Advances in Accounting Education : Teaching and Curriculum Innovations 9781784415877, 9781784415884

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ADVANCES IN ACCOUNTING EDUCATION: TEACHING AND CURRICULUM INNOVATIONS

ADVANCES IN ACCOUNTING EDUCATION: TEACHING AND CURRICULUM INNOVATIONS Series Editor: Timothy J. Rupert Recent Volumes: Volume 1:

Edited by Bill N. Schwartz and David E. Stout

Volumes 2
7:

Edited by Bill N. Schwartz and J. Edward Ketz

Volumes 8
10:

Edited by Bill N. Schwartz and Anthony H. Catanach Jr.

Volumes 11
12:

Edited by Anthony N. Catanach Jr. and Dorothy Feldmann

Volumes 13
15:

Edited by Dorothy Feldmann and Timothy J. Rupert

ADVANCES IN ACCOUNTING EDUCATION: TEACHING AND CURRICULUM INNOVATIONS VOLUME 16

ADVANCES IN ACCOUNTING EDUCATION: TEACHING AND CURRICULUM INNOVATIONS EDITED BY

TIMOTHY J. RUPERT Northeastern University, USA

United Kingdom
North America
Japan India
Malaysia
China

Emerald Group Publishing Limited Howard House, Wagon Lane, Bingley BD16 1WA, UK First edition 2015 Copyright r 2015 Emerald Group Publishing Limited Reprints and permission service Contact: [email protected] No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. Any opinions expressed in the chapters are those of the authors. Whilst Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters’ suitability and application and disclaims any warranties, express or implied, to their use. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-78441-588-4 ISSN: 1085-4622 (Series)

ISOQAR certified Management System, awarded to Emerald for adherence to Environmental standard ISO 14001:2004. Certificate Number 1985 ISO 14001

CONTENTS LIST OF CONTRIBUTORS

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CALL FOR PAPERS

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WRITING GUIDELINES

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EDITORIAL REVIEW BOARD

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STATEMENT OF PURPOSE

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IS INTELLIGENT ONLINE TUTORING SOFTWARE USEFUL IN REFRESHING FINANCIAL ACCOUNTING KNOWLEDGE? Mark Jackson and Betty Cossitt USING MINI-CASES TO DEVELOP AICPA CORE COMPETENCIES Vincent C. Brenner, Monica M. Jeancola and Ann L. Watkins COST ACCUMULATION IN SMALL BUSINESSES: EXPERIENTIAL LEARNING PROJECT C. Andrew Lafond and Kristin Wentzel THE IMPORTANCE OF THE FOREIGN CORRUPT PRACTICES ACT (FCPA) FOR ACCOUNTING EDUCATION Mark Holtzblatt, Belverd Needles, Norbert Tschakert, Marcus Wong and Jeffrey Klink

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PERSPECTIVES ON INFORMATION LITERACY IN THE ACCOUNTING CURRICULUM George Joseph, Asha George and Sherre Strickland

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TEACHING IFRS: OPTIONS FOR INSTRUCTORS Hubert Glover and Edward M. Werner

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CREATING A CHEAT-PROOF TESTING AND LEARNING ENVIRONMENT: A UNIQUE TESTING OPPORTUNITY FOR EACH STUDENT K. Bryan Menk and Stephanie Malone

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LIST OF CONTRIBUTORS Vincent C. Brenner

School of Business Administration, Stetson University, DeLand, FL, USA

Betty Cossitt

College of Business, University of Nevada, Reno, Reno, NV, USA

Asha George

Manning School of Business, University of Massachusetts Lowell, Lowell, MA, USA

Hubert Glover

LeBow College of Business, Drexel University, Philadelphia, PA, USA

Mark Holtzblatt

Monte Ahuja College of Business, Cleveland State University, Cleveland, OH, USA

Mark Jackson

College of Business, University of Nevada, Reno, Reno, NV, USA

Monica M. Jeancola

School of Business Administration, Stetson University, DeLand, FL, USA

George Joseph

Manning School of Business, University of Massachusetts Lowell, Lowell, MA, USA

Jeffrey Klink

Klink & Co. Inc., Pittsburgh, PA, USA

C. Andrew Lafond

School of Business, La Salle University, Philadelphia, PA, USA

Stephanie Malone

PricewaterhouseCoopers, Pittsburgh, PA, USA

K. Bryan Menk

A.J. Palumbo School of Business Administration, Duquesne University, Pittsburgh, PA, USA

