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Some Ideas for Using Cases in the Classroom
SOME IDEAS FOR USING CASES IN THE CLASSROOM Pamela A. Smith ABSTRACT This chapter provides ideas about how to use cases in the classroom. The more ‘‘alive’’ the learning experience, the more the students are interested and involved in their own learning. Cases can provide the realism that can make a topic come alive. This chapter describes five mechanisms used in the development and implementation of cases in the classroom. These mechanisms help the students develop technical skills, professional conduct, critical thinking, and problem-solving skills. The five mechanisms are: use of practitioners, use of consultations, use of role-playing, use of peer evaluations, and use of grading sheets.
INTRODUCTION This chapter provides ideas about how to use cases in the classroom. The more ‘‘alive’’ the cases, the more the students are interested and involved in learning. This chapter describes five mechanisms used in the development and implementation of cases in the classroom. These mechanisms help the students develop technical skills, professional conduct, critical thinking, and problem-solving skills. The five mechanisms are: Advances in Accounting Advances in Accounting, Volume 21, 259–273 Copyright r 2005 by Elsevier Ltd. All rights of reproduction in any form reserved ISSN: 0882-6110/doi:10.1016/S0882-6110(05)21011-8
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1. Utilize practitioners to provide input in the development and evaluation of case content. Input from a practitioner will make the content current and relevant so the students can see the importance of the topic. By making the content more realistic, the students’ technical and problemsolving skills are strengthened. 2. Conduct formal consultations between the student teams and the professor as the students prepare for the case. The team consultations give the students guidance and direction, so they are less likely to feel lost and frustrated. The consultation mirrors the real world, where an expert is consulted for guidance. The students must conduct the consultation in a thoughtful, organized, and professional manner. 3. Require active role-playing so that the students empathize with alternate points of view. The use of role-playing encourages students’ creativity, so the case material is fun and entertaining as well as educational. Assign teams different roles for the same case so that the students can critically analyze differing perspectives. 4. Require team contracts and peer evaluation. The use of team contracts and peer evaluations based on that contract instills a sense of accountability and responsibility. Responsibility to the team helps develop the students’ professionalism. 5. Utilize faculty grading sheets. The development and use of grading sheets requires the faculty to think through expectations and produces grading consistency and reduced grade appeals. To some extent all these mechanisms have been used in both case development and execution, so the mechanisms are not new. However, this chapter describes a manner in which all items can be used and integrated in one case application. In the sections that follow each item is described in detail. The appendices provide an example of application of the mechanisms described using a Trueblood case on revenue recognition. Use of Practitioners Practitioners can provide input on issues that are current, unique, and interesting to the students. Through interaction with these in practice, the faculty member can ask about examples or scenarios that can be used to display a topic that is being covered in class. Input from a practitioner can be initiated at alumni events, professional meetings or casual associations. With the practitioner’s permission, the faculty member can sanitize the scenario and tailor it to the classroom learning objectives. Based on
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conversations with the practitioner, the faculty member can develop a case and the practitioner can review any documents created by the faculty to assure anonymity (if this is an issue) and completeness. This is a great way to get alumni involved with the department or college and to develop a case for use in the classroom. Practitioner developed cases are also available through the AICPA’s Professor/Practitioner Case Program or the Deloitte Foundation’s Trueblood cases. Appendix A presents the instructions for a Trueblood case on revenue recognition. It should be emphasized that the ‘‘case’’ does not have to be elaborate or involved. It could be a specific scenario to help exemplify an accounting issue. Some examples may include: estimation of an allowance account, implementation of an inventory valuation method (retail method or dollar value LIFO), estimation of warranty liability, factors involved in weighting debt versus equity financing, or revenue recognition issues. Often, the practitioner can provide insight as to how various constituents view one scenario from vastly different perspectives. This input is valuable when determining what roles to assign to students. For example, constituent groups affected by a financial accounting issue could include the company management, the auditor, the investor, and the Securities and Exchange Commission. When the students know that a practitioner is involved in the development of a case, and it is a real-world scenario, they often pay more attention to details and ask more questions. This is a great opportunity to work on unstructured problem-solving skills and help the students become comfortable with accepting that there is no ‘‘right’’ solution or answer. Practitioner involvement helps the students see the relevance of what they are learning and how that topic impacts various groups of individuals such as management, the consumer, government etc. In order to mirror real-world settings as much as possible, invite the practitioner to attend class on the day of the case presentations or discussion to provide feedback to the students. When the students know that there will be an outside observer (who is also familiar with the case), their attention to the case is heightened. I ask the practitioner to complete a grading sheet if the case is presented (see Use of Grading Sheets). I also provide the students with a copy of the practitioner’s grading sheet if it appears that the feedback would be valuable to the students. Use of Consultations Each team is required to set up a ‘‘consultation’’ with the professor to receive guidance and feedback as they prepare their case presentation. The
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professor plays the role of the consultant. The student team meets the consultant with issues identified, plausible solutions outlined, and questions that need to be answered from the perspective of their assigned role. A sign-up sheet for the consultation is distributed during the class. The objective of the consultation is to place the responsibility on the students to have fully researched the issue and to come to the meeting prepared. A portion of the team’s points is assigned to the consultation and the points earned are based on the level of preparedness and professionalism for the consultation appointment. The consultations are intended to mimic scenarios where a partner, vice president, or outside expert is consulted for guidance. The person consulted is in a position of authority and expertise (and often quite expensive). Therefore, the students need to be prepared, organized and focused on the information needed from the consultant. In order to optimize the faculty’s time, hold the consultation in a conference room in 30 to 45-minute increments back to back. The consultations will replace office hours for that week. All team members do not have to participate during the consultation. Often it will flow more smoothly if representative(s) of the team conduct the meeting on behalf of the team. However, all team members must attend the consultation; any absences will be detrimental to the grade of the absent individual. The assignment of who conducts the consultation could be part of the team contract (see Use of Team Contracts and Peer Evaluation).
