ISSUES IN ACCOUNTING EDUCATION Vol. 23, No. 3 August 2008 pp. 493 498 Book Reviews Khondkar E. Karim, Editor Editor s Note: Books for review should be sent to Khondar E. Karim, E. Philip Saunders College of Business, Rochester Institute of Technology, Rochester, NY 14623. The policy of Issues in Accounting Education is to publish only those reviews solicited by the Book Reviews Editor. Unsolicited reviews will not be accepted. PETER D. EASTON, JOHN J. WILD, ROBERT F. HALSEY, AND MARY LEA McANALLY, Financial Accounting for MBAs, Third Edition (Chicago, IL: Cambridge Business Publishers, 2008, pp. 1, 640). Financial Accounting for MBAs, Third Edition, is designed to educate and inform managers on the use of accounting information for making managerial decisions. Since M.B.A. students will likely assume managerial positions charged with making business decisions that leverage accounting information, the most appealing feature of this book is the adoption of a user-based approach with actual information from companies drawn from a broad spectrum of industries. The rich diversity of real-life examples to illustrate concepts provides the reader an opportunity to visualize the role of accounting information in different scenarios. The book is divided into self-contained yet related modules that broadly include financial statements preparation (Modules 1 3), financial statement analysis (Module 4), special financial accounting topics (Modules 5 10), adjustment and forecasts (Module 11), and valuation models (Module 12). The book culminates with a comprehensive module at the end of the text providing a rich learning opportunity that integrates information from previous modules. This structure allows the instructor the flexibility to adapt the contents to different time frames of courses and student needs. Thus, the book is useful for both short-term and long-term M.B.A. courses. Being an accounting text, the authors have kept the essentials of accounting mechanics intact while emphasizing and retaining the decision focus how to use the accounting information to make decisions. Readers who wish to engage in relating to the fundamental accounting process will not be entirely disappointed either, since the book illustrates the decision aspect through the financial statement effects template. This template is useful to understand the economic issues in a decision and the basic accounting process associated with that decision. To provide validity and underlying foundation, the authors supplement discussion with relevant academic research, allowing the student to relate the impact of research on practice. At the end of each module, the student has a varied and engaging set of learning activities to test the knowledge. The book could have benefited from a more conscious attempt at discussing the effect on managerial decisions of such issues as ethics, international accounting, principles based accounting, and the current move toward IFRS adoption that promises to change accounting. Some of these issues are only covered in isolation and not tightly integrated in the main discussion. For example, issues of ethics and corporate governance are addressed in some modules only as part of exercises. These issues are not separate but rather intertwined in any business decision. Integrating these issues in each module and engaging the manager 493
494 Book Reviews to consciously address them in their decision model would have added richness and realism to the discussion. In summary, the book does adopt a novel approach to teach accounting to students for managerial decisions, and the authors deserve commendation for their efforts. They have managed to retain the basic accounting process while providing the decision focus to help managers evaluate and make business decisions. Instructors will find the book flexible to adapt to the needs of their course objectives and time period. M.B.A. students (of various programs and durations) will find the learning approach a reinforcing, enjoyable, and engaging experience. AKHILESH CHANDRA Professor The University of Akron WILLIAM N. LANEN, SHANNON W. ANDERSON, AND MICHAEL W. MAHER, Fundamentals of Cost Accounting, Second Edition (New York, NY: McGraw-Hill/Irwin, 2008, pp. xxxiv, 636). This textbook is an appropriate resource for an undergraduate introductory cost accounting course. In this book, the authors intend to present materials that are relevant for both the preparer and consumer of cost information. Chapter materials are designed to provide students with necessary working knowledge and tools in various cost accounting techniques, which also forms a foundation for the higher-level cost management course. Each chapter presents various cost accounting concepts and techniques in a concise and readable manner along with easy-to-understand illustrations, problems, and cases based on actual business situations. The major strength of the book is the writing style and the organization of topics, making it easy to follow and comprehend. This user-friendly approach is applied all through the 18 chapters of the book in presenting the cost accounting concepts and techniques and in underscoring the essence of cost accounting data for decision usefulness. Each chapter of the book is nicely laid out, and includes simple examples that are sequentially developed to support discussion of chapter materials. I especially like the use of self-study questions at the end of each topic that round up the necessary concepts and guide students to work on the important parts of chapter materials. Each chapter includes summary key points, review questions, critical analysis and discussion questions, plenty of end-of chapter exercises and problems, and also the solutions to the self-study questions at the end. Furthermore, I appreciate the emphasis of the book in solving problems by integrating the use of Excel software. In many chapters, the authors explicitly provide illustrations about how to use various Excel analytical tools to solve specific cost accounting problems. This is certainly a value-addition and a key strength of the book. A significant amount of instructor resources are available in the instructor resource CD- ROM, and instructor resource manual, solutions manual, test bank, Excel spreadsheet templates and PowerPoint presentations that were developed by several experienced university faculties. The book is also well supported by McGraw-Hill s Homework Manager Plus, which provides self-graded practice problems for students, and creates assignments and tests with unique versions of every problem. Online Learning Center (OLC) for the book helps students with such resources as: self-grading quizzes; ipod downloadable content; links to text references; links to professional resources; chapter overviews and learning objectives; PowerPoint presentations; videos. Furthermore, password-protected instructor supplements are available online as well. Another available feature of OLC is Top Tackler
