Integrating the Accounting Value Chain in Financial Accounting Courses by Jane Stoneback Anne Rich Central Connecticut State University New Britain, CT

Teaching Objectives Develop understanding about the accounting profession

VALUE CHAIN CONCEPT IDENTIFYING ALL OF THE VALUE CREATING ACTIVITIES – FROM BASIC RAW MATERIALS TO DISPOSAL OF FINISHED PRODUCTS BY END-USE CUSTOMERS – INTRODUCED IN THE 1980S BY Michael Porter based on work done my MCKinsey

LEVELS OF ANALYSIS INDUSTRY ANALYSIS –A LINKED SET OF ACTIVITIES IN THE INDUSTRY DIFFERENT COMPANIES PARTICIPATE IN DIFFERENT ACTIVITIES MANAGEMENT MUST CHOSE THE ACTIVITIES OF THE FIRM – WHAT WILL BE DONE FIRM ANALYSIS –A LINKED SET OF ACTIVITIES TO DEFINE HOW THE FIRM WILL ACCOMPLISH THE ACTIVITY

HOW IS THE VALUE CHAIN USEFUL IN ACCOMPLISHING OUR TEACHING OBJECTIVES UNDERSTANDING THE PROFESSION –INDUSTRY VALUE CHAIN –SKILLS NEEDED TO BE SUCCESSFUL UNDERSTAND THE ACCOUNTING CURRICULUM STUDENTS BEGIN TO DEVELOP OWN PERSONAL VALUE CHAIN

ACCOUNTING INDUSTRY VALUE CHAIN Record Business Events Summarize events into external reports Summarize events into internal reports Transform Data Into Information and Knowledge Value-added Decision Making

ANALYSIS OF ACTIVITIES OPPORTUNITIES TO GROW POINTS OF DISTINCTION DEVELOP INTERNAL AND EXTERNAL LINKAGES LEVERAGE CORE COMPETENCIES

DEVELOP THE FIRM VALUE CHAIN R&DDesignProductionMarketingDistribution Customer Service SUPPORT ACTIVITIES

TEACHING ABOUT THE ACCOUNTING PROFESSION UNDERSTAND THE INDUSTRY VARIETY OF CAREERS EVALUATE POTENTIAL EMPLOYERS MOTIVATE THE ACCOUNTING CURRICULUM ENCOURAGE DEVELOPMENT OF THE INDIVIDUAL VALUE CHAIN

Student Assignments Research international, regional and local accounting firms Research careers – public, private and government Review resumes of competitors Participate in accounting society meetings and professional activities Participate in career fair

AC 300: Fundamentals of Accounting 50 students responded to a survey Approximately half traditional age, half over 25 years of age Mostly accounting majors 70% full time 30% part time 30% no work experience– mostly non- accounting positions

Survey Questions: Focused on Change in Knowledge related to Accounting careers Value chain Professional ethics Skills needed in the accounting profession

Survey Results: Accounting Skills Significant difference between full-time and part time students in understanding of accounting skills needed by the profession Part-time students gained most knowledge about accounting skills needed

Survey Results: Value Chain Knowledge Significant difference between those with work experience and those without work experience in understanding value chain concepts Those with some work experience were able to gain the greatest difference in understanding the value chain

Survey Results Mean differences existed in all categories Largest mean differences appeared in –Value chain –Accounting careers

Benefits Students gain an understanding of the broader purpose of accounting in providing information about a business entity. Students obtain a broader overview of the accounting profession and the numerous accounting careers and rich variety of choice. There are no right or wrong answers to the questions. Students have little fear of getting it right. As a result, students develop better quality answers and engage in discussion.

Benefits - continued Students develop in their understanding of business strategy by looking at the application of the value chain to the accounting profession. It encourages students to know how to find out about what they dont know. If they are interested in forensic accounting, for example, they learn how to research the issue. Students learn the value of student memberships in professional organization and in participating in on-campus clubs.

Benefits concluded Students understand the accounting curriculum and their choices and learn that while they must obtain a foundation knowledge in all areas of accounting, they need not be expert in all topics to be successful in accounting. Accountants eventually find an area that meets their interest. Students learn how to build their resume and acquire the skills needed to be successful in the accounting profession. Students are motivated to achieve their goals and less distracted by material that doesnt excite them when they understand the range of career choices