Use of Role-Playing If the case is presented, assign each team to different roles. Some example roles are: company management (this can be split into various positions within the company), the consumer, the government, an oversight agency, etc. Assigning the student teams to a particular role helps them take ownership of a certain perspective. Often the case requires the teams to make recommendations. As each team completes their presentation in their assigned role, their recommendation is listed on the board. After all teams have presented their recommendation, the class can discuss the alternatives presented and try to come to a compromise solution. Appendix B provides a description of the roles used in the Trueblood revenue recognition case. In addition to presenting the case from the assigned perspective, the team must anticipate the counterarguments from the perspective of the roles assigned to the other teams. Each team must anticipate these counterarguments and how their team will handle those arguments. Part of the presentation
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grade is allocated to how well the team handles the negotiations toward a solution with the other teams. This part of the role-playing gives the students opportunity to think on their feet, present differing positions in a productive professional manner, and support their arguments with logic and reason. Before the presentations, discuss with each team (perhaps during the consultation) how they will present the material from their assigned perspective. Encourage creativity and give examples of ways to make their roleplaying more fun. Often with very little encouragement and just a few brief examples, the students take off on their own creative adventures. The students enjoy learning when they are having fun. An example role-play is a team that was assigned to represent the investors in Enron. The team had a panel of individuals at a front table and had names placed on table tents indicating that one of the students represented Warren Buffet. Among the audience were two students from the team with nametags labeling them Ma and Pa Kettle, 0.0001% ownership. Each person dressed and spoke in dialect appropriate for their role. During the presentation, the students brought up issues on financial statement disclosures from the sophisticated versus unsophisticated investor’s viewpoint. Other teams have used props such as golf clubs, music to develop the setting, sunglasses, cowboy hats, and paper shredders.
Use of Team Contracts and Peer Evaluations An area that is often troublesome is the allocation of work when students are assigned to teams.1 The use of team contracts and peer evaluations can help the students to take ownership of their role in the team and responsibility to the team. Knowing that there is a peer evaluation that is based on the team contract helps the team members recognize that they are accountable to the rest of the team. Appendix C contains an example team contract developed by a student team. The teams are instructed to develop and turn in a contract that outlines the responsibilities, deadlines, and deliverables of each team member. The contract must be agreed upon and signed by all members of the team and turned in. The contract can be modified because of unforeseen circumstances if everyone is in agreement. Each team member will submit his or her evaluation of the other team members’ performance based upon the contract. The evaluation is due on the next class day after the project due date. Evaluation of another’s performance is a serious and significant activity. If the evaluation is viewed to be cursory, the evaluator’s grade will be penalized.
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Appendix D contains an example peer evaluation form and Appendix E contains guidance for faculty evaluation. The three major areas that are most important to the success of any team environment are: attendance, attitude, and contributions. Attitude is important in any team setting. First, a team member should have a positive outlook and commitment to the project. This includes their overall disposition toward the project. Second, a team member should have a willingness to assume responsibilities. This involves the individual’s effort to take on responsibilities voluntarily and to help in areas he/she may not initially have been designated as responsible. Finally, a team member should have an ability to work with others. This includes the individual’s willingness to work with all members of the group, including willingness to listen and consider the ideas of others. It also involves the resolution of any conflicts in a mature and productive manner without interfering with the productivity of the overall work at hand. Attendance at planned team meetings and scheduled events includes being on time for and present during the entire meetings. Other attendance is responsiveness to emails and phone calls in a timely fashion. Often work will be partitioned off to subgroups. It is imperative that the individuals are available and responsive to communication with each other. Being part of a team goes beyond just showing up: each team member needs to make contributions. Contributions can be made during the team meetings including involvement in the discussion and decisions during these meetings. In addition, preparation for the meetings, including, the individual’s effort to understand the material and be prepared ahead of time to help the team progress to the completion of the project is a critical contribution. Finally, completion of the task assigned to the individual per team contract and evidence that effort was undertaken to complete their assigned task in a quality manner and in a timely fashion. Use of Grading Sheets Appendix F is an example faculty grading sheet for this case. The following are some of the benefits of using a grade sheet for cases, papers and projects: - Keeps the grading for content consistent from presentation to presentation (or paper to paper). - Forces the faculty member to think about what their expectations are with regard to the project.
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- Allocates a specific component to presentation, grammar, organization etc. Often it is easy to have a poorly written paper be down graded as unfair even though the content is there. - Significantly reduces student requests for re-grades. - Provides guidance for independent grader (e.g. grad student or practitioner). The point allocation is just to provide an example and can be modified based on the case content and classroom focus. The students are not provided the grade sheets before hand. Experience has shown that if the grade sheets are distributed before the assignment is turned in, the students’ focus on how to maximize points according to the grade sheet, rather than completing the assigned task.
CONCLUSION This chapter provides examples of ways to use cases in the classroom that promotes a more realistic setting for problem solving and student involvement. Any one of the mechanisms could be used alone or in conjunction with other tools for teaching cases. These mechanisms can be used with previously developed case materials or with materials that the instructor develops in conjunction with a practitioner. Most importantly, the cases do not have to be long and involved. There are pedagogical benefits from short content-focused cases that the instructor designs, based on conversations with practitioners. In many ways cases that are focused on current and emerging issues can be the most interesting. Even more so, using some of the mechanisms described in this chapter can make the learning experience fun.
