The Business Activity Model: An Experiment in Self-Learning

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The Business Activity ModelAn Experiment in
Self-Learning
Anthony H. Catanach Jr. acatanach_at_msn.com 610-519-
4825
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Seminar Objectives

• Briefly review the Business Activity Models
  (BAM) pedagogy.
• Describe the formal assessment project funded by
  the Carnegie and Pew Foundations and the AAA.
• Discuss the studys preliminary results.
• Comment on future directions of the instructional
  approach and study.

Please ask any questions as they may arise.
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The Business Activity Model Hopes to Treat Three
Educational Maladies
Lee S. Shulman in Taking Learning Seriously, 1999.

• Amnesia - forgetting what learned in class.
• Fantasia illusory understanding or persistent
  misconceptions.
• Inertia ideas are not used or applied.

So how does the BAM work?
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The Business Activity Model

• Seeks to motivate students for the accounting
  profession, promote technical competency, develop
  life-long research skills, advance critical
  thinking, and foster communications skills.
• Over two semesters, students mimic the accounting
  and financial reporting processes found in the
  real world by conducting analytical reviews,
  soliciting information from clients, preparing
  correcting entries, and drafting financial
  statements.
• Allows technology (CD ROM, Internet, Electronic
  Libraries, Email) to be incorporated in the
  classroom (instruction, administration, etc.),
  but technology is purposefully kept in the
  background so as to focus on the models
  objectives.

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General Approach

• Confront students with real life business
  contexts.
• Introduce ambiguity (e.g. relatively obscure
  hydraulic maintenance services industry).
• Require students to provide a full range of
  accounting, tax, and consulting services as
  members of a professional services team (i.e.
  group work).
• Place greater reliance on Socratic Method.
• Focus on financial statements and disclosure.

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Specific Approach

• Students are introduced to accounting issues as
  they are encountered by a fictitious company
  during the first seven years of its life cycle.
• Groups progress from compilations and reviews
  (years 1 and 2) to audit services (last 5
  years).
• For each year, students recommend correcting
  entries, and prepare complete sets of financial
  statements including all note disclosures.

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Primary Classroom Activities

• Prior to Day One - Students are provided with
  client-prepared financial statements and records.
• Day One - Students ask the client questions that
  allow them to determine whether the financial
  statements are in accordance with GAAP. Groups
  also must solicit information that is needed for
  correcting entries and financial statement
  disclosures.
• Day Two - Students present correcting journal
  entries.
• Day Three - Groups present complete sets of
  financial statements and note disclosures.

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Unique Course Characteristics

• Class time devoted to critical thinking and
  communication skills issue identification,
  resolution of ambiguity, etc. (not information
  delivery).
• Delivery of technical information shifted outside
  the classroom replace lectures with client
  analytical review exercises and detailed
  take-home research projects.
• No CPA exam focus.
• Course revisions are continuous (thanks to the
  FASB).
• Integrates course with other classes (audit, tax,
  etc.).

But Does the BAM Work???
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The History of the Business Activity Models Use

• Until the past year, the model has been used only
  at the University of Virginia.
• Skeptics have argued that great professors and
  great students account for any apparent
  success.
• Formal assessment was not possible until
  materials were complete.
• Historically, few resources existed to facilitate
  adoption by other institutions (training, user
  manuals, etc.)
• Yet, this past year, five new institutions
  adopted the BAM, with another coming on line this
  fall.

Now Assessment Can Begin!!!
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Formal Assessment Project

• Begun in the Fall of 1999 with financial support
  provided by the Pew Foundation and the American
  Accounting Association.
• Research also supported by the Carnegie Academy
  for the Scholarship of Teaching and Learning.

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Project DescriptionDoes the Business Activity
Model Work?

• Does the model accomplish its goals?
• How well does it work relative to more
  traditional courses (both in the short-term and
  long-term)?
• Does it affect subsequent courses in the
  curriculum?

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Research Design and Method

• Multi-phase, longitudinal investigation during
  the course (Phase I), subsequent to the course,
  but before graduation (Phase II), and
  post-graduation (Phase III).
• Variety of tools and metrics student, faculty,
  alumni, and employer attitudinal surveys focus
  groups and standardized tests (certification and
  professional exams).
• Except for questions designed to capture
  demographic information or written comment
  feedback, most questions require responses on an
  ordinal scale from one (strongly disagree) to
  five (strongly agree).

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Progress To Date

• Three attitudinal surveys were created, pilot
  tested, and delivered to over 300 intermediate
  financial accounting students at five U.S.
  universities.
• The following results were compiled from two
  surveys of the first semester intermediate course
  at each school.
• Second semester responses are being coded.

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Student Profile

• Average age 21.5 years (70 ? 20 years)
• Other characteristics 54 female, 85 juniors,
  19 minority status, 4.7 foreign, and 23.6
  transfers
• Major 62.4 accounting with another 31 double
  majoring in accounting with another discipline
• Academics mean GPA of 3.3 (53 in top 10 of
  high school class)
• Experience gt 60 reported no previous experience
  with accounting
• Work 20 (5-10 hours per week) and 30 (10-20
  hours per week)
• Study Hours 44.1 (10-20 hours per week) and 16
  (more than 20 hours per week)

