A Textbook Retrospective

With school starting back up, I thought I would focus on a topic that is an issue with students at the beginning of every semester: Textbooks. During my undergraduate program, the book we used is, considered by some to be the best accounting textbooks out there for preparing students for the issues covered on the CPA certification exam, Intermediate Accounting by Kieso, Weygandt, & Warfield.

While my instructors required the 13th edition, I tried to skate by with only using the 12th edition and just photocopy the problem sets from fellow classmates who purchased the 13th. I would often sit there with both editions trying to figure out what changed to merit a new publication. Most of the times the only change I could find was the color of textboxes and the variables used in the problems.

Inspired by this summer's 125th anniversary of the Journal of Accountancy, I decided to get my hands on a first edition of Intermediate Accounting and see what has changed over the years. The first edition was published in 1974 with a page count of--Wait, I can make this more fun.

Ring Announcer: In the red corner, coming out of retirement, the 38 year old weighing in at 3 pounds and 9 ounces. With a respectable page count of 1151 pages, here he is INTERMEDIATE ACCOUNTING 1st Edition!

Blow-by-blow commentator: In the corner with him we have two authors: Kieso and Weygandt. While rising to the top with his publication 1974, he was replaced as champion by the slightly less famous second edition in only 1977. Will his experience getting published first help him against his competitor today? Well we will find out in three short rounds.

Ring Announcer: In the blue corner, the new-comer, the 2 year old, weighing it at 5 pounds and 6 ounces. With the backbreaking page count of 1379 pages, the reigning champ, INTERMEDIATE ACCOUNTING 13th Edition!

Blow-by-blow commentator: In the corner with him we have Kieso and Weygant, but also a third author: Warfield. Containing color images and bolded keywords, he seems to be the easy favorite for the modern student. Will this third author simply be a bucket man or will he be the key to the success for the 13th edition?

Round 1: Problem Sets

The only reason students still buy textbooks. While teachers hope their pupils read the chapter before going to lecture, my experience says otherwise. (Note to any of my former professors  reading this: I, of course, was the exception to this rule.) To test this questions I worked through multiple questions from each book in the same chapter.

Each textbook has the problems broken up into different types. For the 1st edition it is Questions, Cases, and Problems. In the 13th edition it is Questions, Brief Exercises, Exercises, Problems and Concepts for Analysis.  Many of the questions found in the 1st edition are still found verbatim in the 13th. <Point 1st Edition> However the development of the Brief Exercises and Exercises help students ease into the homework before being hit by the complex laborious Problems. Some of which take an hour to complete. <Point 13th Edition> Finally, one of the things that I was surprised to find in the first edition was a selection on the inside cover called "Checklist of Key figures". Brilliantly, it gives key check numbers from about half of the questions in the chapter. These numbers aren't always the answer that is asked for but it does help students know if they are doing it right. <Point 1st Edition>

Round 2: Examples
In lecture, it all makes sense. Everything the Professor did on the board seemed simple and logical. Then the night before the assignment is due, panic sets in and the spine of the textbook is cracked. I am basing the quality of examples on their accessibility and their usefulness in completing the questions at the end of the chapter.

I chose to focus on a chapter that covers a topic where the rules have not changed much over the past 40 years: Depreciation. To my surprise almost nothing has changed. The examples found in the first edition are mirrored word for word, number for number in the thirteenth edition. It is pretty amazing that authors could write examples 40 years ago what don't merit any changes for a modern audience  <Point 1st Edition>  But equally as amazing is that the publishers resisted the urge to change the examples. Allowing students who have older editions to follow along as instructors work through the example.  <Point 13th Edition>  (If you were curious I said almost nothing changed. The one change is the example in the 1st edition was Barek's Mining Company and in the 13th it was Stanley's Mining Company)

Round 3: AccessibilityThe final round will look at the rest of the book. Do all the words that fill these 1000+ pages help? How good is the book at introducing topics to a novice? Are the pretty pictures helpful? Necessary?

Similar to my findings in the example round, the text of both books are eerily similar. Sentence after sentence is mirrored. Occasionally, the thirteenth edition adds modern references, but they seem so superfluous that I can't award any points for it. Picture wise the books are again a dead heat. The colored in text-boxes of the thirteenth edition are equally as striking to they eye as grayed out text-boxes in the first edition.

Winner: 1st Edition

Editor's Note: Earlier I praised the 1st edition for its checklist of key figures. I found it rather ingenious. Especially now,  I study for certification exams. As I go back and practice, I have no idea whether I was right or wrong unless I beg former professors to check their answer bank. But I sadly learned that my favorite feature did not survive into the second edition. Replaced with a list of Official Accounting Pronouncements.

To see the photo montage that inspired this post click here.

Spotlight on an Accountant: Edward T. Jones

In honor of the Olympic Games, I decided to write about the role of the United Kingdom in accounting’s history. Originally, I considered doing something on the Scottish Chartered Accountants. Once I delved into it, I realized I was in over my head. It is like trying to write a quick blog post on the effects Shakespeare had on English literature. Not that I will ignore the monument effects of the Scots on accounting, it will just take me more than the 17 days the Olympics give me to properly write about it.