NOTES 1. Note I did not say ‘‘groups.’’ I have totally purged ‘‘group’’ from my reference to the case assignments. The students are members of a ‘‘team,’’ including all of the connotations that go with the concept of a team. I want them to be in a team mentality and figuratively.
APPENDIX A. DIGISNAP Digisnap is a small digital camera manufacturer. Digisnap recently developed a high-end camera that allows customers to produce videos or pictures
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that can be distributed over the internet, in addition to producing traditional paper prints of pictures using existing photo processing laboratories. As a result, the customer avoids additional purchases of special printers and other equipment as with other digital cameras. These cases are a modification of Trueblood Cases provided by the Deloitte Foundation, 2002 and are used with permission of the Foundation. Solutions to the case are available through the Deloitte Foundation. Digisnap entered into an agreement on January 2 to sell digital cameras to Home Electronics (a reseller) for $400 per unit. Digisnap previously had not sold product to Home Electronics. As part of the agreement, Digisnap granted warrants to purchase 100,000 shares of Digisnap common stock to Home Electronics as a ‘‘slotting’’ arrangement in order to obtain shelf space at Home Electronics. The warrants will vest and become exercisable only if Home Electronics purchases more than 25,000 digital cameras in the 12month period ending on December 31. Based on the market analysis performed separately by both companies, it appears likely that Home Electronics will purchase more than the 25,000 digital cameras required for vesting in the warrants. While both companies expect that the number of units purchased by Home Electronics will exceed 25,000, Home Electronics has no commitment to purchase any minimum number of units. Further, the agreement indicates that Home Electronics can cancel the ‘‘slotting’’ arrangement at any time during the 12-month period without penalty. Accordingly, no measurement date for the warrants has occurred since the agreement does not contain a performance commitment. A measurement date for the warrants will be achieved when Home Electronics has purchased 25,000 digital cameras (the date the performance is complete). Digisnap performed a Black-Scholes analysis to value the warrants on the date of the agreement (January 2) and determined the fair value to be $10 per warrant (or $1,000,000). During the first quarter, Home Electronics purchased 10,000 digital cameras for $4,000,000. At the end of the first quarter, Digisnap performed another Black-Scholes analysis indicating that the fair value of the warrants had increased to $20 (or $2,000,000). Required Discuss the case facts from your assigned perspective. Discuss the reporting objectives from your perspective. Discuss the amount, timing and classification of the sales incentive that should be recognized. Support your position with the appropriate literature.
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Under what circumstances would you change your position on the accounting and reporting of this transaction?
APPENDIX B. ROLE ASSIGNMENTS The role assignments will be the company management, the auditor, and the SEC. Each role requires the group to research the accounting and reporting issues related to the transaction and present the accounting treatment you advocate. In order to make a compelling argument each group should have a thorough understanding of the position that may be advocated by the other roles to adequately dispel the validity of the counterarguments. Each group will have 20 min to present their position. After all presentations there will be a 20-min class discussion of the issues raised. Each group is required to set up a ‘‘consultation’’ to receive guidance and feedback. A sign-up sheet will be distributed in class. The objective is to place much of the responsibility on you to have fully researched the issue and to come to the meeting prepared with questions for guidance. This mimics the real world where the time of upper management or outside consultants is limited and valuable. I strongly recommend that you be prepared for your consultation, as it is the major guidance you will receive. All group members must attend the consultation; any absences will be detrimental to the grade of the absent individual. Group Roles The management group will be responsible for explaining the details of the revenue transaction to the rest of the class and present their preferred accounting treatment supported by the appropriate authoritative literature. This group will explain management’s reporting objectives and why the accounting treatment is critical to obtain those objectives. The auditing group will represent a firm that was just sanctioned by the SEC in the audit of another client that was recognizing revenue aggressively. This group will explain how the role of the auditor has changed in the current environment and how that change has affected the firm’s stance on this issue. The auditors will present their preferred accounting treatment supported by the appropriate literature. The SEC enforcement division has been closely scrutinizing the clients of the auditing firm ever since the sanction was levied. This group will consult GAAP and the SEC literature as guidance to support their position of the accounting treatment that is acceptable by the SEC.
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Class Discussion After the role-playing we will hold an open discussion of the issues presented by the groups. Be prepared to discuss the following:
the revenue recognition issues raised during the presentations, principles versus rules-based accounting, conflict resolution in today’s environment, ethical issues encountered as you tried to support your position, the lifelong learning skills needed to complete a research assignment.
