Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji joeb.81.4.221-224
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.
Submit your article to this journal
Article views: 117
View related articles
Citing articles: 15 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Download by: [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RA JA ALI HA JI
TANJUNGPINANG, KEPULAUAN RIAU]
Date: 12 January 2016, At: 18:00
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VIEWPOINT
Using Problem-Based Learning in
Accounting
JAMES D. HANSEN
MINNESOTA STATE UNIVERSITY MOORHEAD
MOORHEAD, MINNESOTA
ABSTRACT. In this article, the author
describes the process of writing a problembased learning (PBL) problem and shows
how a typical end-of-chapter accounting
problem can be converted to a PBL problem. PBL uses complex, real-world problems to motivate students to identify and
research the concepts and principles they
need to know to solve these problems. Students work in teams to acquire, communicate, and integrate information. The goals
of PBL are to help students (a) think critically, analyze, and solve complex realworld 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 continual learners.
Copyright © 2006 Heldref Publications
B
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 problem-based learning (PBL). PBL is a
teaching method that involves students
as active, independent learners and
problem solvers in team-based collaborative learning.
PBL has been used in medical
schools for years and extensively at several other institutions as well. PBL originated in medical schools at Case Western 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 curriculum in marketing and management to
conform to a PBL approach. The new
curriculum is structured with problems
created around concepts with which faculty want students to become familiar.
The University of Delaware and Samford University in Birmingham, Alabama
are two of several schools that have promoted 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-ofchapter 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 debtauditing 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 Accounting Association, 1986) recommended
“educational experiences for students
that require them to be active, independent 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 participants in the learning process, not passive 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
March/April 2006
221
Downloaded by [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RAJA ALI HAJI TANJUNGPINANG, KEPULAUAN RIAU] at 18:00 12 January 2016
an extension of the AECC’s report. The
Framework supports a shift from a content-driven to a skills-based curriculum
and lists PBL as a recommended teaching
strategy, including problem-based learning cases and problem-based learningguided 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. Complex, 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 integrating information. In contrast to the more
traditional approach of assigning an
application problem at the end of a conceptual unit, PBL uses problems to
motivate, focus, and initiate student
learning. The case or problem is deliberately intended to act as a catalyst to
promote the acquisition of new knowledge. Students should not have sufficient 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 continual learners (Duch, Groh, & Allen,
2001). The PBL process works as follows: Students are presented with a
problem (e.g., case, videotape, a
research paper). In groups, they organize their ideas and attempt to define the
broad nature of the problem, pose questions, and define and rank learning
issues that they do and do not understand. 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, integrating their new knowledge into the context of the problem, and students contin222
Journal of Education for Business
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 challenge 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 rationalization.
3. Cooperation from all members of
the team should be necessary to effectively work through a problem.
4. The initial questions in the problem
should have one or more of the following characteristics so that all students in
the groups are initially drawn into a discussion 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 challenge students to develop higher order
thinking skills such as analysis, synthesis, and evaluation.
A good PBL problem reaches a higher cognitive level than a typical end-ofthe-chapter problem. Duch (2001) categorizes problems by three levels. A level
1 problem is a typical end-of-chapter
problem, at the knowledge or comprehension cognitive level. The problem is
generally confined to the topics
addressed in the chapter and all of the
information needed to solve the problem is given.
A level 2 problem adds a storytelling
aspect to the end-of-chapter problem.
This provides some motivation for students 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 decision making involved, placing the questioning 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 chapter or perhaps even in the textbook. Students need to do some research, discover new material, 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 longterm debt (LTD) could be taught using a
subject-based learning approach or,
alternatively, as problem-based learning. With subject-based learning, students are told what they need to know,
they learn it, and they are given a problem to illustrate how to use the knowledge 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 Appendix 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 problem. 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 knowledge 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 University of Delaware’s Problem-Based
Learning Clearinghouse, https://chico
.nss.udel.edu/Pbl/).
Downloaded by [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RAJA ALI HAJI TANJUNGPINANG, KEPULAUAN RIAU] at 18:00 12 January 2016
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 procedures 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 (applying learned knowledge and analyzing).
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 thinking skills of analysis and evaluation.
Teaching students to audit LTD using a
PBL problem is challenging and motivating for the students because they
must incorporate the higher order
thinking skills mentioned and also satisfying for the instructor because the
instructor can observe students developing 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 manner 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 methods 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 experience 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 introduce 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 problems, find and use learning resources,
work in teams, use effective communication 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: [email protected]
REFERENCES
Accounting Education Change Commission.
(1990). Objectives of education for accountants: Position statement number one. Issues in
Accounting Education, 5(2) 307–312.
American Accounting Association (AAA), Bedford Committee, Committee on the Future
Structure, Content, and Scope of Accounting
Education (The Bedford Committee). (1986,
Spring). Future accounting education: Preparing for the expanding profession. Issues in
Accounting Education,1(1), 168–195.
American Institute of Certified Public Accountants (AICPA). (1999). The AICPA core competency 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 problem-based learning? In B. Duch, S. Groh, & D.
Allen (Eds.), The power of problem-based learning (pp. 3–11). Sterling, VA: Stylus Publishing.
Milne, M. J., & McConnell, P. J. (2001). Problembased 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 procedures will need to be performed to satisfy these objectives.
March/April 2006
223
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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 purchase 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 president 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 procedures 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.
224
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.