There have been dozens of authors of accounting textbooks since Pacioli. Each one tries to tweak or perfect the Italian method of double entry accounting. Edward T. Jones is one of my favorite. Not because I really think he added anything to the profession. Rather. I admire how much money he made from a textbook that added so little to the practice of accounting. (I’m looking at you modern textbook companies.)

I first came across Jones’s English System of Book-keeping, by Single or Double Entry (1796) when I was researching Pacioli. I was researching the movement of the italian method across Europe. Jones’s book was one of the earliest accounting textbooks I could find being written English. At the time, I did not understand how the Italian roots of accounting went untaught. I found part of my answer with Jones. He tried to undercut and essentially destroy the Italian method by designing his own English method. The joke in this all is, for all his insulting of the italian method, his system does nothing to deviate from its principles.  

A poorly written book does not a successful author make. So how did Jones make all his money? kickstarter.com (well, sort of) He sold pre-orders of his book through a sort of prospectus. At the cost of a guinea, it gave the purchaser a subscription to the book as well at a license to use the practice of accounting used in the book. The prospectus was was filled with testimonies and lists of his subscribers. Somehow he elicited subscriptions from the governor or the Bank of England and Peele (an accountant who wrote good textbooks). So essentially, Jones could say all these famous and respected men bought the license to use his accounting system, when in reality they probably had a mild curiosity about Jones’s “new system”.
 

Historic Conversion

So unless you are a History major or a huge fan of English Literature,you probably don’t know how to convert outdated British currency.  I was happy to found the answer outside of Wikipedia. All of the following comes from a website http://projectbritain.com/.

    1 guinea = 21 shillings

    1 pound = 20 shillings

So why have two denominations for relatively the same amount of money? Status. The guinea was the gentleman’s coin. You paid workers in shillings and fellow gentlemen in guineas.

The £1.05 Jones’s book/license cost roughly converts to $20 in today’s money.


As a post-script. Jones's system was so confusing and so prone to arithmetic errors that by 1831 the author himself abandoned its use.


Editors Note: 


For all of you who watched the opening ceremonies of the Olympics last Friday, you are familiar with the amusing geography lessons of Bob Costas. He is always eager to explain why North Korea marches in with the Ds (Democratic People's Republic of Korea) and all the different names the Ivory Coast go by. What he didn't teach us this year is why sometimes it is Great Britian, sometime it is United Kingdom, and on rare occasion it is England. If anyone can answer this for me without looking at Wikipedia or Yahoo Answers, I would really appreciate it.


Sources:
- Brown, R. A History of Accounting and Accountants. (1905)
- Edwards, J. R. The Routledge Companion to Accounting History. (2009)
- Kojima, O. Accounting History. (1995)
- Parker R. H., Yamey B. S. Accounting History: Some British Contributions. (1994)

An Introduction

The purpose of this blog is to allow myself the chance to continue my academic pursuits of accounting while I study for certification exams and pursue gainful employment in the field.

I laughed when my friend, Bernie, suggested I start a blog. I had graduated and was looking for work. I commented to him over a snifter of brandy the difficulty of my position. I came to accounting late in my scholastic career. I had pursued other academic endeavors before I ended up in the business school. I actually only picked accounting as a major because they said it was the hardest major they had. I discovered not only was I quite good at the subject but I found myself really enjoying it. Accounting had the rules and structure of the sciences with the human element I enjoyed in the social sciences.

I hit a road block when I realized that accounting firms looked for cookie cutter candidates. They take at first look at nineteen year old students in their sophomore year at a weekend seminar. Then they weed down their choices to juniors who intern over the summer. And pick who will come back the following year.

I act old enough to remember these signs.

While I looked great on paper and interviewed well. I was passed up for younger students, who were probably more malleable future accountants. Each year the disparity between my age and my competition grew. I was the top students in my class but I saw firms choosing the C average, twenty year old students.

So back to the conversation over brandy, I was asking Bernie for advice on how to look younger, when he came back with an idea: embrace my experience. I had a wealth of knowledge in both the field of accounting and outside of it. I found loopholes in GAAP that even surprised my professors. There was no way to fit that breadth of knowledge into a résumé or elevator pitch, so start a blog. I politely went along with his seemingly absurd idea until I realized that it would be doubtful I would get many other chances to share this knowledge and continue my pursuits outside of academia.

Acknowledgements

First of, to my best friend Bernie for coming up with the idea.  A friend and co-conspirator for over a decade, this has to be his best idea that does not involve invading small islands or impersonating dignitaries. He gave me the idea around 4 months ago, and made sure I didn't quit on the idea.

Secondly I wanted to thank my girlfriend and by proxy the game developers KingsIsle Entertainment for coming up with the title for this blog. After I got writing and really saw this project coming to fruition. I hit a brick wall in the form of actually naming the blog. Every single accounting term and derivation of said term has been purchased by speculators in hopes that some sap like me is planning on writing a blog and needs a domain name. When I turned to my girlfriend she came up with this name on the first try.

She recalled the pun from when we were blowing off steam during our college years by playing online MMORPGs that were designed for middle school students, not for college students. As such, to prevent profanity, only certain words were allowed to be used in the public chat feature. And apparently accountant and was considered a curse word by these programmers. To get around it I would always type "A Count Aunt" (strangely on this game ant was also too profane of a word)