It is helpful for a teacher to look at school from the perspective of a student. From the time they first enter kindergarten, each teacher will tell the students that this new subject is truly important for them to know. However, not every subject can possibly prove to be immediately significant to every student. Consequently, they learn to be skeptical (very skeptical). From algebra to zoology, students are told that everything is important but often there is no evidence of that in their own world. That is why teachers often must fall back on grades as an artificial way to force importance: “this material is important to you because it is going to be on a test and affect the grade you will get.”
For that reason, when they enter your class, in the back of their mind is the gnawing suspicion: accounting rules are probably not very important regardless of what the teacher is going to tell me.
I try to, at least, put a dent that skepticism as quickly as possible. After the first couple of classes, I ask my students to make a list of the top ten intellectual achievements of the 20th century. A list quickly develops that is usually topped by landing on the moon, the development of penicillin, the creation of the modern computer, the Internet, the invention of the airplane, and the like.
I then read to them the following quote from the Wall Street Journal of August 13, 2001 (which is now found in Chapter Two of our Financial Accounting textbook):
“When the intellectual achievements of the 20th century are tallied, GAAP should be on everyone's Top 10 list. The idea of GAAP—so simple yet so radical—is that there should be a standard way of accounting for profit and loss in public businesses, allowing investors to see how a public company manages its money. This transparency is what allows investors to compare businesses as different as McDonald's, IBM and Tupperware, and it makes U.S. markets the envy of the world.”
The students are just floored. How could anyone place accounting principles on the same level as penicillin and walking on the moon? It is so ludicrous as to be intriguing. So, I put forth one simple question: “assume that the United States had no accounting rules at all. What would be the result?” The conversation that follows is always fascinating.
Students are pretty good at figuring out this author’s logic:
--Without standards, it would be difficult for decision makers to either trust or understand the information they received from an organization.
--Without trust and understanding, people would be much less likely to provide financial resources to these organizations.
--Without financial resources, corporations could not grow to any significant size and they could not develop so many of the things we take for granted today such as computers, airplanes, and automobiles.
Okay, it is a stretch to say that the evolution of civilization depends entirely on GAAP. But, for students, this is an eye-opening conversation. Something that most of them had never heard of two weeks earlier (GAAP) apparently has a essential place in society that was totally unknown to them. Maybe they do need to learn about these accounting principles. Maybe they really are important.
That’s what I want. I’m not trying to convince them that GAAP is more important than penicillin but I am trying to convince them that GAAP is important enough that it is worth their time and energy to learn. If I can convince them of that, I feel that I am much more likely to get them to do the work necessary to learn the material. And, that, to me, is half the battle.