On Accounting Education

by Donald Kieso, Jerry Weygandt, Paul Kimmel, and Terry Warfield

orldCom, Enron, and Fannie Mae: These and other accounting scandals have dominated the popular press for the past five years, eroding public confidence in auditing and financial reporting. More than 90 million Americans hold some form of investment in stocks, and many suffered greatly because their investment decisions relied on false financial information provided by dishonest managements. Accounting matters to society; without relevant and reliable financial information, our markets will not work.

In response to the scandals, Congress passed the most important legislation since the Securities Exchange Act of 1934—the Sarbanes–Oxley Act of 2002, precipitating a reexamination by the accounting profession of its most fundamental concepts and principles. Many questions arose regarding the transparency of financial reporting. How should we value assets and liabilities? What is the proper reporting for off-balance-sheet financing transactions, hybrid securities, and derivatives?

At the same time, other questions have arisen in connection with the emergence of a global economy. How quickly should international and U.S. accounting principles converge? In what format should companies deliver financial information globally? What changes might there be in the nature of the information provided?

It all adds up to a challenging and exciting time. In the wake of the accounting scandals, it is crucial that we get the accounting right as we develop and report information that will be useful to financial decision makers around the world. More than ever before, anyone with an interest in business must clearly have a basic understanding of accounting.

The opportunities for accounting educators are tremendous. Not only is technology providing the means to improve financial reporting, it is providing us the opportunity to change how we teach and how students learn, as new skills become an essential requirement for those entering the business world. Already, over one third of the students using our introductory financial accounting texts do their homework online using the WileyPLUS system. WileyPLUS grades homework automatically, giving students immediate feedback. Homework within WileyPLUS is linked to an electronic textbook as well as to tutorials and other supplemental materials, providing a richly layered environment suitable for a wide array of learning styles and needs. Many accounting instructors have restructured their courses to take full advantage of these educational resources; their students can now learn some of the more procedural aspects of accounting outside of class, freeing up class time for discussion of real-world issues, conceptual topics, and business ethics.

As accounting educators and textbook authors, we look forward to what the future holds. Through the challenges and opportunities of regulatory change, globalization, and technology, we reinvent ourselves. Today we spend much of our time working on issues that were not in the realm of possibility even five years ago. We are quite certain that will be equally true five years from now.

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