What is the Unique Approach to Illustrating Financial Accounting Concepts?

The traditional and executive MBA markets tend to be analytical and decision-focused. Because of this, financial accounting needs to be introduced in an accessible and highly relevant manner. Unlike many textbooks in accounting that use the classic debit and credit paradigm to explain key concepts, this textbook explains the fundamentals of financial accounting using an approach that mirrors what is found in practice. It also is easily adaptable to spreadsheet applications. Not only is this approach more user-friendly (because most managers routinely use spreadsheets in their daily professional lives), but it is also far less labor- and time-intensive than the classic debit/credit paradigm.

The unique approach to recording transactions taken in this textbook emphasizes user analysis and deemphasizes bookkeeping. It builds upon the basic accounting equation to demonstrate how business events are processed and ultimately recorded. Both executive and MBA students praise the approach for its simplicity and intuitive appeal, as well as for its link back to how they observe accounting information in their professional lives. More specifically, it presents a vertical format to the balance sheet equation, functionally following the form and presentation of the balance sheet most often observed in practice and annual reports. The format is also used to illustrate income statement accounts as inputs directly into the retained earnings account, reinforcing this important concept to students in a way that helps them more clearly understand the relation between the balance sheet and income statement. Below is an example of the financial statement spreadsheet approach used in the context of a long-term fixed asset acquisition and sale:

Grounded in the Context of Corporate Decisions

Accounting information is an integral part of decision making at every level in business. Consequently, the book’s discussion of important accounting concepts is grounded in the context of actual corporate decisions. To this end, the book contains an abundance of excerpts and illustrations from actual corporate financial reports and disclosures that highlight the role and impact of accounting information, and financial statements specifically, in business decision making. Following is one example in the context of shareholders' equity disclosures:

Does the Book Reflect Contemporary Knowledge?

In our experience, EMBAs and MBAs are frequently interested in exploring empirical questions such as: “How do the capital markets respond to accounting policy changes?” and “Which EPS measure—Basic EPS or Diluted EPS—is used by the capital market to value a company’s stock?” Where appropriate, we reference and discuss current issues in accounting and finance. By doing so, we enable the interested reader to further their knowledge of these questions.

New technologies are changing the landscape of accounting and financial reporting. Data analytics and visualization, FinTech, and BlockChain have all had a significant impact on data gathering and analysis, business processes, and financial transactions. We discuss these technologies and their impact throughout the book where appropriate. We have also created a new appendix at the end of the book, Appendix F, that provides more detailed explanation of Data Analytics and BlockChain. Videos and assignments accompany Appendix F and expose students to Tableau and Excel as two data analytics and visualization tools.

Important Pedagogical Elements

The book applies several pedagogical elements to help readers further understand the ramifications of accounting for business.

Global Perspective boxed inserts emphasize the similarity of U.S. GAAP and IFRS, but they also identify key differences.

Ethics Perspective boxed inserts emphasize ethical decision making, as well as the importance of ethics in accounting. In today’s environment, this information is pertinent to business students and accounting students alike.

Business Perspective boxed inserts illustrate key chapter topics using real-world examples and financial statements.

Tax Perspective boxed inserts highlight select aspects of U.S. tax law and how they differ from generally accepted accounting principles. Executives and MBAs very often are interested in understanding how their decisions affect both financial accounting earnings and the cash flows related to the tax treatment of those same decisions. While this text is clearly focused on the former, high-level overviews of some key tax reporting differences are offered throughout the text. Below is an example related to accounting for investments:

In Practice boxed inserts help bridge the gap between the classroom and what students encounter in the real world. “In Practice” illustrations document situations a reader is likely to encounter and present the choices that companies make in reporting financial results. We also use In Practice inserts to discuss macroeconomic factors that influence financial reporting.

Flexibility for Courses of Varying Lengths

New to the Sixth Edition

This edition of Financial Accounting for Executives & MBAs includes a number of important new features. These include:

• Updated Data and Examples: Incorporates current 10K data and recent news from the business press. Revised the end-of-chapter material to include recent data from well-known and established publicly traded companies.
  
• Enhanced References to Timely Research: Incorporates appropriate descriptions and conclusions from recent academic and practitioner research.
• Simplified and Streamlined Presentation: Revised and simplified the text and added new graphics to make the book more accessible for students lacking a background in accounting. Deepened the explanation of new terms when they are first introduced in the book.
• Updated Financial Ratios: Revised ratio formulas to use standard versions more commonly used in practice.
• Fully Revised and Updated Chapter on Financial Analysis: Uses the most recent Target Corporation financial statements to more fully discuss the framework and methods of financial analysis.
• Discussion of Sustainability: Added a discussion of sustainability and ESG as an appendix to Chapter 1 (includes relevant examples). This section includes a discussion of mandatory climate risk reporting and differing viewpoints on the desirability of “socially responsible” reporting.
• Enhanced for eLearning with myBusinessCourse (MBC):
• Road Maps that open each chapter are organized to facilitate eLearning. Each chapter’s Takeaways are matched with eLecture Videos, Chapter Reviews, and Guided Example Videos to provide students and faculty with a quick guide to the digital assets available with that chapter.
• The number of auto-graded assignments and videos in myBusinessCourse have been increased and expanded in this edition making MBC an ideal complement to hybrid and online courses. MBC is also a robust resource for students in traditional face-to-face courses.
• Data Analytics: In addition to an introduction of data analytics in Chapter 1, the authors have created Appendix F at the back of the book, which includes accounting-specific examples that use data analytics for A/R aging and the detection of fraud with Benford’s Law. The appendix includes:
• World Bank GDP data and actual court data from the State of Arizona v. Wayne James Nelson case.
• Video demonstrations of data analytics performed in both Excel and Tableau.
• Numerous assignments giving students opportunities to perform data analytics in Excel and Tableau.

Supplement Package

For Instructors

Solutions Manual:  Written by the textbook authors, the Solutions Manual provides suggestions for classroom
use and suggested solutions for the end-of-chapter questions, exercises, and problems.

Test Bank:  The test bank provides a full range of mechanical, analytical, and critical thinking problems
for each chapter of the book.

PowerPoint Presentations:  PowerPoint presentations illustrate chapter concepts and help formulate classroom
lectures and presentations.

myBusinessCourse:  A web-based learning and assessment program intended to complement your textbook and classroom instruction. This easy-to-use course management system grades homework automatically and provides students with additional help when you are not available. In addition, detailed diagnostic tools assess class and individual performance. myBusinessCourse is ideal for online courses or traditional face-to-face courses for which you want to offer students more resources to succeed. Assignments with the MBC Homework icon are available in myBusinessCourse. Similarly, eLecture videos with the MBC eLecture icon are available for the chapter Learning Objectives, and Guided Example videos with the MBC Guided Example icon for the in-chapter Reviews are available for students using myBusinessCourse.

For Students

eLectures:  Each chapter’s takeaway includes an eLecture video available in our online learning management
system, myBusinessCourse (see below for more information).

Guided Examples:  Guided Example problems are available for student review.

myBusinessCourse is a web-based learning and assessment program intended to complement your textbook and faculty instruction. This easy-to-use program provides you with additional help when your instructor is not available. Guided Example videos identified with the MBC Guided Example icon are available for nearly all in-chapter Reviews, and eLecture videos identified with the MBC eLecture icon are available for each Learning Objective. Assignments with the MBC Homework icon in the margin are also available and are automatically graded when assigned by the instructor. Access is free with new copies of this textbook. (Look for the page containing the access code toward the front of the book.) If you buy a used copy of the book, you can purchase access at www.mybusinesscourse.com.