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Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Using Problem-Based Learning in Accounting
James D. Hansen
To cite this article: James D. Hansen (2006) Using Problem-Based Learning in Accounting, Journal of Education for Business, 81:4, 221-224, DOI: 10.3200/JOEB.81.4.221-224
To link to this article: http://dx.doi.org/10.3200/JOEB.81.4.221-224
Published online: 07 Aug 2010.
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ABSTRACT. In this article, the author
describes the process of writing a
problem-based learning (PBL) problem and shows
how a typical end-of-chapter accounting
problem can be converted to a PBL
lem. PBL uses complex, real-world
prob-lems to motivate students to identify and
research the concepts and principles they
need to know to solve these problems.
Stu-dents work in teams to acquire,
communi-cate, and integrate information. The goals
of PBL are to help students (a) think
criti-cally, analyze, and solve complex
real-world problems; (b) find, evaluate, and use
learning resources; (c) work cooperatively
in teams; (d) demonstrate effective
commu-nication skills; and (e) use content
knowl-edge and intellectual skills to become
con-tinual learners.
Copyright © 2006 Heldref Publications
usiness educators who have been thinking about supplementing the traditional, lecture-based method of teaching with another approach for engaging students may want to try prob-lem-based learning (PBL). PBL is a teaching method that involves students as active, independent learners and problem solvers in team-based collabo-rative learning.
PBL has been used in medical schools for years and extensively at sev-eral other institutions as well. PBL orig-inated in medical schools at Case West-ern Reserve in Cleveland, Ohio and McMaster University in Hamilton, Ontario, Canada. McMaster developed its entire curriculum around PBL and numerous other medical schools have adopted its model. The University of Maastricht in the Netherlands has redesigned its undergraduate curricu-lum in marketing and management to conform to a PBL approach. The new curriculum is structured with problems created around concepts with which fac-ulty want students to become familiar.
The University of Delaware and Sam-ford University in Birmingham, Alabama are two of several schools that have pro-moted PBL across several disciplines. However, PBL is still a relatively new approach in accounting education. In accounting education, instructors often use typical end-of-chapter problems to illustrate content taught in a lecture. With
PBL, learning is initiated with a complex problem that often requires students to use thinking skills of a higher order than those necessary to solve typical end-of-chapter problems. In this article, I describe PBL and the process of writing a PBL problem using an example of a typical end-of-chapter long-term debt-auditing problem converted to a more challenging PBL problem.
New Teaching Strategies
The call for new teaching strategies in accounting education has been ongoing. The Bedford Report (American Account-ing Association, 1986) recommended “educational experiences for students that require them to be active, indepen-dent learners and problem solvers rather than passive recipients of information.” The Accounting Education Change Commission (AECC) stated that
Students should be taught the skills and strategies that help them learn throughout their lifetimes. Students must be active par-ticipants in the learning process, not pas-sive recipients of information. They should identify and solve unstructured problems that require use of multiple information sources. Learning by doing should be emphasized. Working in groups should be encouraged (AECC, 1990, p. 309).
The American Institute of Certified Public Accountants’ Core Competency Framework for Entry into the Accounting Profession (i.e., the Framework; 1999) is
B
VIEWPOINT
Using Problem-Based Learning in
Accounting
JAMES D. HANSEN
MINNESOTA STATE UNIVERSITY MOORHEAD MOORHEAD, MINNESOTA
ue to define new learning issues as they progress through the problem (Boud & Feletti, 1997).
Writing Good PBL Problems
One of the biggest challenges in PBL is writing good problems. A well-written problem will engage, motivate, and chal-lenge students. Duch (2001) lists five characteristics of good PBL problems:
1. An effective problem must engage students’ interest and motivate them to probe for deeper understanding of the concepts being introduced.
2. Good problems require students to make decisions or judgments based on facts, information, logic, or rationaliza-tion.
3. Cooperation from all members of the team should be necessary to effec-tively work through a problem.
4. The initial questions in the problem should have one or more of the follow-ing characteristics so that all students in the groups are initially drawn into a dis-cussion of the topic: (a) they should be open-ended, not limited to one correct answer; (b) they should be connected to previously learned knowledge; and (c) they should incorporate controversial issues that will elicit diverse opinions.
5. The content objectives of the course should be incorporated into the problems and the questions should chal-lenge students to develop higher order thinking skills such as analysis, synthe-sis, and evaluation.
A good PBL problem reaches a high-er cognitive level than a typical end-of-the-chapter problem. Duch (2001) cate-gorizes problems by three levels. A level 1 problem is a typical end-of-chapter problem, at the knowledge or compre-hension cognitive level. The problem is generally confined to the topics addressed in the chapter and all of the information needed to solve the prob-lem is given.
