The development of financial reporting illustrations has been made easier through the use of internet resources and the Securities and Exchange Commission's EDGAR corporate information database. The effective use of financial reporting illustrations in accounting classes at the University of Massachusetts Lowell has helped to improve accounting education, students' satisfaction, and faculty satisfaction.
If the applications are specific enough, evidence of effectiveness is simply a matter of comparing students' responses to the correct answers. Based on data gathered over a two-year period with a total of approximately 200 students, as students get more experience with accounting, their answers to discussion questions improve over time. Student testimonials are often positive toward these types of practical applications. If the major purposes of the discussion questions are to present real-world illustrations and stimulate students' interest in accounting materials, grades do not have to be assigned to students' responses. The expected downside to this approach, however, is that students' responses will probably be reduced as the course progresses and students get busier.
learning effectiveness: Online resources are an important asset to teaching accounting online. They allow faculty to link theory to practical application of course concepts. Presenting meaningful illustrations of the financial reporting of actual companies enables students to see how topics covered in accounting courses can be significant in the reporting of information to creditors, owners, and others. The development of such financial reporting illustrations has been made much easier through the use of online resources. The Securities and Exchange Commission (SEC) maintains a corporate information database known as EDGAR (Electronic Data Gathering, Analysis, and Retrieval system). The database contains annual and other periodic reports of companies registered to issue securities in the United States. Virtually all companies with more than $10 million of assets and more than 500 owners have been required to file such reports annually since the program was phased in over a three-year period ended May 6, 1996. The widespread use of the Internet and the development of EDGAR have resulted in easy access to actual financial data of corporations. Such access allows accounting educators opportunities to present students with meaningful illustrations and practical applications of financial reporting using actual SEC data. Presenting financial illustrations to students through asynchronous discussion boards allows for increased interaction and collaboration among students and faculty. Pedagogically, this type of activity can also appeal to students with different learning styles. It allows for "hands on" learners to conduct calculations and apply the theory to practical application of concepts. It also allows for the faculty member to guide and facilitate the collaboration through individualized and group feedback. The following is an example of part of an illustration presented early in an undergraduate introductory financial accounting course. This illustration is designed to help students understand the important role management plays in companies, which is also linked to the course learning objectives. Step 1: Deere & Company's financial statements are obtained from the EDGAR database. Through the use of Microsoft Word, the statements are modified slightly. Specifically, the statement of stockholders' equity is simplified into a statement of retained earnings in order to reduce distractions for students. Step 2: A link to the modified statements is established on the course website. Step 3: Questions about Deere & Company's financial statements are entered into a discussion board. For example, students are asked to determine the dollar amount of resources management brought into the company by dealing with customers, investments, and similar items. The correct answer to the questions is the company's total revenues for the period. Step 4: Students are emailed a list of the questions entered on the discussion board and instructed to respond to the questions. Step 5: Students' responses are reviewed and feedback is emailed to students. Note: If discussion board capabilities do not exist, the above five steps can be modified for use through email.
Annual subscription fees for users of EDGAR (EDGAR online pro) are approximately $60 or $15 per quarter. This fee allows access and downloading of files in html, RTF (Word), and Excel. If the ability to manipulate information through the use of RTF files or Excel is not necessary, data can be obtained free through freeedgar. Since links to modified financial statements are established on the course web site, students can access the modified statements without subscribing to EDGAR. If students desire additional information, they can either subscribe to EDGAR or use freeedgar.