APPENDIX C. EXAMPLE TEAM CONTRACT General Group Member Responsibilities: 1. Attend every group session, be on time, and remain throughout the session. If a member cannot be present, call or e-mail the other group members so your absence will be known ahead of time. 2. Participate actively in discussions related to our group’s recommendation for the case we are presenting. Encourage discussion and participation by all members of the group. Consider the merits of every member’s contributions, oral or written. 3. Respect and consider the suggestions presented by each group member. 4. Maintain the confidentiality of any communications of a personal nature presented during the group meeting time. 5. Assist in the development of ideas, facts, and research needed to develop an informed recommendation concerning the proper revenue recognition treatment for our particular case. 6. Research, document, and disseminate to the other group members the relevant research issues that are discovered in independent research. 7. Incorporate all the relevant and necessary research into a thorough presentation of the case. The final presentation will include a defensible, logical and supportable decision on how to properly record revenue recognition in our case. 8. Complete all the above-mentioned in a professional and ethical manner, adhering to the code of ethical conduct. Signatures _____________
Date _____________
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Individual Contract for Research Coordinator I, the undersigned, _________, being of sound mind and body, do declare to take on the responsibility of being the Research Coordinator for the Revenue Recognition Module, which is one of the modules in the ____________ course, under the supervision of Dr. ______________. My duties will specifically include, but may not be limited to, the following: 1. I will be primarily responsible for overseeing the research necessary to develop our final revenue recognition recommendation for the case assigned. 2. I will compile, compress, and combine information, ideas, research, and standards into a defensible and logical recommendation to the class on (insert date) based on all the information discussed and agreed upon as a group. 3. I will take it upon myself to research, document, and disseminate to the other group members the relevant current accounting literature and press releases that are essential to reaching a supportable recommendation. 4. I will make sure a group consensus is reached based on all relevant financial accounting research before finalizing our recommendation. 5. I will do my best to coordinate, prompt and lead discussions related to our group’s recommendation for the case we are presenting. 6. All the preceding I myself will complete in a professional and ethical manner, adhering to my own, as well as this University’s, code of ethical conduct. Signed _____________
Date _____________
Contract for the Presentation Coordinator I, the undersigned, __________, being of sound mind and body, do declare to take on the responsibility of being the Presentation Coordinator for the Revenue Recognition Module, which is one of the modules in the _____________ course, under the supervision of Dr. _________. My duties will specifically include, but may not be limited to, the following: 1. I will be primarily responsible for synthesizing all the group’s research and recommendations into a clear, complete and appealing PowerPoint format.
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2. I will allow adequate time for other group members to comment and proofread the PowerPoint presentation, and make timely revisions as necessary. 3. I will come to class prepared with the above-mentioned PowerPoint presentations on a workable computer disk on ðinsert dateÞ: 4. I will arrange for a practice presentation session as deemed necessary by a consensus of the members of the group. 5. I will research the relevant SEC rules and regulations regarding proper revenue recognition treatment for our case. 6. All the preceding I myself will complete in a professional and ethical manner, adhering to my own, as well as this University’s, code of ethical conduct. Signed _____________
Date _____________
Contract for the Assistant Researcher I, the undersigned, _________, being of sound mind and body, do declare to take on the responsibility of being the Assistant Researcher for the Revenue Recognition Module, which is one of the modules in ______________ course, under the supervision of Dr. ____________. My duties will specifically include, but may not be limited to, the following: 1. I will assist the research coordinator in the research and preparation of the recommendation for proper revenue recognition. 2. I will research the relevant professional financing accounting practices and rules using up-to-date information and proper accounting sources. 3. I will submit my writings and correspondence to the research and presentation coordinators in a timely manner. 4. I will participate in discussion and contribute research findings and knowledge to other members in order to reach a common understanding of the accounting rules. 5. I will assist the presentation coordinator in the preparation and presentation of the PowerPoint on ðinsert dateÞ: 6. All the preceding I myself will complete in a professional and ethical manner, adhering to my own, as well as this University’s, code of ethical conduct. Signed _____________
Date _____________
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APPENDIX D. PEER EVALUATION OF TEAM MEMBERS (EXAMPLE FORM) Area (Points possible) Attitude: Positive outlook (.5) Willingness to assume responsibilities (1.0) Ability to work with others (1.0)
Attendance: To planned meetings (1.0) To communications (.5)
Contributions: Involvement during meetings (2.0) Preparation for meetings (2.0) Completion of assigned tasks (2.0)
Total points
(10.0 possible)
Team Member A
Team Member B
Team Myself Member C
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APPENDIX E. PEER EVALUATION OF TEAM MEMBERS (FACULTY GUIDANCE) Below is an example grid used to determine the point allocation to the team members. Student evaluators are guaranteed anonymity. Therefore, the student knows only the average peer score assigned to them, not the individual scores. If a student’s score is reduced because they did not perform as an evaluator, that student is informed of the penalty applied (e.g. student ‘‘C’’).
Points Allocated by →
A
B
C
D
E
Average
10
10
10
9.68
9
7
8.72
8
8.23 - 1.0 = 7.23
Points Allocated to ↓ A
9.5
B
8.3
9.3
C
8.6
8.3
10
D
10
9.1
10
10
E
9.4
9.1
10
10
9.82 10
Student ‘‘A’’ allocated points to students A through E at 9.5, 8.3, 8.6, 10, and 9.4 respectively. Student ‘‘A’’ received an average score of 9.68. The student’s evaluation of himself or herself may be included or excluded from the average scores. In this example, the student’s evaluation of himself or herself is included in the average score. There may be situations, where you may choose to base the students average peer score excluding their own score.
Student ‘‘C’’ gave everyone a 10. However, the other team members gave this student one of the lowest scores. This student gave every team member a 10 with no written reasons for the allocation. This student self score was not included in the average (because his point allocation was not deemed valid) and was penalized one point because the student’s evaluation showed no discretion or thought to the evaluation process. Written comments are provided with each student’s point allocation of their peers. Based on a 10 point scale, this group had 3 A’s, one B and one C. I have found this system helps students objectively and thoughtfully to evaluate their own and others contributions to the team.
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APPENDIX F. FACULTY GRADE SHEET (EXAMPLE – 100 POINT ALLOCATION) Consultation 10___11___12___13___14___15 •
Issues identified: How to treat, how to value, and when to recognize cost of warrants Solutions proposed: Organization:
• •
Presentation Clear identification of issues • •
15___16___17___18___19___20
SFAC #5 Slotting fees
Thorough analysis of issues 21___22___23___24___25___26___27___28___29___30 •
EITF 96-18 Measure at FV of incentive or warrant – commitment date is measurement date EITF 01-9 Systematically reduce revenue as cash rebate is earned EITF 84-8 Date of agreement is not appropriate measurement date
• •
Recommendation and support •
9___10___11___12___13___14___15
Ability to provide counterarguments and respond to challenges and questions
Organization, flow, and understandability 5___6___7___8___9___10 •
Ability to convey understanding of the material in a clear, concise, and succinct manner.