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Critical Thinking

• Students enjoy identifying and solving problems,
  but admit to difficulties in formulating
  decisions.
• After the BAM, students agree that ambiguity and
  uncertainty hinder their ability to solve
  problems.
• 17.8 rate uncertainty as their greatest dislike
  for the course
• 22.4 suggest that the course can be improved by
  reducing uncertainty
• Students acknowledge that the BAM encouraged
  critical thinking
• Median response of 4 on a 5 point scale (strongly
  agree)
• 10.3 rated critical thinking and analysis as
  what they most liked about the BAM

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Group Work

• Student attitudes toward working in groups was
  generally positive and consistent throughout the
  semester. They acknowledge that working with
  others is important and that group exercises are
  an effective learning tool.
• However, there are several inconsistencies
• 26.3 rate group work as what they like most
  about the course
• 16.8 rate group work as what they like most
  about the BAM
• 16.3 cite working in groups as one of the least
  attractive aspects of the BAM

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Communication Skills

• Student ratings of the importance of oral
  communication skills to business declined during
  the semester, as did their beliefs that oral
  presentations reflected their knowledge. Yet,
  more students rated their communication skills
  higher at the end of the semester than at the
  start. Neutral on whether the course improved
  them.
• Students rated the importance of writing to
  learning lower at the end of the semester, while
  valuing essays as useful in evaluating
  knowledge more at the end of the semester than
  at the beginning. Neutral on whether the course
  improved them.

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Research Ability

• Students prefer courses that rely on detailed
  texts over those that encourage library research
  and readings, even though they are comfortable
  with computerized research tools.
• After one BAM semester, students report a higher
  expectation that the course text should have
  most of the answers.
• These responses are consistent with student
  concerns over the uncertainty they face in
  theBAM.

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Motivation Toward the Profession

• Most students recognize the value of the
  accounting major in providing access to business
  opportunities.
• However, student ratings of interest in
  accounting as a major declined slightly after
  the first semester and students were neutral as
  to whether the course increased interest in
  accounting.
• Nevertheless, students agreed that the BAM
  enhanced their understanding of the profession
  and addressed important business issues.
• 43.9 indicated that the BAMs realism was what
  they liked most about the course.

Wait A Minute Here!!!!
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Isnt it ironic that most students appreciate the
BAMs realism, but dislike its uncertainty? Stude
nts dont equate the business world with risk and
uncertainty!
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Course Rigor

• Students were almost unanimous in their
  assessment of the course as being time consuming,
  challenging, and interesting.
• 12.1 cited information overload for the course.
• 11.0 disliked time-consuming nature.
• Generally agreed that the BAM was a valuable
  learning tool.
• 17.3 reported the BAM to be what they liked most
  about the course.
• 10.1 recommended that nothing be changed in the
  course.

But How Do the Instructors Feel?
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Instructor Feedback

• I really enjoy doing the BAM and the students
  seem more interested in class, although I dont
  think they like having to depend to meet outside
  of classAlso, I think theyre struggling on how
  to learn on their own. 
• There is a lot less frustration among the
  students that I thought there would be. As for
  me, I am having a ball. This is by far, the most
  fun I have ever had teaching (moderating) an
  intermediate accounting class.
• I love teaching the course this way and hope to
  do a much better job in the future. I had some
  difficulty in knowing what to really emphasize
  and reinforce in class discussion so that
  students had a better idea what to studyour
  students really seem to enjoy the interaction and
  analytics.

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Interim Result Summary

• Students dislike the uncertainty and miss having
  lectures.

Students appreciate the models realism and
faculty enjoy using it.
Too Early to Tell on Model Effectiveness!
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Intriguing and Unexpected Findings

• Effect of Changing Student Demographics on
  Curriculum Design and Implementation

Double Majors
Student Hours Worked
Extra Curricular Activities
Theoretical Model and Approach May Be Sound, But
Demographics May Prevent Desired Outcomes.
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Intriguing and Unexpected Findings
The Influence of Student Expectations on
Curriculum Implementation
Family
Classmates
Other Students
Metrics May Not Properly Capture Model Outcomes.
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Immediate Implications of the Current Work
Reinforced the need for multiple metrics and
research methods, as well as careful program
implementation.
Opened the door to a new investigation that can
be initiated, while awaiting completion of the
longer, longitudinal project.
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The New StudyResearch Contributing to
Professional Practice

• I will match student demographic and attitudinal
  data from the current project to newly collected
  student internship feedback data. This will
  allow me to
• Report on firm internship program performance.
• Match student profiles to internship program
  ratings.

This Means That My Carnegie Project May Impact
Both University Curriculum AND Professional Firm
Training Programs
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Conclusion
Good measures will allow us to capture the
gut-wrenching drama and conflict found in
Accounting
Preparing to do Battle
The Thrill of Victory
The Agony of Defeat
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Thank YouQuestions and Comments

• Catanach Jr., A. H., D. B. Croll, and R. L.
  Grinaker. Teaching Intermediate Financial
  Accounting Using a Business Activity Model.
  Forthcoming in Issues in Accounting Education
  (November 2000).
• My web page http//www19.homepage.villanova.edu/a
  nthony.catanach/BAMHome.htm
• Melody Marcus at McGraw Hill Irwin
  (212-904-2029 or melody_marcus_at_mcgraw-hill.comm).
• McGraw Hill presentations on Tuesday at 1015 AM
  and 315 PM in the Mariott (rooms 309 and 310).
  Stop by their booth to sign up.
• Contact Mary Harsten (St. Marys University), Bob
  Hilbelink (Dordt College), Dave Kircher (Ohio
  University), Brock Murdoch (Cal State Chico),
  and Gerry Dougherty (Villanova University).