THE EFFECT OF EXPERIENTIAL ACCOUNTING WORK EXPERIENCE ON STUDENT PERFORMANCE IN INTERMEDIATE ACCOUNTING COURSES Developments In Business Simulation & Experiential Exercises, Volume 17, 1990 105 THE EFFECT OF EXPERIENTIAL ACCOUNTING WORK EXPERIENCE ON STUDENT PERFORMANCE IN INTERMEDIATE ACCOUNTING COURSES Doug Laufer, Weber State College Larry Watkins, Northern Arizona University ABSTRACT The ability to develop criteria to assess a student's likelihood of success in the accounting curriculum is important Most accounting departments are faced with increasing enrollments and a shortage of terminally qualified faculty. In an effort to address the ensuing resource dilemma accounting programs have recognized the need to establish selective admission and retention policies. Experiential learning has long been recognized as an effective approach to aid in the transmission and application of knowledge. Experiential learning methods are defined to include work experience, internships, and cooperative programs. If the experiential learning methodology enhances the performance of students, then accounting related work experience, internships, and Cooperative programs will help contribute to the success of the students. Accordingly, the effect of a student’s work experience on the probability of success in the study of accounting is an important issue. The purpose of this study is to evaluate work experience as a quantitative predictor of the likelihood of a student’s success in Intermediate Accounting. To the extent the study results yield statistically valid quantitative evidence, which prove an ability to discriminate between potentially successful and unsuccessful students, a more efficient utilization of resources allocated to accounting curriculum can occur. INTRODUCTION Accounting education research is a growing body of literature, which is becoming increasingly important. Within the paradigm a wide range of topics have been addressed. One subset within this arena is prediction research. Several prediction research studies have focused on student achievement. These studies have endeavored to shed light on relevant and reliable indicators, which provide ex ante signals of an individual’s likelihood of success or failure. Success or failure has typically been measured in terms of an exam grade, course grade, or as a grade point average. A goal in these studies has been the analysis of success criteria for undergraduate accounting students. The ability to develop criteria to assess a student’s likelihood of success in the accounting curriculum is important. Most accounting departments are faced with increasing enrollments and a shortage of terminally qualified faculty. In an effort to address the ensuing resource dilemma accounting programs have recognized the need to establish selective admission and retention policies. In the final report of the Board on Standards for Programs and Schools of Professional Accounting the first standard of admission and retention provided: Students selected for admission to a professional program shall show a high probability of success in the study of accounting. [AICPA, 1977, p. 6] Several studies have endeavored to develope models to identify criteria, which effectively predict whether or not a student will succeed in undergraduate accounting courses and programs. Variables investigated as predictors have been both academic and non-academic. Results have indicated that academic performance can be predicted with some effectiveness. These studies will be discussed in the next section of this paper. Experiential learning has long been recognized as an effective approach to aid in the transmission and application of knowledge. A study conducted by Lau and Jelinek [1984] found it to be superior to content-learning approaches. The general experiential learning model has been illustrated by KoIb, Rubin and McIntyre [1971]. The model describes how an individual learns from experience. Experiential learning methods are defined to include work experience. internships, and cooperative programs. If the experiential learning methodology enhances the performance of students, then accounting related work experience, internships. and cooperative programs will help contribute to the success of the students. Accordingly, the effect of a students work experience on the probability of success in the study of accounting is an important issue. Yet, there is a lack of research, which has explicitly examined the effect of a students accounting work experience on classroom performance. The purpose of this study is to evaluate work experience as a quantitative predictor of the likelihood of a student’s success in Intermediate Accounting. To the extent the study results yield statistically valid quantitative evidence, which prove an ability to discriminate between potentially successful and unsuccessful students, a more efficient utilization of resources allocated to accounting curriculum can occur. The results of the study may provide information, which indicates the need to emphasize, perhaps require some form of experiential learning as a vehicle to enhance the performance of accounting students. Conversely, results from this study may suggest work experience is not a significant factor in enhancing a students performance. This would call question to time and money resources already being utilized