Belverd Needles

Driehaus College of Business, De Paul University, Chicago, IL, USA vii

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Sherre Strickland

Manning School of Business, University of Massachusetts Lowell, Lowell, MA, USA

Norbert Tschakert

Bertolon School of Business, Salem State University, Salem, MA, USA

Ann L. Watkins

McCoy College of Business Administration, Texas State University, San Marcos, TX, USA

Kristin Wentzel

School of Business, La Salle University, Philadelphia, PA, USA

Edward M. Werner

School of Business, Rutgers University, Camden, NJ, USA

Marcus Wong

Fraud Investigation and Dispute Services, Ernst & Young LLP, San Francisco, CA, USA

CALL FOR PAPERS Submissions are invited for forthcoming volumes. Advances in Accounting Education: Teaching and Curriculum Innovations (AAETCI) publishes a wide variety of articles dealing with accounting education at the college and university level. AAETCI encourages readable, relevant, and reliable articles in all areas of accounting education including auditing, financial and managerial accounting, forensic accounting, governmental accounting, taxation, etc. Papers can be: • Thought pieces that share anecdotal experiences with various pedagogical tools. • Position papers on particular issues. • Comprehensive literature reviews grounded in theory. • Conceptual models. • Historical discussions with implications for current and future pedagogical efforts. • Methodology discussions. • Research studies with implications for improving accounting education. AAETCI provides a forum for sharing generalizable teaching approaches from curricula development to content delivery techniques. Pedagogical research that contributes to more effective teaching in colleges and universities is highlighted. All articles must explain how teaching methods or curricula/programs can be improved. Non-empirical papers should be academically rigorous, and specifically discuss the institutional context of a course or program, as well as any relevant tradeoffs or policy issues. Empirical reports should exhibit sound research design and execution, and must develop a thorough motivation and literature review, possibly including references from outside the accounting field.

SUBMISSION PROCESS Send two files by email: one with a manuscript copy but without a cover page, and the other solely a cover page with author information. Cover ix

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pages should list all authors’ names and addresses (with telephone numbers, fax numbers, and e-mail addresses). The authors’ names and addresses should not appear on the abstract. To assure anonymous review, authors should not identify themselves directly or indirectly. Also, attach a copy of any research instruments. Two reviewers assess each manuscript submitted and reviews are completed in a timely manner, usually 60
90 days. Send manuscripts to [email protected].

WRITING GUIDELINES 1. Write your manuscript using active voice. Therefore, you can use the pronouns “we” and “I.” Also, please avoid using a series of prepositional phrases. We strongly encourage you to use a grammar and spell checker on manuscripts before you submit to our journal. Parsimony is a highly desirable trait for manuscripts we publish. Be concise in making your points and arguments. The text of typical manuscripts (exclusive of references, tables, and appendices) are no longer than 30 pages. 2. Each paper should include a cover sheet with names, addresses, telephone numbers, fax numbers, and e-mail address for all authors. The title page also should include an abbreviated title that you should use as a running head (see item 7 below). The running head should be no more than 70 characters, which includes all letters, punctuation, and spaces between words. 3. The second page should consist of an Abstract of approximately 150200 words. 4. You should begin the first page of the manuscript with the manuscript’s title. DO NOT use the term “Introduction” or any other term at the beginning of the manuscript. Simply begin your discussion. 5. Use uniform margins of 1 1/2 inches at the top, bottom, right and left of every page. Do not justify lines, leave the right margins uneven. Do not hyphenate words at the end of a line; let a line run short or long rather than break a word. Type no more than 25 lines of text per page. 6. Double space all lines of text, which includes title, headings, and quotations. 7. After you have arranged the manuscript pages in correct order, number them consecutively, beginning with the title page. Number all pages. Place the number in the upper right-hand corner using Arabic numerals. Identify each manuscript page by typing an abbreviated title (header) above the page number. 8. All citations within your text should be formatted with the author(s) name and the year of publication. An appropriate citation is Catanach (2004) or Catanach and Feldmann (2005), or Catanach et al. (2006) when there are three or more authors. You do not need to cite six or xi