Individual Peer Score Total score
5___6___7___8___9___10 ______
INTRODUCTION This chapter provides ideas about how to use cases in the classroom. The more ‘‘alive’’ the cases, the more the students are interested and involved in learning. This chapter describes five mechanisms used in the development and implementation of cases in the classroom. These mechanisms help the students develop technical skills, professional conduct, critical thinking, and problem-solving skills. The five mechanisms are: Advances in Accounting Advances in Accounting, Volume 21, 259–273 Copyright r 2005 by Elsevier Ltd. All rights of reproduction in any form reserved ISSN: 0882-6110/doi:10.1016/S0882-6110(05)21011-8
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1. Utilize practitioners to provide input in the development and evaluation of case content. Input from a practitioner will make the content current and relevant so the students can see the importance of the topic. By making the content more realistic, the students’ technical and problemsolving skills are strengthened. 2. Conduct formal consultations between the student teams and the professor as the students prepare for the case. The team consultations give the students guidance and direction, so they are less likely to feel lost and frustrated. The consultation mirrors the real world, where an expert is consulted for guidance. The students must conduct the consultation in a thoughtful, organized, and professional manner. 3. Require active role-playing so that the students empathize with alternate points of view. The use of role-playing encourages students’ creativity, so the case material is fun and entertaining as well as educational. Assign teams different roles for the same case so that the students can critically analyze differing perspectives. 4. Require team contracts and peer evaluation. The use of team contracts and peer evaluations based on that contract instills a sense of accountability and responsibility. Responsibility to the team helps develop the students’ professionalism. 5. Utilize faculty grading sheets. The development and use of grading sheets requires the faculty to think through expectations and produces grading consistency and reduced grade appeals. To some extent all these mechanisms have been used in both case development and execution, so the mechanisms are not new. However, this chapter describes a manner in which all items can be used and integrated in one case application. In the sections that follow each item is described in detail. The appendices provide an example of application of the mechanisms described using a Trueblood case on revenue recognition. Use of Practitioners Practitioners can provide input on issues that are current, unique, and interesting to the students. Through interaction with these in practice, the faculty member can ask about examples or scenarios that can be used to display a topic that is being covered in class. Input from a practitioner can be initiated at alumni events, professional meetings or casual associations. With the practitioner’s permission, the faculty member can sanitize the scenario and tailor it to the classroom learning objectives. Based on
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conversations with the practitioner, the faculty member can develop a case and the practitioner can review any documents created by the faculty to assure anonymity (if this is an issue) and completeness. This is a great way to get alumni involved with the department or college and to develop a case for use in the classroom. Practitioner developed cases are also available through the AICPA’s Professor/Practitioner Case Program or the Deloitte Foundation’s Trueblood cases. Appendix A presents the instructions for a Trueblood case on revenue recognition. It should be emphasized that the ‘‘case’’ does not have to be elaborate or involved. It could be a specific scenario to help exemplify an accounting issue. Some examples may include: estimation of an allowance account, implementation of an inventory valuation method (retail method or dollar value LIFO), estimation of warranty liability, factors involved in weighting debt versus equity financing, or revenue recognition issues. Often, the practitioner can provide insight as to how various constituents view one scenario from vastly different perspectives. This input is valuable when determining what roles to assign to students. For example, constituent groups affected by a financial accounting issue could include the company management, the auditor, the investor, and the Securities and Exchange Commission. When the students know that a practitioner is involved in the development of a case, and it is a real-world scenario, they often pay more attention to details and ask more questions. This is a great opportunity to work on unstructured problem-solving skills and help the students become comfortable with accepting that there is no ‘‘right’’ solution or answer. Practitioner involvement helps the students see the relevance of what they are learning and how that topic impacts various groups of individuals such as management, the consumer, government etc. In order to mirror real-world settings as much as possible, invite the practitioner to attend class on the day of the case presentations or discussion to provide feedback to the students. When the students know that there will be an outside observer (who is also familiar with the case), their attention to the case is heightened. I ask the practitioner to complete a grading sheet if the case is presented (see Use of Grading Sheets). I also provide the students with a copy of the practitioner’s grading sheet if it appears that the feedback would be valuable to the students. Use of Consultations Each team is required to set up a ‘‘consultation’’ with the professor to receive guidance and feedback as they prepare their case presentation. The
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professor plays the role of the consultant. The student team meets the consultant with issues identified, plausible solutions outlined, and questions that need to be answered from the perspective of their assigned role. A sign-up sheet for the consultation is distributed during the class. The objective of the consultation is to place the responsibility on the students to have fully researched the issue and to come to the meeting prepared. A portion of the team’s points is assigned to the consultation and the points earned are based on the level of preparedness and professionalism for the consultation appointment. The consultations are intended to mimic scenarios where a partner, vice president, or outside expert is consulted for guidance. The person consulted is in a position of authority and expertise (and often quite expensive). Therefore, the students need to be prepared, organized and focused on the information needed from the consultant. In order to optimize the faculty’s time, hold the consultation in a conference room in 30 to 45-minute increments back to back. The consultations will replace office hours for that week. All team members do not have to participate during the consultation. Often it will flow more smoothly if representative(s) of the team conduct the meeting on behalf of the team. However, all team members must attend the consultation; any absences will be detrimental to the grade of the absent individual. The assignment of who conducts the consultation could be part of the team contract (see Use of Team Contracts and Peer Evaluation).