for internships and cooperative programs. PRIOR STUDIES Previous studies have examined the strength of various factors as predictors of success in a particular accounting course or accounting curriculum. Eskew and Faley [1988] built upon prior studies to model some determinants of student performance in financial accounting courses. Factors utilized in the model Developments In Business Simulation & Experiential Exercises, Volume 17, 1990 106 included: SAT score, high school grades, college grades, college credit hours in business and general education, and high school accounting courses. The effect of previous accounting education on financial accounting course performance had previously been studied [Mitchell, 1988: Schroeder, 1985; Bergin, 1983; Baldwin and Howe, 1982]. Research findings were mixed in these studies. Multiple regression results in the Eskew and Faley study revealed that all model variables other than previous college credit hours contributed significantly to an explanation of student performance. Student performance was measured by total points earned in the course. SAT score made the largest marginal explanatory contribution. This is somewhat inconsistent with other studies as grade point average is typically the strongest explanatory variable. Several studies have focused on developing models to identify admission criteria, which effectively predict whether or not a student will succeed in undergraduate accounting programs. These studies used varying forms of discriminate analysis and a variety of explanatory variables to classify the performance of accounting students [Ingram and Peterson, 1987; Clark and Sweeney, 1985: Dockweiler and Willis 1984; Eckel and Johnson, 1983; Delaney, et. al, 1979]. These variables included grade-point average, grades in specific lower division courses, ACT/SAT scores, and scores on similar standardized tests. Several of these factors appeared to be associated with the success or failure of students. In general, the most important of these was a measure of prior grade-point average. Similar studies have been conducted in non-accounting educational research. Prediction of college success has been modeled using academic variables such as high school grade-point average, grades in prior college courses, and entrance exam scores [Neely, 1977; Schroeder and Sledge, 1966]. Non-academic variables investigated have included characteristics such as sex, attendance at public or private high schools and other forms of biographic data [Khan, 1973]. Grade-point average generally has been found to be the most important predictor. The goal of accounting education research is to address questions of particular interest to accountants and fundamental questions of interest to all involved in higher education, Most accounting education research is based on inductive theories which start with empirical observations. These provide the basis for the descriptive studies. The results of the descriptive studies provide a framework on which to construct a general predictive model. The predictive model can then be utilized in a variety of ways including to forecast future events or validate descriptive models STATEMENT OF PURPOSE The present study seeks to extend the scope of previous descriptive studies in accounting education research. As discussed above, previous research has endeavored to explain differences in students’ performance in college accounting courses and curriculum. This research project similarly studies the empirical relationship between classroom performance and several independent variables. The contribution to the body of accounting education research by this study is threefold. First, to the extent that this study replicates prior research in the analysis of student performance, it enriches the available evidence on the road to research conclusions. This is important in descriptive and explanatory studies. Typically, normative causal chains do not exist. Additionally, absent a laboratory setting, it is not possible to have full control over extraneous non-experimental factors. Therefore, results may provide evidence on pseudo rather than real causality. In these situations it is important that research be reproduced by other observers, under similar or slightly different settings, using different subjects [Abdelkhalik and Ajinkya, 1979]. The design of this study allows replication of prior research. As with previous studies, the relationship of student performance, measured by total points earned, with grade-point average and entrance examination scores will be analyzed. The extension of and improvement upon prior studies are detailed in the next two paragraphs. Second, the range of explanatory variables that are examined as differentiating factors of student performance has been broadened. Data gathered allows the variables of age, accounting work experience, and student job demands while enrolled in an accounting course to be included in the analysis. The accounting work experience issue was discussed in the first section of this proposal. It is possibly the most important of the new variables from an efficient use of resource standpoint. The final contribution made by this research project is possibly of much greater significance. It is a result of the research design. To conduct this study, information was gathered on students at Northern