A level 2 problem adds a storytelling aspect to the end-of-chapter problem. This provides some motivation for stu-dents to solve the problem and it requires them to go beyond simply inserting numbers into a formula to solve it. There may even be some deci-sion making involved, placing the ques-tioning at the comprehension or
appli-cation level. All the information needed to solve a level 2 problem is given in the problem itself or the chapter.
A level 3 problem requires analysis, synthesis, or evaluation. It is related to the real world, drawing the student into the problem. Not all of the information needed is given in the problem or chap-ter or perhaps even in the textbook. Stu-dents need to do some research, discov-er new matdiscov-erial, and make judgments and decisions based on the information learned. The problem may have more than one acceptable answer, based on the assumptions students make.
The examples in the Appendixes show how the topic of auditing long-term debt (LTD) could be taught using a subject-based learning approach or, alternatively, as problem-based learn-ing. With subject-based learning, stu-dents are told what they need to know, they learn it, and they are given a prob-lem to illustrate how to use the knowl-edge they have learned. The level 1 and 2 problems shown in Appendixes A and B, respectively, work well with this method. In the level 1 problem in Appendix A, students need to remember audit objectives and match them with the procedures given, thus requiring knowledge and comprehension. A level 2 problem adds a storytelling aspect to the end-of-chapter problem (see Appen-dix B). For the level 2 problem shown in Appendix B, students need to remember audit objectives and list procedures that apply to the objectives. This would require students to apply knowledge and comprehension as in the level 1 prob-lem. However, as mentioned, the level 2 problem adds a storytelling element by presenting students with a particular scenario. In the case of the problem in Appendix B, the student is drawn into the scenario.
In PBL, a problem is posed, students identify what they need to know, they learn it, and then they apply the knowl-edge they have learned to solve the problem. The level 3 problem shown in Appendix C works well with a PBL approach (for an expanded version of this LTD problem and examples of other PBL accounting problems, see the Uni-versity of Delaware’s Problem-Based Learning Clearinghouse, https://chico .nss.udel.edu/Pbl/).
an extension of the AECC’s report. The Framework supports a shift from a con-tent-driven to a skills-based curriculum and lists PBL as a recommended teaching strategy, including problem-based learn-ing cases and problem-based learnlearn-ing- learning-guided design (AICPA, 1999).
What Is Problem-Based Learning?
PBL is learning that is initiated by a posed problem (Boud & Feletti, 1997). It is student-centered learning rather than teacher-centered learning. Com-plex, real-world problems are used to motivate students to identify and research the concepts and principles they need to know to work through these problems. Students work in teams acquiring, communicating, and integrat-ing information. In contrast to the more traditional approach of assigning an application problem at the end of a con-ceptual unit, PBL uses problems to motivate, focus, and initiate student learning. The case or problem is delib-erately intended to act as a catalyst to promote the acquisition of new knowl-edge. Students should not have suffi-cient prior knowledge to be able to solve the problem right away (Milne & McConnell, 2001).
The goals of PBL are to help students (a) think critically, analyze, and solve complex real-world problems; (b) find, evaluate, and use learning resources; (c) work cooperatively in teams; (d) demonstrate effective communication skills; and (e) use content knowledge and intellectual skills to become contin-ual learners (Duch, Groh, & Allen, 2001). The PBL process works as fol-lows: Students are presented with a problem (e.g., case, videotape, a research paper). In groups, they orga-nize their ideas and attempt to define the broad nature of the problem, pose ques-tions, and define and rank learning issues that they do and do not under-stand. Issues are assigned to each group and individuals within each group choose a particular issue to research and later teach to the other members of their groups. Students and the instructor identify resources to research learning issues. The students reconvene, integrat-ing their new knowledge into the con-text of the problem, and students
In the abbreviated PBL problem in Appendix C, students are first asked to think about what evidence they will need and where they can get it (using knowledge). Then they are asked to determine the objectives and proce-dures for auditing LTD (requires knowledge and comprehension). Next they must audit LTD using evidence given in part 3 and by following the procedures determined in part 2 (apply-ing learned knowledge and analyz(apply-ing). Finally, they must reach a conclusion about the fairness of LTD (evaluation). Thus, with this problem, students need to use knowledge, comprehension, application, and the higher order think-ing skills of analysis and evaluation. Teaching students to audit LTD using a PBL problem is challenging and moti-vating for the students because they must incorporate the higher order thinking skills mentioned and also sat-isfying for the instructor because the instructor can observe students devel-oping skills necessary for success in the accounting profession.
The effectiveness of PBL is enhanced if each assignment is graded and returned to groups in a timely man-ner with comments, questions, and
suggestions for improvement. The assignments should be reviewed and critiqued in a manner similar to the way a senior auditor would review a staff auditor’s documentation. That is, with questions about why certain meth-ods were used (or not used) to approach the problem and a list of “to do” points to improve the audit. If a mistake or error occurs frequently or by several groups, the problem and correct approach should be discussed in class. As groups gain more experi-ence with audit procedures, the audit documentation and work product in later assignments will show marked improvement for most groups.