Use of Role-Playing If the case is presented, assign each team to different roles. Some example roles are: company management (this can be split into various positions within the company), the consumer, the government, an oversight agency, etc. Assigning the student teams to a particular role helps them take ownership of a certain perspective. Often the case requires the teams to make recommendations. As each team completes their presentation in their assigned role, their recommendation is listed on the board. After all teams have presented their recommendation, the class can discuss the alternatives presented and try to come to a compromise solution. Appendix B provides a description of the roles used in the Trueblood revenue recognition case. In addition to presenting the case from the assigned perspective, the team must anticipate the counterarguments from the perspective of the roles assigned to the other teams. Each team must anticipate these counterarguments and how their team will handle those arguments. Part of the presentation
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grade is allocated to how well the team handles the negotiations toward a solution with the other teams. This part of the role-playing gives the students opportunity to think on their feet, present differing positions in a productive professional manner, and support their arguments with logic and reason. Before the presentations, discuss with each team (perhaps during the consultation) how they will present the material from their assigned perspective. Encourage creativity and give examples of ways to make their roleplaying more fun. Often with very little encouragement and just a few brief examples, the students take off on their own creative adventures. The students enjoy learning when they are having fun. An example role-play is a team that was assigned to represent the investors in Enron. The team had a panel of individuals at a front table and had names placed on table tents indicating that one of the students represented Warren Buffet. Among the audience were two students from the team with nametags labeling them Ma and Pa Kettle, 0.0001% ownership. Each person dressed and spoke in dialect appropriate for their role. During the presentation, the students brought up issues on financial statement disclosures from the sophisticated versus unsophisticated investor’s viewpoint. Other teams have used props such as golf clubs, music to develop the setting, sunglasses, cowboy hats, and paper shredders.
Use of Team Contracts and Peer Evaluations An area that is often troublesome is the allocation of work when students are assigned to teams.1 The use of team contracts and peer evaluations can help the students to take ownership of their role in the team and responsibility to the team. Knowing that there is a peer evaluation that is based on the team contract helps the team members recognize that they are accountable to the rest of the team. Appendix C contains an example team contract developed by a student team. The teams are instructed to develop and turn in a contract that outlines the responsibilities, deadlines, and deliverables of each team member. The contract must be agreed upon and signed by all members of the team and turned in. The contract can be modified because of unforeseen circumstances if everyone is in agreement. Each team member will submit his or her evaluation of the other team members’ performance based upon the contract. The evaluation is due on the next class day after the project due date. Evaluation of another’s performance is a serious and significant activity. If the evaluation is viewed to be cursory, the evaluator’s grade will be penalized.
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Appendix D contains an example peer evaluation form and Appendix E contains guidance for faculty evaluation. The three major areas that are most important to the success of any team environment are: attendance, attitude, and contributions. Attitude is important in any team setting. First, a team member should have a positive outlook and commitment to the project. This includes their overall disposition toward the project. Second, a team member should have a willingness to assume responsibilities. This involves the individual’s effort to take on responsibilities voluntarily and to help in areas he/she may not initially have been designated as responsible. Finally, a team member should have an ability to work with others. This includes the individual’s willingness to work with all members of the group, including willingness to listen and consider the ideas of others. It also involves the resolution of any conflicts in a mature and productive manner without interfering with the productivity of the overall work at hand. Attendance at planned team meetings and scheduled events includes being on time for and present during the entire meetings. Other attendance is responsiveness to emails and phone calls in a timely fashion. Often work will be partitioned off to subgroups. It is imperative that the individuals are available and responsive to communication with each other. Being part of a team goes beyond just showing up: each team member needs to make contributions. Contributions can be made during the team meetings including involvement in the discussion and decisions during these meetings. In addition, preparation for the meetings, including, the individual’s effort to understand the material and be prepared ahead of time to help the team progress to the completion of the project is a critical contribution. Finally, completion of the task assigned to the individual per team contract and evidence that effort was undertaken to complete their assigned task in a quality manner and in a timely fashion. Use of Grading Sheets Appendix F is an example faculty grading sheet for this case. The following are some of the benefits of using a grade sheet for cases, papers and projects: - Keeps the grading for content consistent from presentation to presentation (or paper to paper). - Forces the faculty member to think about what their expectations are with regard to the project.
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- Allocates a specific component to presentation, grammar, organization etc. Often it is easy to have a poorly written paper be down graded as unfair even though the content is there. - Significantly reduces student requests for re-grades. - Provides guidance for independent grader (e.g. grad student or practitioner). The point allocation is just to provide an example and can be modified based on the case content and classroom focus. The students are not provided the grade sheets before hand. Experience has shown that if the grade sheets are distributed before the assignment is turned in, the students’ focus on how to maximize points according to the grade sheet, rather than completing the assigned task.
CONCLUSION This chapter provides examples of ways to use cases in the classroom that promotes a more realistic setting for problem solving and student involvement. Any one of the mechanisms could be used alone or in conjunction with other tools for teaching cases. These mechanisms can be used with previously developed case materials or with materials that the instructor develops in conjunction with a practitioner. Most importantly, the cases do not have to be long and involved. There are pedagogical benefits from short content-focused cases that the instructor designs, based on conversations with practitioners. In many ways cases that are focused on current and emerging issues can be the most interesting. Even more so, using some of the mechanisms described in this chapter can make the learning experience fun.
NOTES 1. Note I did not say ‘‘groups.’’ I have totally purged ‘‘group’’ from my reference to the case assignments. The students are members of a ‘‘team,’’ including all of the connotations that go with the concept of a team. I want them to be in a team mentality and figuratively.