Arizona University and Weber State College. Therefore, data collected is multi- institutional, which means cross-sectional analysis will be possible. A recently published review of accounting education research noted that not a single accounting education research article employed use of multi- institutional data [Herring, et. al., 1989]. The authors stated that such data is necessary for a thorough testing of theories related to virtually all aspects of the educational process [Ibid., pg. 54]. The multi-institutional nature of this study greatly enhances external validity. This is particularly true in light of the diverse nature of the two schools. Northern Arizona University has predominately traditional students with a majority of the student body living in campus housing. Weber State is a commuter campus. The student body is older and composed of more nontraditional students. Inconsistent results between the schools in this study could undermine the ability to generalize research findings in single institution studies. METHODOLOGY Data Collection The experimental subjects were students enrolled in a first at Northern Arizona University and Weber State College. All intermediate accounting course during the 1988-89 academic year class sections used the same intermediate accounting textbook [Chasteen, Flaherty and O'Connor, 1987]. Student grades, expressed in percentage and letter grade terms and total points earned, were obtained from the instructors at the end of each term. Profile information on each student was collected by means of a questionnaire. Students were asked to provide information about present work demands. They also were asked the extent, timing, and duration of accounting work experience [see Appendix) Other demographic information including grade-point Developments In Business Simulation & Experiential Exercises, Volume 17, 1990 107 average and entrance exam scores were gathered from the respective institutions. The data set was screened in an effort to eliminate identifiable sources of variation not believed to be associated with the variables of interest. Accordingly, students repeating the intermediate accounting course were dropped from the study. This is because of the a priori expectation that inferior students tend to repeat courses. Including these students in the study might bias the results. Additionally, any student who dropped the course or submitted incomplete questionnaires were eliminated from the study. There are 115 students who are considered valid subjects. They will constitute the data set to be used for statistical testing. Hypotheses Prior studies have examined the strength of various factors as predictors of success in a particular accounting course or accounting curriculum. This study ascertains to measure the relationship between several independent variables, and performance in intermediate accounting as measured by total points earned. Data gathered for this study allows analysis of the relationship between performance and previously tested factors including grade-point average and entrance exam scores, Design of this study also facilitates examination of the relationship between classroom performance and age, accounting work experience, and student job demands while enrolled in the course. This leads to the following testable hypotheses (presented in the null form): Ho1: Students with prior accounting related work experience will not earn a significantly different amount of total points in intermediate accounting than those students without such experience, Ho2: Students with job demands while enrolled in intermediate accounting will not earn a significantly different amount of total points than students not working. Ho3: There is no relationship between a students age and total points earned in the intermediate accounting course. Ho4: There is no relationship between a student’s cumulative CPA and total points earned in intermediate accounting. Ho5: There is no relationship between a student’s entrance exam score and total points earned in intermediate accounting. The analysis can be further refined. Information is available with regard to type and duration of accounting experience. Job demands can be blocked into part-time and full-time work. Grade-point average can be determined for general education, advanced standing, or principles of accounting courses. Statistical Tests and Model The statistical analysis is being conducted presently (August, 1989). It should be completed in September and will be provided to the Proceeding Editor and paper discussant if this paper is accepted for presentation. The study utilizes multiple regression analysis. The hypothesis will be tested within the context of the model specified below: PRE = B0 + B2GPAi + B2ACT1 + B3Agei + B4AWEi + B5SJDi where PRE = a measure of performance in the course equal to total points earned: CPA = cumulative grade point average; ACT = a measure of academic aptitude based on entrance exam score; Age = age of student; AWE = accounting related work experience; SJD = student job demands while enrolled in the accounting course. The major weakness of this method is the possible multi- colinearity of the explanatory variables. It will be necessary to attempt to evaluate the effects of intercorrelation on the multiple regression results, Additionally, the validity of other assumptions underlying