Submit your article to this journal
Article views: 117
View related articles
Citing articles: 15 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Download by: [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RA JA ALI HA JI
TANJUNGPINANG, KEPULAUAN RIAU]
Date: 12 January 2016, At: 18:00
Downloaded by [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RAJA ALI HAJI TANJUNGPINANG, KEPULAUAN RIAU] at 18:00 12 January 2016
VIEWPOINT
Using Problem-Based Learning in
Accounting
JAMES D. HANSEN
MINNESOTA STATE UNIVERSITY MOORHEAD
MOORHEAD, MINNESOTA
ABSTRACT. In this article, the author
describes the process of writing a problembased learning (PBL) problem and shows
how a typical end-of-chapter accounting
problem can be converted to a PBL problem. PBL uses complex, real-world problems to motivate students to identify and
research the concepts and principles they
need to know to solve these problems. Students work in teams to acquire, communicate, and integrate information. The goals
of PBL are to help students (a) think critically, analyze, and solve complex realworld 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 continual learners.
Copyright © 2006 Heldref Publications
B
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 problem-based learning (PBL). PBL is a
teaching method that involves students
as active, independent learners and
problem solvers in team-based collaborative learning.
PBL has been used in medical
schools for years and extensively at several other institutions as well. PBL originated in medical schools at Case Western 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 curriculum in marketing and management to
conform to a PBL approach. The new
curriculum is structured with problems
created around concepts with which faculty want students to become familiar.
The University of Delaware and Samford University in Birmingham, Alabama
are two of several schools that have promoted 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-ofchapter 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 debtauditing 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 Accounting Association, 1986) recommended
“educational experiences for students
that require them to be active, independent 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 participants in the learning process, not passive 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
March/April 2006
221
Downloaded by [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RAJA ALI HAJI TANJUNGPINANG, KEPULAUAN RIAU] at 18:00 12 January 2016
an extension of the AECC’s report. The
Framework supports a shift from a content-driven to a skills-based curriculum
and lists PBL as a recommended teaching
strategy, including problem-based learning cases and problem-based learningguided 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. Complex, 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 integrating information. In contrast to the more
traditional approach of assigning an
application problem at the end of a conceptual unit, PBL uses problems to
motivate, focus, and initiate student
learning. The case or problem is deliberately intended to act as a catalyst to
promote the acquisition of new knowledge. Students should not have sufficient 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 continual learners (Duch, Groh, & Allen,
2001). The PBL process works as follows: Students are presented with a
problem (e.g., case, videotape, a
research paper). In groups, they organize their ideas and attempt to define the
broad nature of the problem, pose questions, and define and rank learning
issues that they do and do not understand. 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, integrating their new knowledge into the context of the problem, and students contin222
Journal of Education for Business
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 challenge 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 rationalization.
3. Cooperation from all members of
the team should be necessary to effectively work through a problem.
4. The initial questions in the problem
should have one or more of the following characteristics so that all students in
the groups are initially drawn into a discussion 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 challenge students to develop higher order
thinking skills such as analysis, synthesis, and evaluation.
A good PBL problem reaches a higher cognitive level than a typical end-ofthe-chapter problem. Duch (2001) categorizes problems by three levels. A level
1 problem is a typical end-of-chapter
problem, at the knowledge or comprehension cognitive level. The problem is
generally confined to the topics
addressed in the chapter and all of the
information needed to solve the problem is given.
A level 2 problem adds a storytelling
aspect to the end-of-chapter problem.
This provides some motivation for students 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 decision making involved, placing the questioning 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 chapter or perhaps even in the textbook. Students need to do some research, discover new material, 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 longterm debt (LTD) could be taught using a
subject-based learning approach or,
alternatively, as problem-based learning. With subject-based learning, students are told what they need to know,
they learn it, and they are given a problem to illustrate how to use the knowledge 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 Appendix 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 problem. 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 knowledge 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 University of Delaware’s Problem-Based
Learning Clearinghouse, https://chico
.nss.udel.edu/Pbl/).
Downloaded by [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RAJA ALI HAJI TANJUNGPINANG, KEPULAUAN RIAU] at 18:00 12 January 2016
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 procedures 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 (applying learned knowledge and analyzing).
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 thinking skills of analysis and evaluation.
Teaching students to audit LTD using a
PBL problem is challenging and motivating for the students because they
must incorporate the higher order
thinking skills mentioned and also satisfying for the instructor because the
instructor can observe students developing 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 manner 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 methods 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 experience 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 introduce 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 problems, find and use learning resources,
work in teams, use effective communication 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: [email protected]
REFERENCES
Accounting Education Change Commission.
(1990). Objectives of education for accountants: Position statement number one. Issues in
Accounting Education, 5(2) 307–312.
American Accounting Association (AAA), Bedford Committee, Committee on the Future
Structure, Content, and Scope of Accounting
Education (The Bedford Committee). (1986,
Spring). Future accounting education: Preparing for the expanding profession. Issues in
Accounting Education,1(1), 168–195.
American Institute of Certified Public Accountants (AICPA). (1999). The AICPA core competency 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 problem-based learning? In B. Duch, S. Groh, & D.
Allen (Eds.), The power of problem-based learning (pp. 3–11). Sterling, VA: Stylus Publishing.
Milne, M. J., & McConnell, P. J. (2001). Problembased 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 procedures will need to be performed to satisfy these objectives.
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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 purchase 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 president 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 procedures 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.
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