Conclusion
In sum, PBL uses problems to intro-duce topics and to serve as a focal point for learning new material. Complex problems are used to motivate students to acquire, communicate, and integrate information. PBL can foster students to think critically and solve complex prob-lems, find and use learning resources, work in teams, use effective communi-cation skills, and become continual learners.
NOTE
Correspondence concerning this article should be addressed to James D. Hansen, PhD, CPA, Associate Professor of Accounting, Minnesota State University Moorhead, 1104 7th Ave. S, Moorhead, MN 56563.
Email: hansenjd@mnstate.edu
REFERENCES
Accounting Education Change Commission. (1990). Objectives of education for accoun-tants: Position statement number one. Issues in Accounting Education, 5(2) 307–312. American Accounting Association (AAA),
Bed-ford Committee, Committee on the Future Structure, Content, and Scope of Accounting Education (The Bedford Committee). (1986, Spring). Future accounting education: Prepar-ing for the expandPrepar-ing profession. Issues in Accounting Education,1(1), 168–195. American Institute of Certified Public
Accoun-tants (AICPA). (1999). The AICPA core compe-tency framework for entry into the accounting profession. Retrieved February 17, 2005, from http://www.aicpa.org/edu/corecomp.htm Boud, D., & Feletti, G. (1997). The challenge of
problem-based learning (2nd ed.). London: Kogan Page.
Duch, B. (2001). Writing problems for deeper understanding. In B. Duch, S. Groh, & D. Allen (Eds.),The power of problem-based learning
(pp. 47–53). Sterling, VA: Stylus Publishing. Duch, B., Groh, S., & Allen, D. (2001). Why
prob-lem-based learning? In B. Duch, S. Groh, & D. Allen (Eds.),The power of problem-based learn-ing(pp. 3–11). Sterling, VA: Stylus Publishing. Milne, M. J., & McConnell, P. J. (2001).
Problem-based learning: A pedagogy for using case material in accounting education. Accounting Education, 10(1) 61–82.
APPENDIX A
Example of a Level 1 End-of-Chapter Long-Term Debt (LTD) Problem
A company has borrowed $750,000 from a bank. To ascertain that the transaction was properly recorded, the auditor might perform the following procedures:
1. Review the loan agreement. 2. Confirm the loan with the bank.
3. Trace the cash received to the accounting records. 4. Review the footnotes for proper disclosure.
Required:Discuss the audit objectives accomplished by each of these procedures.
APPENDIX B
Example of a Level 2 Long-Term Debt (LTD) Problem
You have recently been put in charge of the upcoming audit of the company Big Moo. As part of your planning and preparation, you read the minutes of the Board of Directors’ meetings for the past year. The minutes for the July meeting indicated that the Board has approved an expansion of the warehouse to be financed with a loan of up to $750,000 from First Fargo Bank.
You will have one inexperienced staff member to help you with the audit and you feel that with proper supervision the staff member can audit the long-term debt (LTD) account. You will meet with this person later today to explain what will need to be done to audit LTD.
Required:Make a list of relevant objectives for auditing LTD and describe what pro-cedures will need to be performed to satisfy these objectives.
APPENDIX C
Example of a Level 3 Problem-Based Learning (PBL) Problem
Part 1.
You have been assigned to supervise the Big Moo audit. Big Moo Distributors (BMD) is a new and rapidly expanding company. The company's objectives are to locate and pur-chase excess and over-stocked inventories that are being liquidated at below-dealer prices. BMD operates a retail store with a warehouse in the rear of the building where it then resells the merchandise to individuals and retailers at 25–40% below wholesale prices. Management's main emphasis is on sales growth and moving inventory.
Based on your preliminary discussions with BMD officers, you are aware that the board of directors has approved a warehouse expansion project and authorized the pres-ident to negotiate with a local bank for a $750,000 loan to finance the expansion. A review of the company’s balance sheet revealed that Big Moo has recorded a $750,000 line of credit in the current liabilities section and that plant and equipment have increased by about $1 million over the previous year.
The audit has been in process for about 8 days and you are ready to begin the audit of long-term debt (LTD). Unfortunately the LTD portion of the audit program has been deleted from the word processing file. There are no hard copies because your firm has gone to the paperless audit, so you will need to reconstruct the LTD program.
1. Discuss the types of evidence that you will need to form an opinion about LTD. 2. How and where will you obtain this evidence?
Part 2.
1. What are the objectives for auditing LTD?
2. What procedures will you use to address those objectives?
Part 3.
You have asked for and received from the client the comparative balance sheets and income statements, the board of directors’ minutes, the client prepared LTD schedule, and the bank confirmation. Using these materials, audit LTD by following the proce-dures developed in part 2, document your work, and reach a conclusion about whether or not LTD is fairly stated and properly classified. Propose adjusting journal entries if necessary.