the regression model will be performed. SUMMARY This study is designed primarily to evaluate the effect of accounting work experience on performance in intermediate accounting courses. The study also will offer an empirical analysis of the relationship between classroom performance and several other variables in addition to work experience. Upon completion of the statistical analysis the summary will be expanded to discuss the results and state a conclusion. Developments In Business Simulation & Experiential Exercises, Volume 17, 1990 108 REFERENCES Abdel-khalik. A. and B. Ajinkya, Empirical Research in Accounting: A Methodological Viewpoint, (Sarasota, Florida: American Accounting Association, 1979). American Institute of Certified Public Accountants, Standards for Professional Accounting Programs and Schools, AICPA Board on Standards for Programs and Schools of Professional Accounting, 1977. Baldwin, B. and K. Howe, “Secondary-Level Study of Accounting and Subsequent Performance in the First College Course,” The Accounting Review, (July 1982), pp. 619-626. Bergin. J “The Effect of Previous Accounting Study on Student Performance in the First College-Level Financial Accounting Course.” Issues in Accounting Education, (1983), pp. 19-28. Chasteen, L. R. Flaherty, and M. O’Connor, Intermediate Accounting, 2nd Ed. , (New York: Random House, 1987). Clark, R. , and R. Sweeney, “Admission to Accounting Programs: Using a Discriminate Model as a Classification Procedure,’ The Accounting Review, (July 1985), pp. 508-518. Delaney. P., D. Keyes, C. Norton, and J. Simon. ‘An Admission Test for Intermediate Accounting, The Accounting Review, (January, 1979), pp. 155-162. Dockweiler, R. and C. Willis, “On the Use of Entry Requirements for Undergraduate Accounting Programs,” The Accounting Review, (July, 1984), pp. 496-504. Eckel, N., and U. Johnson, A Model for Screening and Classifying Potential Accounting Majors, Journal of Accounting Education, (Fall, 1983), pp. 57-65. Eskew, R., and R. Faley, “Some Determinants of Student Performance in the First College-Level Financial Accounting Course,” The Accounting Review, (January, 1988). pp. 137-147. Herring. H., J. Schemer and J. Williams, “The Development of Education Research in Accounting,” Issues in Accounting Education, (Spring, 1989), pp. 48-57. Ingram. R., and R. Petersen, “An Evaluation of AICPA Tests for Predicting the Performance of Accounting Majors,” The Accounting Review, (January, 1987) pp. 215-223. Khan, S.,” Sex differences in predictability of academic achievement,” Measurement and Evaluation in Guidance, (Summer, 1973), pp. 88-92. KoIb, D., I. Rubin, and J McIntyre, Organizational Psychology: An Experiential Approach, (Englewood Cliffs, New Jersey: Prentice-Hall, 1971). Lau, J., and M. Jelinek, Behavior in Organizations: An Experiential Approach, 3rd Ed., (Homewood, Illinois: Irwin, 1984). Mitchell F.,“High School Accounting and Student Performance in the First-Level University Accounting Course: A U.K. Study,” Journal of Accounting Education, (Fall, 1988), pp. 279-291. Neely, R.,“ Discriminate Analysis for Prediction of College Graduation’, Educational and Psychological Measurement, (Winter, 1977), pp. 965-970. Schroeder, N Previous Accounting Education and College- Level Accounting Exam Performance,” Issues in Accounting Education, (Spring, 1986), pp. 37-47. Schroeder, W., and G. Sledge, “Factors related to collegiate academic success,’ Journal of College Student Personnel, (Summer, 1966), pp. 97-104. Table of Contents Volume 17, 1990 The Impact of Decision Support Systems on the Effectiveness of Small Group Decisions - Revisited The Relationship Between Financial Performance and Other Measures of Learning on a Simulation Exercise Use and Effectiveness of an Analogy-Based Expert System Suggestions for Computerized Business Authors Dealing with Power: An Experiential Exercise Using Movie and Personal Diary Analysis Techniques A Model for Developing Student Skills and Assessing Outcomes Through Outdoor Training Computer-Aided Exercises Versus Workbook Exercises as Learning Facilitator in the Principles of Marketing Course An Exposition of Guilford's Si Model as a Means of Diagnosing and Generating Pedagogical Strategies in Collegiate Business Education Formal Planning and Simulation Team Performance: A Cross Sectional Approach Cases: Real Organizations in Real Time in the Classroom An Empirical Investigation of the Internal Validity of Marketing Simulation Game An Empirical Evaluation of the Pedagogical Value of Playing a Simulation Game in a Principles of Marketing Course Factors Affecting Effective Teaching of Strategic Planning: Some Preliminary Evidence An Experiential Exercise for Learning About the Relationship Between Organizational Form & the Project Management Process Accounting Communication Skills can be Taught in the Auditing Course Modeling Cost Functions in Computerized Business Simulation: An Application of Duality Theory and Sheppard's Lemma A Life Cycle Analysis of Decision Making for a Strategic Management Team What's the Problem? A Dynamic Model for Teaching Problem Solving Skills Experientially International Currency Fluctuations: Money$im, A Simulation Superstores: A Specialized Retailing Simulation Within a Specialized Marketing Curriculum Factors Affecting Student Perceptions of Learning in a Business Policy Game VC + EL = VL The Name Game: An Experiential Exercise in Intergroup Relations The Effects of Experiential Accounting Work Experience on Student Performance in Intermediate Accounting Courses The Results of Using the Experiential Activity Group Performance Evaluation in a Business Policy Setting Using a Legal Database to Describe the Legal Environment of Marketing (and Business) Matching Environmental Uncertainty and Organizational Configuration An Instructional Computer Simulation of Tampering in QC Executive Evaluation of Student Learning in the Looking Glass Simulation Group Personality Composition and Total Enterprise Simulation Performance An Expert System for Selecting Analytical Techniques for Analyzing Marketing Research Data Effects of Cognitive Styles on Responses in an In-Basket Simulation A Psychometric Analysis of Kolb's Revised Learning Style-Inventory Selecting and Developing Experiential Exercises Using Movies Application of a Real-World Strategic Management Model in the Classroom Demand Equations which Include Product Attributes Consumption as the Objective in Computer-Scored Total Enterprise Simulations The Effects of Decision Format and Evaluation on Simulation Performance, Decision Time, and Team Cohesion The Effects of Computer Related Assignments on Student Performance in Business Administration The Money Game: A Dynamic Simulation Including Random Shocks for Money and Banking Courses Methods for Evaluating Performance on Business Simulations: A Survey The Effects of Synergogy on the Policy Course: Significant Improvements in Student Learning and Teacher Evaluation Conditions and Outcomes of Trust in a Two-Person Bargaining Exercise Bankgame Enhancing Computer Business Simulation with the Use of VGA Graphics An Experiential Approach to Entrepreneurship An Advanced Simulation Method (ASM) for Multiple Objective Problems The Influence of Experiential learning Techniques on Student Recognition of Non-Primary Learning Styles Negotiating Mergers and Acquisitions: A Cocktail Napkin Approach Identification of Unintended Effects in Experiential Laboratory Exercises An Experimental Comparison of Paper and Pencil and Computer Aided Decision Support Tools Porting a Simulation from the IBM World to the Macintosh World A Transaction Cost Analysis of Experiential Learning The Development of Experiential Exercises for Courses in Entrepreneurship and Small Business Management The Assessment Center as and Experiential Classroom Exercise Pricing Strategy Algorithms for Playing Business Simulations Organizational Structures for International Operations: An Experiential Activity Simulation Emphasis in the Business School Capstone Course An Integrated Approach to Computerizing the Business Curriculum Cross-Cultural Business Negotiations Exercise Organizational Socialization and Gender Differences in Students at Work Understanding Student Work Experience: A Content-Analytic Approach Introducing Executive MBA Programs with Management Games An Analysis of Improvement in Business Decision Outcome with Sequential Use of Two Simulation Games Teaching Business Policy Utilizing Mass Lecture and Individual Case Labs Potholes Along the Road to Evaluating Learning Outcomes: The Case of Outdoor Management Training Experiential Learning for Interior Design Students: Using CADD, Lotus 1-2-3, and Wordperfect Cognitive Learning Using a Computer-Based, Qualitative Interactive Business Simulation Sex Discrimination: Does the Woman get the Job or Does the Best Man Win? A Search for Visual Aids to Support Experiential Learning Through the 1990's An Experimental Analysis fo the Effectiveness of Student Role-Playing in Sales Training How to Have Students Learn from their Term Projects Self-Evaluation Exercise (SEE): An Assessment of Class Contribution A Study of the Influence of Team Formation on Attitudes and Performance in Management Games A Hardware Based CIM Simulation Laboratory Model Test Substance Abuse in Organizations Micro Computer Training Models Teaching Forecasting, Cash Budgeting and Inventory Model Building Using SBTools A Comparison of the Effects of Experiential Learning Activities and Traditional Lecture Classes An Adjunct Writing Instruction Assistant, The Computer; With an Illustration Classroom Software for ABC Analysis Utilizing Information Processing Technology to Enhance the Business Policy Simulation Experience Progressive Cases Realistic Job Previews Vs. Traditional Job Previews: Experiencing the Differences and Understanding the Consequences Investment Analysis Using the Pragmatic Multiplier Approach A Computer Simulation Interface for Competitive and Firm Analysis Self-Assessment of Ethical Decision Making Predispositions Preparing Managers for Overseas Assignments An Inquiry into Japanese Marketing: Workshop on Teaching Japanese Marketing The Performance Appraisal Feedback Interview: A Role Play for Human Resources Management Teaching Counselor Selling techniques Using Experiential Techniques to Teach International Topics International Management Simulation Gaming: Current Status and Future Developments A Realism Comparison of Simulation Technologies/Methodologies A Time-Efficient Game to Illustrate Concepts Taught in Management Courses and Management Development Programs Teaching the Management of Technology The Concept of Face and the Applicability of Experiential Exercises in an Oriental Culture's