D. K., & Barrionuevo, A. (2002, April 15). On Camera, People at

Andersen, Enron Tell How Close They Were. The Wall Street Journal, p. A1.

Duska, R. F., & Duska, B. S. (2003). Accounting Ethics (1st ed.). Malden, MA:

Blackwell Publishing.

Friedman, M. (1970). The Social Responsibility of Business Is to Increase Its Profits. The

New York Times Magazine.

Gardner, J., Van der Veer, G, & Associates. (1998). The Senior Year Experience:

Facilitating Integration, Reflection, Closure and Transition. San Francisco, CA:

Jossey-Bass Publishers.

Garten, J. E. (2005, September 5). B-Schools: Only a C+ in Ethics. Business Week, 110.

General Electric’s 2006 Citizenship Report. (2006). Retrieved July 3, 2006, from

http:// www.ge.com/en/citizenship .

26

Giroux, G. (2004). Detecting Earnings Management (1st ed.). Hoboken, NJ: John Wiley

& Sons, Inc.

Grover, S. L. (2005). The Truth, the Whole Truth, and Nothing but the Truth: The Causes

and Management of Workplace Lying. Academy of Management Executive 19(2),

148-157.

Harrison, J. S., & St. John, C. H. (2004). Foundations in Strategic Management (3rd ed.).

Mason, OH: Thomson South-Western.

Jennings, M. M. (2004.) Incorporating Ethics and Professionalism into Accounting

Education and Research: A Discussion of the Voids and Advocacy for Training in

Seminal Works in Business Ethics. Issues in Accounting Education 19(1), 7-26.

Jervis, K. J., & Hartley, C. A. (2005). Learning to Design and Teach an Accounting

Capstone. Issues in Accounting Education 20(4), 311-39.

Langley, M. (2004, December 10). Consultant Leads Secret Double Life as Internet

Sleuth. The Wall Street Journal, p. A1.

Morrison, M. A. (2004). Rush to Judgment: The Lynching of Arthur Andersen & Co.

Critical Perspectives on Accounting, 15, 335-375.

Morrison, M. A. (2005). Reply to Lynn Turner. Critical Perspectives on Accounting, 26,

65-69.

Nelson, M. W., Eliott, J. A., & Tarpley, R. L. (2003). How are Earnings Managed?

Examples from Auditors. Accounting Horizons (Supplement), 17-35.

O’Connell, B. T. (2004). Crimes and Misdemeanours: The Death of Arthur Andersen.

Critical Perspectives on Accounting, 15, 333-334.

27

O’Connell, B. T. & Nagy, J. (2005). Commentary on Lynn E. Turner’s Response to Mary

Morrison’s Andersen as Road-Kill. Critical Perspectives on Accounting, 16,

71-72.

Piper, T. R., Gentile, M. C. & Parks, S. D. (1993). Can Ethics be Taught? Perspectives,

Challenges, and Approaches at Harvard Business School. Boston, MA: Harvard

Business School Press.

PricewaterhouseCoopers. (2003). Educating for the Public Trust: The

PricewaterhouseCoopers Position on Accounting Education. New York, NY:

PricewaterhouseCoopers.

Pulliam, S. & Solomon, D. (2002, October 30). How Three Unlikely Sleuths Discovered

Fraud at WorldCom. The Wall Street Journal, p. A1.

Pulliam, S. & Latour, A. (2005, January 12). Trial of WorldCom’s Ebbers Will Focus

on Uneasy Partnership. The Wall Street Journal, p. A1.

Richardson, R. C. (2004). Thinking Outside of the Box (of wine, that is): An Exercise in

Independence. Issues in Accounting Education, 19(3), 363-367.

Scannell, K. (2004, August 18). How Lawyers Helped Drive the Boom in Tax Shelters.

The Wall Street Journal, p. A1.

Shell Sustainability Report 2005. (2005). Retrieved July 3, 2006 from,

http://www.shell.com/static/envandsocen/downloads/

about_this_site/shell_sustainability_report_2005.pdf

Thomas, C. W. (2004). An Inventory of Support Materials for Teaching Ethics in the

Post-Enron Era. Issues in Accounting Education 19(1), 27-52.

28

Titard, P. L., Braun, R. L, & Meyer, M. J. (2004). Accounting Education: Response to

Corporate Scandals. Journal of Accountancy, 199(11), 59-65.

Turner, L. E. (2005). Reply to Mary Morrison. Critical Perspectives on Accounting, 16,

63-64.

University of Colorado at Boulder Honor Code. (2001). Retrieved July 3, 2006, from

http:// www.colorado.edu/academics/honorcode/ Home.html.

Verrault, D. A., Yang, S., & Angel. J. (2004). Sprint Corporation: Ethical Decisions and

Tax Avoidance Strategies. Issues in Accounting Education, 19(1), 119-143.

Watkins, S. (2003). Former Enron Vice President Sherron Watkins on the Enron

Collapse. Academy of Management Executive, 17(4), 119-125.

29