Book Reviews 495 Plus, a complete multimedia tutorial that focuses on the most difficult cost accounting topics in each chapter. In summary, I am pleased to review this textbook and find it useful for teaching an undergraduate cost accounting course. Because of its user-friendly and orderly approach, comprehensive coverage of basic cost accounting techniques, and adequate instructor and student resources, the book should merit a serious consideration by cost accounting professors as a primary textbook for an introductory costing accounting course. If someone teaches basic cost accounting for the first time, then this book should be regarded as an excellent candidate for adoption. SANTANU MITRA Associate Professor Wayne State University FREDERICK L. JONES AND DASARATHA V. RAMA, Accounting Information Systems: A Business Process Approach, Second Edition (Mason, OH; Thomson South-Western, 2006, pp. x, 684). Enabled by Enterprise Resource Planning (ERP) systems, today s businesses are moving away from a functional approach, towards an integrated approach to managing transactions. This approach requires the accountant to understand the flow of transactions through the entire business process, from order-to-cash or purchase-to-pay. These business processes are reflective of a business strategy and are supported by Accounting Information Systems (AIS) that require the management of Information Technology (IT). Accounting Information Systems: A Business Process Approach, covers the many disparate topics in AIS through the use of a framework tied to these concepts. Broad topics of the text include AIS Concepts and Tools, Understanding and Developing Accounting Systems, Transaction Cycles and Accounting Applications, and Managing Information Technology and Systems Development. The placement of these topics within a framework, detailed on the inside cover of the text, is what sets this book apart from others. The authors have identified the key components of studying AIS as: Business Strategy, Business Processes, AIS Applications, and the IT Environment. This is a first look for many students as to how accounting, and the systems that support it, in turn support the organization. Chapters 1 4 focus on the business processes, enabling the student to see the big picture that eludes many of them as they take accounting courses focused on specific transaction types. Chapters 5 7 illustrate the use of accounting information, with a focus on application use and development. It answers the practical questions: What data supports decision-making? How can data best be formatted to convey information? How should forms be designed to provide user-friendly interfaces for data input? Chapters 8 11 combine the application with the business process, allowing the students to see how the big picture developed in the earlier chapters is implemented in an organization. Finally, management of the IT infrastructure, as well as IT Governance and General Controls, are covered in the last chapters. Business strategy is infused in all of the chapters. This text is well suited to a course that is more technically oriented, particularly for the instructor who likes to add hands-on application development to the theory covered in the text. There is sufficient detail in each chapter that the motivated student will be able to apply the concepts in a concrete fashion. In particular, the end-of-chapter material supports this active learning. The authors recognize that an AIS course differs from the typical accounting class and provide exercises to move the student from a mastery of the terminology and new concepts through short exercises and on to problem solving exercises designed to challenge the student to apply the material in new and different ways.
496 Book Reviews Overall, the text does a good job of grounding the sometimes dense material in a framework that exemplifies well the current business environment. Students who understand the overall business processes of an organization will be better situated when called on to make decisions and apply their accounting knowledge in an increasingly integrated organizational structure. M. PAMELA NEELY Assistant Professor Rochester Institute of Technology WILLIAM R. SCOTT, Financial Accounting Theory, Fourth Edition (Toronto, Canada: Pearson/Prentice Hall, 2006, pp. vi, 472). Financial Accounting Theory has 13 content chapters, and several sections containing preface, acknowledgements, bibliography, and index (subject and author index combined). The first edition of the book appeared in 1997. The book s success is indicated by the frequency of revisions, averaging a revision for every three years the book has been in print. As the author has indicated in the preface, the fourth edition has substantial revisions in both contents and topics covered in the book. Financial Accounting Theory s 13 chapters are well prepared and presented. The first chapter is an introduction. It sets the theoretical framework: both historical and ethical, and their applications to accounting research. Accounting research is approached from two complementary perspectives. The first is theory in research, described in ideal conditions, adverse selection, and moral hazard. The second aspect focuses on theory in practice, which is discussed within the context of standard-setting entities/bodies. The remaining 12 chapters are organized within these two broad frameworks: theory in research and practice of financial accounting. Chapters 3 to 11 discuss research in financial accounting, while the last two chapters, 12 and 13, are devoted to accounting in practice standard-setting entities, particularly those agencies in Canada. Chapter 13 has a section on the United States standard-setting bodies: Financial