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seven references at once, particularly when the most recent references refer to earlier works. Please try to limit yourself to two or three citations at a time, preferably the most recent ones. 9. You should place page numbers for quotations along with the date of the material being cited. For example: According to Beaver (1987, 4), “Our knowledge of education research … and its potential limitations for accounting …”. 10. Headings: Use headings and subheadings liberally to break up your text and ease the reader’s ability to follow your arguments and train of thought. • First-level headings should be UPPER CASE ITALICS, bold face, and flush to the left margin. ○ Second level headings should be in Bold Face Italics, flush to the left margin with only the first letter of each primary word capitalized. ▪ Third-level headings should be flush to the left margin, in Italics (but not bold face), with only the first letter of each primary word capitalized. 11. Notes or Endnotes should be used only if absolutely necessary. Try to incorporate endnote/footnote material into the body of the manuscript. Notes must be identified in the text by consecutive numbers, then enclosed in square brackets and listed at the end of the article. Place them on a separate section before your references. Begin notes on a separate page, with the word “Notes” centered at the top of the page. All notes should be double-spaced; indent the first line of each note five spaces. 12. Your reference pages should appear immediately after your “Notes” section (if any) and should include only works cited in the manuscript. The first page of this section should begin with the word “References” centered on the page. References to working papers are normally not appropriate. All references must be available to the reader; however, reference to unpublished dissertations is acceptable. Sample Book References Runkel, P. J. and J. E. McGrath. (1972), Research on Human Behavior: A Systematic Guide to Method; Holt, Rinehart and Winston, New York, NY. Smith, P. L. (1982), “Measures of variance accounted for: theory and practice,” in Keren, G. (Ed.), Statistical and Methodological

Writing Guidelines

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Issues in Psychology and Social Science Research, Erlbaum, Hillsdale, NJ, pp. 101
129. Stout, D. E. and D. E. Wygal. (1994), “An empirical evidence of test item sequencing effects in the managerial accounting classroom: Further evidence and extensions,” in Schwartz, Bill N. (Ed.), Advances in Accounting, Vol. 12, JAI Press, Greenwich, CT, pp. 105
122. Sample Journal References Abdolmohammadi, M. J., K. Menon, T. W. Oliver, and S. Umpathy. (1985). The role of the doctoral dissertation in accounting research careers. Issues in Accounting Education, 22, 59
76. Thompson, B. (1993). The use of statistical significance tests in research: Bootstrap and other methods. Journal of Experimental Education, 61, 361
377. Simon, H. A. (1980). The behavioral and social sciences. Sciences, July, 72
78. Electronic Sources If available online, the full URL should be supplied at the end of the reference. 13. You should label TABLES and FIGURES as such and number them consecutively (using Arabic numerals) in the order in which you mention them first in the text. Indicate the approximate placement of each table/figure by a clear break in the text, inserting: TABLE (or FIGURE) 1 ABOUT HERE Figures should be placed after your References section and tables should follow figures. Begin each table and figure on a separate page. 14. You should list any acknowledgments on a separate page in a separate electronic file to preserve author anonymity. Type the word “Acknowledgment,” centered, at the top of the page and type the acknowledgment itself as a double-spaced, single paragraph. Once the editorial review process is complete, your acknowledgments will be inserted immediately after the last page of text (before the Notes and References Sections).

EDITORIAL REVIEW BOARD Brenda Anderson Brandeis University, USA

Dann Fisher Kansas State University, USA

Cynthia Blanthorne University of Rhode Island, USA

Mary Anne Gaffney Temple University, USA

Cathleen Burns Creative Action Learning Solutions LLC, USA

Brian Patrick Green University of Michigan-Dearborn, USA

Thomas G. Calderon The University of Akron, USA

Julie H. Hertenstein Northeastern University, USA

Paul M. Clikeman University of Richmond, USA

Brian Hogan University of Pittsburgh, USA

Ann Boyd Davis Tennessee Technological University, USA

Susan B. Hughes University of Vermont, USA David Hulse University of Kentucky, USA

Mary S. Doucet California State UniversityBakersfield, USA

Julia Karcher University of Louisville, USA

Connie Esmond-Kiger Ohio University, USA Carol M. Fischer St. Bonaventure University, USA

Beth Kern Indiana University South Bend, USA

Michael J. Fischer St. Bonaventure University, USA

Joan Lee Fairfield University, USA

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Linda M. Lovata Southern Illinois University Edwardsville, USA

Michael S. Schadewald University of Wisconsin-Milwaukee, USA

Susan A. Lynn University of Baltimore, USA

Michael K. Shaub Texas A&M University, USA

James J. Maroney Northeastern University, USA Jared Moore Oregon State University, USA Curtis M. Nicholls Bucknell University, USA Philip R. Olds Virginia Commonwealth University, USA Lynn M. Pringle Arizona State University, USA

Paul A. Shoemaker University of Nebraska-Lincoln, USA Jay C. Thibodeau Bentley University, USA Pierre L. Titard Southeastern Louisiana University, USA Martha L. Wartick University of Northern Iowa, USA

