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The Accounting Cycle
Students Then and Now

January 2009Compared with the students in the 1970s, today's accounting students are uneducated and unfit for a college education.

I have been teaching full time for over thirty years. If you toss in my apprenticeship teaching as a graduate student, I have taught for almost thirty-five years. During that span of time, one sees many, many students, and it amazes me how different they have been over time, and the inequality continues to grow. Compared with the students in the 1970s, today’s students are uneducated and unfit for a college education.

Before proceeding, let me enunciate two premises. First, I do not think there is any significant difference between the two groups in terms of native, raw intelligence. Instead, the distinction between yesterday’s and today’s students when they first set foot on college campuses rests in their educational backgrounds, analytical thinking, quantitative skills, reading abilities, willingness to work, and their attitudes concerning the educational process. In short, they differ in terms of their readiness for college. Second, I am focusing on the average student who majors in accounting. Both groups arise from a distribution of students. The lower tail of yesteryear’s population had some weak students, and the upper tail of the present-day population has some very strong students; however, when one focuses on the means of these two distributions, he or she finds a huge gap.

To begin, today’s average accounting major cannot perform what used to be Algebra I and II in high school. Students cannot solve simultaneous equations. Students have difficulty with present value computations, not to mention formula derivations. Students even have difficulty employing the high-low method to derive a cost function, something that merely requires one to estimate a straight line from two points.

I would like to discuss in class the partial derivative of a present value formula to ascertain the impact of changes in interest rates, but that has become a fruitless enterprise. Even if students had a course in calculus, the exams probably had multiple choice questions so students guessed their way through the course, they don’t remember what they learned, and whatever they learned was mechanical and superficial.

Thirty years ago I required my Intermediate Accounting students to derive the future and present value formulas, including the present value of a perpetuity, which requires a knowledge of limits. I gave up on that endeavor over a decade ago when I observed that the average student had no idea what I was talking about.

Worse, they didn’t care.

Today’s students cannot read at what used to be a tenth-grade level. I learned this dramatically when I wrote a couple of textbooks in the 1990s. Editors at both publishing houses insisted that I rewrite my materials so today’s student could read it. I was forbidden to employ large or “fancy” words and had to simplify the grammar. For example, both editors told me never to compose a sentence with a subordinate clause because it was too complex for students to understand.

Today’s students cannot read critically. For example, I can assign an SEC litigation release for class, but students cannot read it for detail, nor can they discern the key points of the document. If I really want them to perceive anything, I have to tell them. Of course, that doesn’t work in the long run because I won’t be there in the future to help them read SEC essays.

I shouldn’t be surprised by the weakness in reading; after all, many students do not buy their text books. Students attend some of the lectures and try to get by on the class notes or copies of past exams. While some faculty employ the same exam year after year, woe to those who don’t, for the cacophony resounds throughout the campus.

Worst of all is attitude. Yesterday’s student was willing to work; today’s student is not. Past students thought of education as a privilege; current students view it as an entitlement. Earlier students took responsibility for their mistakes; contemporary students call mom and dad, who in turn call their attorneys. Previously, it was honorable to obtain a B and at least acceptable to receive a C, especially with the harder classes. Nowadays, students want at least a B for signing up for class and an A with any effort expended on the course, regardless of knowledge displayed in the classroom.

There is one item in which twenty-first century students excel—their self-esteem. I guess K-12 teachers have thought it more important to bolster self-esteem than to teach the three R’s, but the consequences of this policy are disastrous. During the past decade, I have encountered too many students who thought they obtained at least (say) an 85 on an exam only to be shocked that the grade was a 35—or lower. Ironically, the actual grade does nothing to deter their confidence or self-esteem: they claim that the score was my fault.

Why are we in this mess?  K-12 explains a lot; we face a national disgrace in what takes place during these years. I still remember my daughter’s  science teacher stating that the sun revolved around the earth. And that is only one of several follies we encountered with the modern K-12 ensemble.

The decline in the family also explains a lot. A child learns best in a stable environment, which apparently is in recession. In addition, when parents don’t require their children to learn school material and when parents don’t support teachers and principals (when these educators aren’t doing stupid things), their children don’t form good study habits and they learn to disrespect teachers. Also contributing to the problem are lack of adequate supervision, increased use of drugs, increase in television viewing, and introduction of electronic games.

Furthermore, there has been a cultural shift in how Americans view education. We used to view education as a learning process that liberated the individual and created mature adults. Today society tends to view education as a commodity to purchase and list on a résumé, not caring whether any learning occurs.

Universities share part of the responsibility. We accept some students who should not be admitted to a university. We employ teaching evaluations, so students can punish demanding faculty. We have administrators who are scared of lawyers, who kowtow to donors and potential donors, and who tell faculty that the grades they administer are too low.

So what should we do to correct this problem?  Undoubtedly, we shouldn’t punish the students because they didn’t create this unsavory condition. Their parent’s generation created this problem, so the parents should figure out a solution. Indeed, the American society must halt the brain drain that takes place in our own front yard because we have been foolish and lazy and have allowed the weeds of ignorance to grow in place of a garden of education and knowledge.

In the meantime, I have a predicament. How do I teach my university classes when so many students come to college with inadequate backgrounds?

This essay reflects the opinion of the author and not necessarily the opinion of The Pennsylvania State University.

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J. EDWARD KETZ is accounting professor at The Pennsylvania State University. Dr. Ketz's teaching and research interests focus on financial accounting, accounting information systems, and accounting ethics. He is the author of Hidden Financial Risk, which explores the causes of recent accounting scandals. He also has edited Accounting Ethics, a four-volume set that explores ethical thought in accounting since the Great Depression and across several countries. He is the co-author of a monograph, Fair Value Measurements: Valuation Principles and Auditing Techniques (with Mark Zyla, Managing Director, Acuitas, Inc.) to be published by BNA.


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