APPENDIX A. DIGISNAP Digisnap is a small digital camera manufacturer. Digisnap recently developed a high-end camera that allows customers to produce videos or pictures
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that can be distributed over the internet, in addition to producing traditional paper prints of pictures using existing photo processing laboratories. As a result, the customer avoids additional purchases of special printers and other equipment as with other digital cameras. These cases are a modification of Trueblood Cases provided by the Deloitte Foundation, 2002 and are used with permission of the Foundation. Solutions to the case are available through the Deloitte Foundation. Digisnap entered into an agreement on January 2 to sell digital cameras to Home Electronics (a reseller) for $400 per unit. Digisnap previously had not sold product to Home Electronics. As part of the agreement, Digisnap granted warrants to purchase 100,000 shares of Digisnap common stock to Home Electronics as a ‘‘slotting’’ arrangement in order to obtain shelf space at Home Electronics. The warrants will vest and become exercisable only if Home Electronics purchases more than 25,000 digital cameras in the 12month period ending on December 31. Based on the market analysis performed separately by both companies, it appears likely that Home Electronics will purchase more than the 25,000 digital cameras required for vesting in the warrants. While both companies expect that the number of units purchased by Home Electronics will exceed 25,000, Home Electronics has no commitment to purchase any minimum number of units. Further, the agreement indicates that Home Electronics can cancel the ‘‘slotting’’ arrangement at any time during the 12-month period without penalty. Accordingly, no measurement date for the warrants has occurred since the agreement does not contain a performance commitment. A measurement date for the warrants will be achieved when Home Electronics has purchased 25,000 digital cameras (the date the performance is complete). Digisnap performed a Black-Scholes analysis to value the warrants on the date of the agreement (January 2) and determined the fair value to be $10 per warrant (or $1,000,000). During the first quarter, Home Electronics purchased 10,000 digital cameras for $4,000,000. At the end of the first quarter, Digisnap performed another Black-Scholes analysis indicating that the fair value of the warrants had increased to $20 (or $2,000,000). Required Discuss the case facts from your assigned perspective. Discuss the reporting objectives from your perspective. Discuss the amount, timing and classification of the sales incentive that should be recognized. Support your position with the appropriate literature.
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Under what circumstances would you change your position on the accounting and reporting of this transaction?
APPENDIX B. ROLE ASSIGNMENTS The role assignments will be the company management, the auditor, and the SEC. Each role requires the group to research the accounting and reporting issues related to the transaction and present the accounting treatment you advocate. In order to make a compelling argument each group should have a thorough understanding of the position that may be advocated by the other roles to adequately dispel the validity of the counterarguments. Each group will have 20 min to present their position. After all presentations there will be a 20-min class discussion of the issues raised. Each group is required to set up a ‘‘consultation’’ to receive guidance and feedback. A sign-up sheet will be distributed in class. The objective is to place much of the responsibility on you to have fully researched the issue and to come to the meeting prepared with questions for guidance. This mimics the real world where the time of upper management or outside consultants is limited and valuable. I strongly recommend that you be prepared for your consultation, as it is the major guidance you will receive. All group members must attend the consultation; any absences will be detrimental to the grade of the absent individual. Group Roles The management group will be responsible for explaining the details of the revenue transaction to the rest of the class and present their preferred accounting treatment supported by the appropriate authoritative literature. This group will explain management’s reporting objectives and why the accounting treatment is critical to obtain those objectives. The auditing group will represent a firm that was just sanctioned by the SEC in the audit of another client that was recognizing revenue aggressively. This group will explain how the role of the auditor has changed in the current environment and how that change has affected the firm’s stance on this issue. The auditors will present their preferred accounting treatment supported by the appropriate literature. The SEC enforcement division has been closely scrutinizing the clients of the auditing firm ever since the sanction was levied. This group will consult GAAP and the SEC literature as guidance to support their position of the accounting treatment that is acceptable by the SEC.
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Class Discussion After the role-playing we will hold an open discussion of the issues presented by the groups. Be prepared to discuss the following:
the revenue recognition issues raised during the presentations, principles versus rules-based accounting, conflict resolution in today’s environment, ethical issues encountered as you tried to support your position, the lifelong learning skills needed to complete a research assignment.
APPENDIX C. EXAMPLE TEAM CONTRACT General Group Member Responsibilities: 1. Attend every group session, be on time, and remain throughout the session. If a member cannot be present, call or e-mail the other group members so your absence will be known ahead of time. 2. Participate actively in discussions related to our group’s recommendation for the case we are presenting. Encourage discussion and participation by all members of the group. Consider the merits of every member’s contributions, oral or written. 3. Respect and consider the suggestions presented by each group member. 4. Maintain the confidentiality of any communications of a personal nature presented during the group meeting time. 5. Assist in the development of ideas, facts, and research needed to develop an informed recommendation concerning the proper revenue recognition treatment for our particular case. 6. Research, document, and disseminate to the other group members the relevant research issues that are discovered in independent research. 7. Incorporate all the relevant and necessary research into a thorough presentation of the case. The final presentation will include a defensible, logical and supportable decision on how to properly record revenue recognition in our case. 8. Complete all the above-mentioned in a professional and ethical manner, adhering to the code of ethical conduct. Signatures _____________
Date _____________
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Individual Contract for Research Coordinator I, the undersigned, _________, being of sound mind and body, do declare to take on the responsibility of being the Research Coordinator for the Revenue Recognition Module, which is one of the modules in the ____________ course, under the supervision of Dr. ______________. My duties will specifically include, but may not be limited to, the following: 1. I will be primarily responsible for overseeing the research necessary to develop our final revenue recognition recommendation for the case assigned. 2. I will compile, compress, and combine information, ideas, research, and standards into a defensible and logical recommendation to the class on (insert date) based on all the information discussed and agreed upon as a group. 3. I will take it upon myself to research, document, and disseminate to the other group members the relevant current accounting literature and press releases that are essential to reaching a supportable recommendation. 4. I will make sure a group consensus is reached based on all relevant financial accounting research before finalizing our recommendation. 5. I will do my best to coordinate, prompt and lead discussions related to our group’s recommendation for the case we are presenting. 6. All the preceding I myself will complete in a professional and ethical manner, adhering to my own, as well as this University’s, code of ethical conduct. Signed _____________
Date _____________
Contract for the Presentation Coordinator I, the undersigned, __________, being of sound mind and body, do declare to take on the responsibility of being the Presentation Coordinator for the Revenue Recognition Module, which is one of the modules in the _____________ course, under the supervision of Dr. _________. My duties will specifically include, but may not be limited to, the following: 1. I will be primarily responsible for synthesizing all the group’s research and recommendations into a clear, complete and appealing PowerPoint format.