STATEMENT OF PURPOSE Advances in Accounting Education: Teaching and Curriculum Innovations is a refereed academic journal whose purpose is to meet the needs of individuals interested in the educational process. We publish thoughtful, well-developed articles that are readable, relevant, and reliable. Articles may be non-empirical or empirical. Our emphasis is pedagogy, and articles MUST explain how instructors can improve teaching methods or accounting units can improve curricula/programs. Non-empirical manuscripts should be academically rigorous. They can be theoretical syntheses, conceptual models, position papers, discussions of methodology, comprehensive literature reviews grounded in theory, or historical discussions with implications for current and future efforts. Reasonable assumptions and logical development are essential. All manuscripts should discuss implications for research and/or teaching. Sound research design and execution are critical for empirical reports. All articles should have well-articulated and strong theoretical foundations, and establishing a link to the non-accounting literature is desirable.

REVIEW PROCEDURES Advances in Accounting Education: Teaching and Curriculum Innovations will provide authors with timely reports that clearly indicate the review status of the manuscript. Authors will receive the results of initial reviews normally within eight to twelve weeks of manuscript submission, if not earlier. We expect authors to work with a co-editor who will act as a liaison between the authors and the reviewers to resolve areas of concern.

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IS INTELLIGENT ONLINE TUTORING SOFTWARE USEFUL IN REFRESHING FINANCIAL ACCOUNTING KNOWLEDGE? Mark Jackson and Betty Cossitt ABSTRACT Purpose
Examine the effectiveness of online tutoring software to ameliorate poor performance in intermediate financial accounting. Methodology/approach
Probit regression analysis comparing users versus nonusers of online accounting tutoring software, as well as analysis of student achievement pre and post-technology adoption over a 10-year period. Findings
We confirm prior research findings that the number of terms that have transpired since a student took introductory financial accounting, whether they took the course at a two-year college, or if they needed to repeat the introductory course, are all negatively associated with performance in intermediate accounting. We find evidence that an online tutoring system, ALEKS®, helps moderate these negative correlations. Results suggest that in upper division courses where student knowledge of underlying basic material is uneven, online tutors are an effective tool

Advances in Accounting Education: Teaching and Curriculum Innovations, Volume 16, 1
19 Copyright r 2015 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1085-4622/doi:10.1108/S1085-462220150000016001

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in bringing students up to an equal level of competence without sacrificing class time. Practical implications
Provides empirical evidence on the usefulness of online accounting software as a review tool in intermediate accounting. Social implications
Disadvantages experienced by accounting students due to when, where, and how they learned introductory accounting can be overcome quickly. Originality/value
Although vendors of intelligent online tutoring software market their product as a useful review tool for intermediate accounting, academic research has not examined the effectiveness of these products. Keywords: Financial accounting; intermediate; artificial intelligence; tutoring systems; online tutors; ALEKS®

Many students enrolled in intermediate accounting courses have limited introductory accounting knowledge. This can be attributed to the time lapse since they first learned the material, poor prior instruction, or poor learning. Intermediate instructors often spend extensive time reviewing introductory material before the class is ready for more advanced topics. While advances in education technology appear to offer useful solutions in this context, most empirical studies (Baxter & Thibodeau, 2011; Johnson, Phillips, & Chase, 2009; Potter & Johnston, 2006) only evaluate these advances in the context of learning new material
not in the context of reviewing and refreshing material learned previously, which is a different metacognitive task (Garrett, Alman, Gardner, & Born, 2007). We examine the ability of online tutoring software (OTS) to aid students with a weak knowledge or memory of introductory accounting material and find evidence that suggests the technology is successful in equalizing base accounting knowledge between these students and their more advanced peers. Prior studies (Conway, Gardiner, Perfect, Anderson, & Cohen, 1997; Sanders & Willis, 2009; Schmidt & Wartick, 2013) find that the number of terms since a student completed introductory financial accounting, the number of times they had to repeat the course, and if they completed the class in a nonuniversity setting are negatively related to intermediate accounting performance. This paper confirms these earlier findings. More importantly,