Accounting Standards Board (FASB), and Securities and Exchange Commission (SEC), as well as the International Accounting Standards Board (IASB). The United States and IASB are incorporated as they relate to the Canadian Accounting standard-setting and practices. This structure enables the student and/or reader to have a broader understanding of the Canadian accounting practices as they interface and shaped by the accounting practices in the United States and Europe. For the instructor, the text has teaching supplements: an instructor resource CD-ROM, which contains instructor s manual; solutions to chapter-end questions and problems; learning objectives for each chapters as well as supplementary references; and PowerPoint presentations. While Financial Accounting Theory has chapter-end questions and problems, it does not provide the student/reader with a list of suggested readings by chapters, which are relevant if the book is expected to be used in upper-level accounting theory courses or seminars. The book does offer supplementary materials for students, for example, a student CD that has sample exercise solutions for questions and problems included in the book, cases, business practices, examples from standard-settings, and supplementary readings. If it is expected that the book can reach wider audiences beyond students taking accounting courses, then these supplementary materials become relevant. Otherwise, access to these materials will be limited only to students enrolled in accounting courses. It is obvious that the text is a financial accounting theory book that is suited for a broader audience: students and accounting researchers, as well as practitioners. As an accounting theory textbook, it is appropriate for upper-level undergraduate and advanced
Book Reviews 497 M.B.A. classes beyond intermediate and advanced accounting. It can also serve a supplementary reading for doctoral seminars in financial accounting theory classes. The book has been primarily written for students and practitioners in Canada. In this aspect, the materials presented in the book are primarily within the context of the Canadian accounting standardsetting and business environment. Nevertheless, the book can be used as a required or supplementary text in a financial and/or an international accounting theory course. There has been an emphasis in internationalizing the accounting curriculum. Accounting theory courses have incorporated international and global accounting standards and policies. Books like Financial Accounting Theory will assist in meeting the demands of instructors who are considering adopting books to use as a text and/or supplementary readings in their accounting theory and seminar classes at both the undergraduate and graduate levels. Whichever adoption method or preferences is used for Financial Accounting Theory, there is no doubt that it serves the needs of instructors, students, and practitioners who are interested and pursuing a career in international accounting. SELESHI SISAYE Professor Duquesne University MARYANNE M. MOWEN AND DON R. HANSEN, Cornerstones of Managerial Accounting, Second Edition (Mason, OH: Thompson South-Western. 2008, pp. xxx1, 772). Cornerstones of Managerial Accounting, Second Edition, is a relatively recent entry in the crowded cost/managerial accounting arena. The textbook contains 16 chapters that are common to the majority of undergraduate texts. The last two chapters, Statement of Cash Flows and Financial Statement Analysis, address topics often presented in other courses in the curriculum and thus could be omitted if the book were used in a one-semester course. The two outstanding features of the book are its many contemporary student-oriented features and the wide variety of teaching and learning tools that are available to instructors and their students. For example, each chapter begins with a 1 2 page mini-case that provides an informal scenario of decision-related issues that are addressed in the chapter. This narrative is revisited at the conclusion of the chapter and neatly summarizes the relevance of the chapter topics in regard to the initial scenario. Each chapter typically includes multicolored figures and photos, sidebar concept, or analytical Q&A sections, and 1/2- to 3/4- page discussions ( Experiences ) that link key topics to well-known companies as well as videos that can be directly accessed by students. Perhaps most importantly, this book utilizes Thompson South-Western s Cornerstones pedagogy, which provides numerous and fully illustrated calculations of key topics in a step-by-step format that most students would appreciate. As is the case in the majority of contemporary accounting texts, Learning Objectives are identified and summarized in each chapter, as well as attached to each exercise or problem. Cornerstones are also associated with a majority of exercises, thus enabling students to refer back to solved templates within the chapter. Another obvious strength is that the end-of-chapter materials are varied and extensive. They include Key Terms, Review Problems, Summary of Important Equations, Discussion Questions, Multiple-Choice Exercises, Exercises, Problems, and Cases (one of which involves ethical behavior). As a result, the book easily accommodates different instructional approaches (e.g., in class quizzes, group assignments, critical discussions) to reinforce chapter contents. It can also be used at different levels within the curriculum either in a
498 Book Reviews Managerial or second Principles of Accounting course that would be taken by accounting and nonaccounting majors, or a Cost Accounting class for accounting majors. The book s one disadvantage, minor though it may be, is the absence of a clearly discernable integrative theme. In other words, the book appears neither oriented toward decision making nor mainstream cost accounting (e.g., product or service costing.) The sequencing of chapters also seems a bit odd in that short-run decision making is presented in the last third of the course (Chapter 12). Notwithstanding, the book s chapters stand well on their own and could be re-sequenced without too much concern. All in all, the book has many excellent pedagogical features that will be appreciated by most students, and thus should given serious consideration for adoption. THOMAS TYSON Professor St. John Fisher College