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2. I will allow adequate time for other group members to comment and proofread the PowerPoint presentation, and make timely revisions as necessary. 3. I will come to class prepared with the above-mentioned PowerPoint presentations on a workable computer disk on ðinsert dateÞ: 4. I will arrange for a practice presentation session as deemed necessary by a consensus of the members of the group. 5. I will research the relevant SEC rules and regulations regarding proper revenue recognition treatment for our case. 6. All the preceding I myself will complete in a professional and ethical manner, adhering to my own, as well as this University’s, code of ethical conduct. Signed _____________
Date _____________
Contract for the Assistant Researcher I, the undersigned, _________, being of sound mind and body, do declare to take on the responsibility of being the Assistant Researcher for the Revenue Recognition Module, which is one of the modules in ______________ course, under the supervision of Dr. ____________. My duties will specifically include, but may not be limited to, the following: 1. I will assist the research coordinator in the research and preparation of the recommendation for proper revenue recognition. 2. I will research the relevant professional financing accounting practices and rules using up-to-date information and proper accounting sources. 3. I will submit my writings and correspondence to the research and presentation coordinators in a timely manner. 4. I will participate in discussion and contribute research findings and knowledge to other members in order to reach a common understanding of the accounting rules. 5. I will assist the presentation coordinator in the preparation and presentation of the PowerPoint on ðinsert dateÞ: 6. All the preceding I myself will complete in a professional and ethical manner, adhering to my own, as well as this University’s, code of ethical conduct. Signed _____________
Date _____________
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APPENDIX D. PEER EVALUATION OF TEAM MEMBERS (EXAMPLE FORM) Area (Points possible) Attitude: Positive outlook (.5) Willingness to assume responsibilities (1.0) Ability to work with others (1.0)
Attendance: To planned meetings (1.0) To communications (.5)
Contributions: Involvement during meetings (2.0) Preparation for meetings (2.0) Completion of assigned tasks (2.0)
Total points
(10.0 possible)
Team Member A
Team Member B
Team Myself Member C
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APPENDIX E. PEER EVALUATION OF TEAM MEMBERS (FACULTY GUIDANCE) Below is an example grid used to determine the point allocation to the team members. Student evaluators are guaranteed anonymity. Therefore, the student knows only the average peer score assigned to them, not the individual scores. If a student’s score is reduced because they did not perform as an evaluator, that student is informed of the penalty applied (e.g. student ‘‘C’’).
Points Allocated by →
A
B
C
D
E
Average
10
10
10
9.68
9
7
8.72
8
8.23 - 1.0 = 7.23
Points Allocated to ↓ A
9.5
B
8.3
9.3
C
8.6
8.3
10
D
10
9.1
10
10
E
9.4
9.1
10
10
9.82 10
Student ‘‘A’’ allocated points to students A through E at 9.5, 8.3, 8.6, 10, and 9.4 respectively. Student ‘‘A’’ received an average score of 9.68. The student’s evaluation of himself or herself may be included or excluded from the average scores. In this example, the student’s evaluation of himself or herself is included in the average score. There may be situations, where you may choose to base the students average peer score excluding their own score.
Student ‘‘C’’ gave everyone a 10. However, the other team members gave this student one of the lowest scores. This student gave every team member a 10 with no written reasons for the allocation. This student self score was not included in the average (because his point allocation was not deemed valid) and was penalized one point because the student’s evaluation showed no discretion or thought to the evaluation process. Written comments are provided with each student’s point allocation of their peers. Based on a 10 point scale, this group had 3 A’s, one B and one C. I have found this system helps students objectively and thoughtfully to evaluate their own and others contributions to the team.
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APPENDIX F. FACULTY GRADE SHEET (EXAMPLE – 100 POINT ALLOCATION) Consultation 10___11___12___13___14___15 •
Issues identified: How to treat, how to value, and when to recognize cost of warrants Solutions proposed: Organization:
• •
Presentation Clear identification of issues • •
15___16___17___18___19___20
SFAC #5 Slotting fees
Thorough analysis of issues 21___22___23___24___25___26___27___28___29___30 •
EITF 96-18 Measure at FV of incentive or warrant – commitment date is measurement date EITF 01-9 Systematically reduce revenue as cash rebate is earned EITF 84-8 Date of agreement is not appropriate measurement date
• •
Recommendation and support •
9___10___11___12___13___14___15
Ability to provide counterarguments and respond to challenges and questions
Organization, flow, and understandability 5___6___7___8___9___10 •
Ability to convey understanding of the material in a clear, concise, and succinct manner.
Individual Peer Score Total score
5___6___7___8___9___10 ______