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we examine whether the use of OTS can moderate these negative associations. We compare student performance in intermediate accounting in the years prior to and post-OTS adoption. We also compare users of OTS with nonusers in the postadoption period. In both tests, we find that the negative relation between intermediate performance and the factors mentioned above are lessened for students using the OTS. Overall, the evidence suggests that OTS is effective in updating and completing students’ understanding of introductory accounting material. The paper contributes to the accounting education literature in several ways. First, OTS has been examined extensively in the mathematics and science fields, but there are only a few studies on the use of this technology in an accounting context. Also, most studies involving education technology examine the usefulness of the technology in the initial teaching of material in tandem with traditional methods, and over the entire course term, although this study examines its usefulness in reviewing and refreshing introductory material during a more advanced course, over a very short period, and without direct instructor involvement. Anecdotally, two providers of OTS, ALEKS® and Quantum®, have made significant efforts to market their products to intermediate accounting professors as a review tool, even though they have only introductory accounting content. This paper provides the accounting education community with evidence on the successful use of these products beyond their original purpose. Third, universities recognize the uneven preparation of students entering intermediate accounting (Schmidt & Wartick, 2013). In some cases an entrance exam is used to screen students (Sanders & Willis, 2009), but there are no studies to date of the role technology can play in preparing students for the exam or class. Finally, many studies on the effectiveness of OTS compare one school term, year, or class with another (Baxter & Thibodeau, 2011; Johnson et al., 2009; Potter & Johnston, 2006), but these short-term studies may be limited by the “novelty effect” (Sansone, Fraughton, Zachary, Butner, & Heiner, 2011), where the results are difficult to disentangle from the heightened interest students have in a technology recently introduced into the curriculum. We overcome this limitation with six- and 10-year samples, much longer than typical empirical studies in the accounting education/technology literature. The paper is organized as follows: the following section discusses relevant literature and develops the hypotheses. The “Methodology” section presents methodology to test these hypotheses, while the “Samples and Results” section presents the results of those tests. The paper ends with a brief conclusion.

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PRIOR LITERATURE AND HYPOTHESES Factors Influencing Student Success in Intermediate Accounting The literature has identified many factors related to student performance in intermediate accounting. Schmidt and Wartick (2013) find that the length of time between taking introductory and intermediate accounting is negatively related to performance in intermediate accounting. This result is not surprising, since scientific psychology (e.g., Ebbinghaus, 1964) generally concludes that, as common sense would dictate, memory declines with time. Schmidt and Wartick (2013) also find that students who take introductory accounting at a two-year institution tend to earn lower grades in intermediate accounting, a finding consistent with earlier studies (Turner, Holmes, & Wiggins, 1997). Sanders and Willis (2009) suggests that two-year colleges do not prepare students for content and rigor of intermediate accounting. The accounting education literature also finds that poor performance in an introductory course is related to poor performance in an intermediate course (Jackson, 2014; Schmidt & Wartick, 2013). Conway et al. (1997) find that poorer performing students appear to retain less because they only “remember” information rather than “know” it. This suggests that students who struggle with a topic (e.g., students failing and needing to repeat the introductory financial accounting course) will retain less of what they did learn than their peers, leading to poorer performance in higher level classes. The preceding discussion of the literature suggests that students who take their intermediate accounting course long after their introductory course, who take introductory accounting at a two-year institution, or those who need to take introductory accounting several times, tend to underperform their peers in intermediate accounting. Sanders and Willis (2009) discuss a remedial program that has helped students overcome these disadvantages. Although the program includes the use of an online tutoring system, it is combined with instructor-led resources, making it difficult to determine the role technology has in student improvement.

Online Homework and Tutoring Software Advances in technology in recent decades have led to many innovations in accounting education. One of the most promising uses of technology is the advent of online homework and tutoring software. Dillard-Eggers,

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Wooten, Childs, and Coker (2008) and Gaffney, Ryan, and Wurst (2010) find that online homework increases student performance in introductory accounting. Students especially benefit from the immediate feedback these online systems provide (Marriott, 2009). Tutoring has long been a component of supplemental education. Jones and Fields (2001) confirm the intuitive result that human tutors are effective in teaching accounting, especially when they are trained to help students “learn how to learn.” With the development of artificial intelligence in computer technology, software has been designed that attempts to fill the role of a human tutor. Online tutoring software (OTS) is designed to assess the underlying knowledge a student has or is lacking in the way to achieving a learning objective and can tailor the material presented to fit the student’s needs. Johnson et al. (2009), Potter and Johnston (2006), and Baxter and Thibodeau (2011) describe three such systems designed to teach the accounting cycle (Quantum®, MarlinaLS™, and ALEKS®, respectively) and find evidence that students using such a system earned higher grades than their peers. Phillips and Johnson (2011) compare an OTS with an online homework system and find evidence that student performance increased at a faster rate when using the online tutor. While each of these studies demonstrate the effectiveness of OTS to assist students learning material over the course of a semester, the usefulness of the software as a review tool over a shorter period is left unexplored. The cognitive skills (and time) involved in initial learning are very different than those involved in refreshing (or re-learning) information (Garrett et al., 2007; Lalley & Gentile, 2009). This suggests that while there may be evidence that OTS such as ALEKS® and Quantum® are useful in the initial learning of financial accounting, it is an open question as to whether these programs are useful in reviewing introductory material in the setting of a more advanced class.

