Anne Marie Garvey

In the Aftermath of Crisis: The Post-Enron Implications for Spanish University Accounting Educators

Abstract This paper is a consideration of the role that ethics must play in accounting education followed by a set of implementation proposals. It is based on the lack of response by the profession in Spain, as in some other European countries, to the crisis produced by recent financial scandals, both at a national and international level. Three proposals are made in the paper to reintroduce ethics into accounting education. Firstly, a case is made for a more contextual learning of accounting standards. This would help to avoid teachers and future professionals becoming passive and blind adopters of accounting rules. Secondly, the paper advocates the introduction of ethical reasoning in all accounting courses, as the best way for students to understand that there is more to the preparation of accounts than just following accounting standards. Thirdly, the paper points critically to the lack of accountability by professionals who prepare financial statements in corporations and supports them being made more responsible for their actions. This set of proposals is seen to be consistent with the notion of an accounting profession that is ethical at an individual level and responsible at a social level.

Cognitive Load Theory: Why It’s Important for International Business Teaching and Financial Reporting

ABSTRACT Cognitive load theory (CLT) has rarely been applied in the area of financial accounting. This research demonstrates that by using CLT, financial accounting and reporting can benefit in the areas of teaching and decision making. The CLT indicates that by reducing the load of complex concepts in the working memory, a more efficient result is obtained from the expected output. A real example on International Accounting Standard (IAS) 40 on Investment Properties (IP) is used to analyze the assimilation of the true and fair view concept. This standard permits the use of either the fair value or cost value model. Additionally, the study examines whether financial presentation formats are relevant for understanding financial information. The main results show that adequate financial presentation formats reduce extraneous load, and where presentation formats cannot be changed, results can be improved by decreasing cognitive load through dedicating more time to teaching the more complex option. This research aims to aid international business education by recommending these findings to standard setters and improving education material.

Perceptions of True and Fair View: Effects of Professional Status and Maturity

This paper examines the effects that professional status and maturity have on the understanding and perception of the true and fair view (TFV) and its True and fair override in Spain. The effects were deduced by a survey conducted on students and auditors. The results show that, while the goal of reaching the TFV is fully integrated into the Spanish accounting system, the implications of such an objective are far from what would be expected. The evidence suggests a practical rejection of the overriding aspect associated with the TFV notion in the EU Directives which is demonstrated by a preference to follow the accounting standards in all cases rather than having to choose when not to apply them in order to achieve this objective. This aversion is logical in a country whose legislation allows little room for flexibility. Finally, the study identifies a pattern of change according to the participant’s professional status and maturity. It is observed that the younger and less professional participants are more concerned with obtaining the TFV than the strict coherence with the accounting standards. However, as the participants evolve according to age and professional status they prefer the TFV to be obtained by a rigorous following of the standards without having to override them, they are also more demanding for a detailed definition of TFV and are much less favourable to the imposition of fines where the TFV is not achieved by following the accounting standards.