Hypotheses Prior literature suggests OTS is an effective teaching tool. However, the ability of OTS to identify a student’s underlying knowledge (or lack thereof) suggests it may also be effective in reviewing previously learned material. The literature suggests that time lag between introductory and intermediate accounting, introductory accounting taken at a two-year college, and multiple introductory accounting attempts are negatively related to intermediate accounting performance. If OTS is a useful tool in refreshing introductory

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accounting knowledge, then the use of OTS in an intermediate accounting course should help moderate these negative relations. Thus, we test the following three hypotheses: H1. The use of OTS at the beginning of the intermediate accounting course moderates the negative relation between intermediate accounting performance and the number of terms between introductory and intermediate accounting. H2. The use of OTS at the beginning of the intermediate accounting course moderates the negative relation between intermediate accounting performance and taking introductory accounting at a two-year college. H3. The use of OTS at the beginning of the intermediate accounting course moderates the negative relation between intermediate accounting performance and taking the introductory course more than once.

METHODOLOGY We adopted ALEKS® in the Fall term of 2004 for Intermediate Accounting I at a large public university in western United States. The instructor selects the content to make available to students and creates a class code specific to that term. The instructor makes students aware of the software program (and code) in the syllabus and in discussions on the first day of class, but students use only the program outside of class hours. Although the OTS is available during the entire semester (and for a few days prior), usage is intense during the first two or three weeks of term, as students are aware of a rigorous in-class exam of introductory accounting at the end of the second or third week. Online reports are available to the instructor that indicate how much material each student has mastered (and how much time they have spent on the system), and these reports generally correlate to student performance on the introductory exam.1 While purchase of the software is mandatory (the platform is used to administer the exam), the usage of the product is not. Students not using the OTS are easily identifiable by reports showing zero time spent on the software. Anecdotal evidence suggests that the software is successful in helping students refresh their introductory accounting knowledge. We aim to provide empirical evidence as to the effectiveness of this OTS, by studying student

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data from 2000 to 2010 (provided by the University Registrar, in compliance with student privacy policies). We employ two research designs. In one, we observe that while purchase of the software is mandatory, use is at student discretion. A natural experiment is to compare students using and not using the OTS and to measure the impact of the use of the program. An alternative design is to analyze student data for the years both prior to OTS adoption and postadoption. While the long time period in this methodology makes it challenging to disentangle any OTS effect from other changes over time, this type of model removes the problem of self-selection that exists when underlying student characteristics may drive the choice to use the software. To test the hypotheses, we estimate the following equation on the sample of students in the postadoption period: intmedGrade = α þ β1 introGrade þ β2 age þ β3 major acc þ β4 major bus ð1Þ þ β5 terms þ β6 2year þ β7 intro attempts þ β8 OTS þ β9 termsXots þ β10 2yearXots þ β11 attemptsXots þ ɛ where intmedGrade = the numeric equivalent of a student’s grade in intermediate accounting (where A = 4.0, A − =3.7, B + =3.3, B = 3, B − =2.7, C + =2.3, C = 2, C − =1.7, D + =1.3, D = 1, D − =0.7, F = 0, and W = 0 (withdrawals generally occur late in term when student is headed for a failing grade)), introGrade = the numeric equivalent of a student’s grade in introductory accounting (if taken multiple times, only last attempt used), age = student age when taking intermediate, major_acc (bus)=1 if a student graduated as an accounting major (nonaccounting business major) and 0 otherwise (information on declared major was unavailable), terms = number of terms between taking introductory and intermediate accounting (e.g., if intermediate taken immediately after introductory accounting, terms = 0), 2year = 1 if a student transferred introductory financial accounting credits from a two-year college, and 0 otherwise, intro_attempts = the number of additional times a student took introductory accounting, and

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OTS = indicator variable equal to one if student made use of the software and zero otherwise, and OTS is multiplied by terms, 2year, and intro_attempts to form interaction variables. IntroGrade proxies for student capability, as the literature indicates that grades earned in introductory accounting have a positive relation to intermediate accounting performance (Jackson, 2014; Schmidt & Wartick, 2013; Turner et al., 1997).2 The literature has found conflicting results controlling for age (Dowling, Godfrey, & Gyles, 2003; Tanewski, deLange, & Wyatt, 2001), so we make no prediction on the age variable. Accounting majors perform better in intermediate accounting than nonaccounting majors (Turner et al., 1997), so we expect a positive coefficient on major_acc and a negative coefficient on major_bus (note that major_bus refers to nonaccounting business majors such as finance, marketing, and management majors, while a third category, yet-to-graduate/nonbusiness majors, is captured by the intercept). Schmidt and Wartick (2013) find that the time lag between taking introductory and intermediate accounting is negatively related to intermediate accounting performance, so we predict terms will have a negative coefficient (results are unchanged if we replace terms by an indicator variable equal to one if number of terms is greater than the mean). Schmidt and Wartick (2013) also find that transfer students from two-year colleges have poorer performance in intermediate accounting, so we expect a negative coefficient on 2year. Prior literature also suggests students having to repeat a course will underperform their peers in an advanced class (Conway et al., 1997), so we expect a negative coefficient on intro_attempts (results are unchanged if we replace intro_attempts with an indicator variable equal to 1 if student retakes introductory accounting). OTS captures the overall effect of the software on student performance in intermediate accounting. However, it may also distinguish between students that felt no need to use the program, whether due to indifference or because the student already had a mastery of introductory material. Thus, we make no prediction for this variable. The interaction terms capture the effect OTS has on the predicted negative effects of terms, 2year, and intro_attempts. In line with the hypotheses, we predict these interaction terms will be positively related to intmedGrade. This would suggest that the OTS moderates the negative effects of an extended time lapse between introductory and intermediate accounting, of transferring from a two-year college or from repeating the introductory course.

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Self-selection bias may interfere with the interpretation of the results in Eq. (1), as students may opt out of using the software due to underlying factors that may be related to their class performance and the variables of interest. As an alternative research design, we compare OTS users with students that did not have the option of using OTS. We create a sample including students from the four-year period prior to OTS adoption as well as OTS users in the postadoption period and regress the following equation to test the hypotheses: intmedGrade = α þ β1 introGrade þ β2 age þ β3 major acc þ β4 major bus ð2Þ þ β5 terms þ β6 2year þ β7 intro attempts þ β8 post þ β9 termsXpost þ β10 2yearXpost þ β11 attemptsXpost þ ɛ where post is an indicator variable equal to one if an observation occurs after the adoption of OTS in the intermediate curriculum (beginning in Fall 2004), and zero otherwise, and post is multiplied by terms, 2year, and intro_attempts to form interaction variables. We make no prediction for post. The interaction terms capture the effect OTS has on the predicted negative effects of terms, 2year, and intro_attempts. In line with the hypotheses, we predict these interaction terms will be positively related to intmedGrade. This would suggest that the OTS moderates the negative effects of an extended time lapse between introductory and intermediate accounting, of transferring from a two-year college, or from repeating the introductory course.

SAMPLES AND RESULTS Samples To facilitate the study, we form two samples to examine contrasting groups: (1) OTS users versus nonusers in the postadoption period and (2) students in the preadoption period versus students in the postadoption period. The postadoption period runs from Fall 2004 through Spring 2010 (i.e., 12 semesters). During this period, 672 students used OTS, while 216 did not. In the alternative design, we compare the 672 students using the software with 391 students from the period prior to OTS adoption (Spring 2000 through Spring 2004; nine semesters), for a sample of 1,063 students.

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MARK JACKSON AND BETTY COSSITT

Table 1 provides descriptive statistics on these samples. Panel A of Table 1 compares student characteristics for those using and not using OTS in the postadoption period. It is not surprising that a larger percentage of accounting majors are users of the software, given their incentives to do well in an Table 1.

Summary Statistics.

Panel A: Users versus nonusers after tutoring software adoption Variable

intmedGrade introGrade age major_acc major_bus terms 2year intro_attempts

Did Not Use Software (n = 216)

Made Use of Software (n = 672)

Mean

Med

Range

StdD

Mean

Med

Range

StdD

t-test Δ

2.16 3.33 26.06 0.16 0.11 2.14 0.19 0.15

2.70 3.70 24.00 0.00 0.00 1.00 0.00 0.00

0.0
4 0.7
4 20
54 0
1 0
1 0
21 0
1 0
3

1.38 0.75 6.26 0.37 0.31 3.97 0.40 0.42

2.11 3.36 25.15 0.24 0.15 3.18 0.29 0.19

2.00 3.30 22.00 0.00 0.00 2.00 0.00 0.00

0.0
4 1.0
4 19
58 0
1 0
1 0
21 0
1 0
5

1.32 0.67 6.89 0.43 0.36 3.94 0.45 0.54

0.46 0.60 1.73* 2.52** 1.59 3.38*** 2.74*** 1.06

Panel B: Pre versus post-tutoring software adoption Variable

intmedGrade introGrade age major_acc major_bus terms 2year intro_attempts

Preadoption (n = 391)

Postadoption (n = 672)

Mean

Med

Range

StdD

Mean

Med

Range

StdD

t-test Δ

1.85 3.29 25.68 0.28 0.28 3.09 0.23 0.12

2.00 3.00 23.00 0.00 0.00 2.00 0.00 0.00

0.0
4 1.0
4 19
51 0
1 0
1 0
20 0
1 0
3

1.36 0.68 6.43 0.45 0.45 4.38 0.42 0.36

2.11 3.36 25.15 0.24 0.15 3.18 0.29 0.19

2.00 3.30 22.00 0.00 0.00 2.00 0.00 0.00

0.0
4 1.0
4 19
58 0
1 0
1 0
20 0
1 0
5

1.32 0.67 6.89 0.43 0.36 3.94 0.45 0.54

3.03*** 1.68* 1.24 1.25 5.11*** 0.35 2.27** 2.45**

Sample for Panel A comes from postadoption period (Fall 2004
Spring 2010). Sample for Panel B comes both pre and postadoption periods (Spring 2000
Spring 2010) and excludes students in postadoption period that did not use the software. IntmedGrade is the letter grade in intermediate accounting, converted to numeric form (where A = 4, A − =3.7, B + =3.3, etc.). IntroGrade is the letter grade in introductory accounting, converted to numeric form. Age is student age at time of intermediate course. Major_acc (major_bus) is an indicator variable equal to one if student graduated as an accounting major (nonaccounting business major), and zero otherwise. Terms is number of terms transpired between introductory and intermediate accounting (e.g., if a student took intermediate immediately after introductory accounting, terms = 0). 2year is an indicator variable equal to one if introductory course was completed at a two-year college, and zero otherwise. Intro_attempts is the number of additional times student took the introductory accounting course. t-test Δ is pooled t-test of absolute difference between variable means across users and nonusers (Panel A) or pre and postsoftware adoption periods (Panel B). ***, **, * represents significance at the 1, 5, and 10 percent levels.

Tutoring Software & Refreshing Accounting Knowledge

11

important part of their major.3 Also noteworthy is the increased usage of OTS among students that attended a two-year college or had a longer time interval between their introductory and intermediate accounting courses. It is an empirical question whether the use of OTS benefited these students. Panel B of Table 1 compares student statistics in the pre and postadoption periods. It is noteworthy that there is a statistically significant increase in the number of students transferring in from two-year colleges, as well as an increase in extra attempts at introductory accounting. Although an increase in these variables predicts a decrease in intermediate accounting performance, no change in intermediate grades is observed, suggesting that OTS is moderating the negative impact these factors have on student performance. A correlation matrix is presented in Table 2. Pearson coefficients displayed above the diagonal correspond to the postadoption sample, while coefficients displayed below the diagonal correspond to the sample that includes both pre and postadoption periods. An examination of these coefficients reveals the expected negative correlations between intmedGrade and terms, 2year, and intro_attempts. There are several expected correlations among the control variables (such as accounting majors having higher introductory grades), but low variable inflation factor scores in the regressions suggest that multicollinearity is not a problem.

Tests of Hypotheses To analyze the association between time, two-year college education, and multiple attempts at an introductory course on intermediate performance, as well as the impact of OTS on these associations, Eq. (1) is estimated using the probit regression procedure on the postadoption sample when OTS was available to all students. First, Eq. (1) is estimated with only the control variables, followed by regressions including OTS, each of the interaction terms separately, and then with all variables present. Table 3 presents the results. As expected, there is a strong positive relation between introGrade and intmedGrade, suggesting that introductory performance is a powerful predictor of intermediate performance. Age also has a positive relation. Consistent with prior research, major_acc (major_bus) is related positively (negatively) to intermediate performance, suggesting that accounting majors outperform nonaccounting business majors in intermediate accounting. OTS tends to have a negative coefficient (although only statistically significant in regressions that include the terms interaction), suggesting that weaker students choose to use the software. Without

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Table 2. intmedGrade

0.283