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An exploratory study on the interrelationships in course performance of accounting majors.

INTRODUCTION

With increasing tuition in higher education, academic performance in major courses is of financial importance to students and their families. Academic performance, on the other hand, can also be an effective component in a student's career decision making. Some accounting students may struggle with coursework, and end up regretting their career choice. Thus academic advisors equipped with statistics on the proper characteristics for various majors can better help students. As such, one of the motivations of this paper is to provide more understanding of the interrelationships in course performance of accounting majors.

Previous research indicated that successful accounting students show patterns and traits early in the program. Numerous papers investigated the factors leading to student performance in individual accounting courses, but few studies were directed to the examination of successful completion of degree programs in accounting. This paper provides a comprehensive picture of student grades in multilevel courses, and contributes to the ongoing discussion of accounting curriculum development.

As suggested in the literature (e.g., Al-Twaijry, 2010), a student's grades in low level classes are possibly connected with those in higher level classes. The connections are stronger especially in similar tracks. Likewise, this study investigates the interrelationships among course grades. More specifically, the introductory accounting courses play important roles in the determination of student performance in upper level major courses. Students with weak understanding of the principles and basic concepts of accounting should perhaps seek academic counseling regarding major and career path. Research in this perspective will assist advisors on providing guidance to students in major selection.

LITERATURE REVIEW

Previous literature examines the factors related to student performance in individual courses (e.g., Drennan & Rohde, 2002; Gracia & Jenkins, 2002). Yet studies of accounting program structure on the macro level are limited. Pieces of the big picture were investigated from various angles. Jackling and Andeson (1998) examined Australian students, and suggested that such factors as prior study in accounting (high school), general ability (GPA), gender, and language background all contribute to performance in accounting courses. In a similar vein, Al-Twaijry (2010) used a sample of students in Saudi Arabia and concluded that pre-university ability and general undergraduate academic ability are important elements affecting subsequent performance in managerial accounting. The study also provided evidence that a better performer in lower level accounting courses is more likely to perform well at higher level courses. Furthermore, Maksy (2012) found that GPA is associated with student performance in intermediate accounting. Empirical evidence provided by the study of Maksy and Wagaman (2012) also suggested that GPA is related to student performance in auditing in commuter school.

Prior studies indicated that student performance in major courses is related to the general GPA. Based on prior literature, the hypothesis was developed to examine the association between academic background and performance in accounting courses. Hypothesis 1 is stated as follows:

H1: An accounting major with a higher general Grade Percentage Average (GPA) is more likely to be a better performer in accounting courses.

The second set of hypotheses attempt to examine the association between grades of lower level courses and those of higher level courses. Canlar (1986) provided evidence that college-level accounting knowledge is a significant predictor of student performance in financial accounting course on MBA level. Hill, Stratton, and Edwards (1996) found a strong association between student performance in lower and higher divisions of accounting courses. Al-Twaijry (2010) suggested a strong and positive association between grades in a sequence of managerial accounting courses. Maksy and Zheng (2010) also concluded that student performance in intermediate accounting II and GPA are two important factors positively associated with student performance in Advanced Accounting and Contemporary Financial Accounting issues. Maksy (2012) and Maksy and Wagaman (2012) investigated the factors that would impact student performance in intermediate accounting and auditing, respectively. The findings in the two studies suggested that student performance in Intermediate Accounting I (Intermediate Accounting II) is a strong predictor of students' grades in Intermediate Accounting II (auditing). Research conducted by Baker-Eveleth O'Neill, & Sisodiya (2014) suggested that some courses can be used as "predictors" of student success. The paper also identified accounting principle level courses and business law to be "predictor" courses. The results indicated that poor performers in these classes are four times likely to be poor performers in subsequent classes. (Baker-Eveleth O'Neill, & Sisodiya, 2014). The following hypotheses were developed to test the associations between accounting course grades.

H2.1: An accounting major who performs better in a financial accounting course is more likely to be a better performer in other financial accounting courses.

H2.2: An accounting major who performs better in a managerial accounting course is more likely to be a better performer in other managerial accounting courses.

H2.3: An accounting major who performs better in the introductory accounting courses is more likely to be a better performer in upper stream accounting courses.

A student's qualitative and quantitative background also impacts course performance. Davidson, Slotnick, and Waldman (2000) investigated the association between students' linguistic skills and their problem solving abilities. Their findings provided conflicting evidence, and suggested that linguistic skills were associated with students' ability to solve unstructured problems, but not structured problems (Davidson, Slotnick, & Waldman, 2000). Maksy and Zheng (2010) provided evidence on the correlation between accounting student performance and their abilities of reading and listening. Maksy and Wagaman (2012) found that reading ability that self-reported by students is significantly associated with grades in auditing in commuter school. Hypothesis 3 was developed to examine the effect of linguistic skills on accounting courses requiring more qualitative skills.

H3: An accounting major who demonstrates strong qualitative skills is more likely to be a better performer in upper stream accounting courses in need of those skills.

RESEARCH BACKGROUND

This study was motivated by accounting faculty members' observation and experiences. Student grades in higher level accounting courses can seemingly be predicted by their performance in introductory or intermediate levels of accounting courses. In most situations, these courses at either introductory or intermediate level are served as prerequisites to upstream accounting required courses. An example is that students doing well in the introductory financial accounting class tend to do well in the intermediate accounting class. Similarly, students who can grasp the concepts easily are more likely to perform above peers in an auditing class, which normally involves professional judgment and a heavy discussion in concepts and principles.

Sample and Data Collection

The data for this study were collected from the student information system at a public university located in Midwestern area. The School of Management of the university offers two degrees related to accounting-Bachelor of Science in Management with accounting concentration (B.S. in management) and Bachelor of Science in Accounting (B.S. in accounting). In both programs, Introduction to Financial Accounting, Introduction to Managerial Accounting, Intermediate Accounting I and II, Taxation, are required. Auditing and Advanced Managerial Accounting are only required for B.S. in accounting, and these two courses also serve as major electives for B.S. in management. All accounting students are encouraged to take Legal Foundations of Business. Additionally, all management major students are required to take Business Writing and Strategic Management, offered by the department of management in the school of management. As a general rule, all students are required to complete the required courses with a grade of "C" or better. For students in the degree program of B.S. in management with accounting concentration, a grade of "C" or better is also required for accounting electives.

Most students take Introduction to Financial Accounting in their sophomore year (third semester) and move on to Introduction to Managerial Accounting in the subsequent semester. Meanwhile, students take Business Writing and Legal foundations of Business before they proceed to Intermediate Accounting I, the prerequisite to Intermediate Accounting II. Most students take Taxation and Auditing in senior year, and both courses require Intermediate Accounting II as the prerequisite. Students also consider Advanced Managerial Accounting and the required Strategic Management in the last year of the Bachelor Program.

The courses can be organized into three groups. Three courses, Introduction to Financial Accounting (MGMT 200\ Introduction to Managerial Accounting (MGMT 20V), and Business Writing (MGMT 420) are categorized as level 1. Another group of three courses, Intermediate Accounting I (MGMT 350), Intermediate Accounting II (MGMT 35V), and Legal Foundations of Business (MGMT 354) are included in level 2. Level 3 consists of courses Taxation (MGMT 404), Auditing (MGMT 406), and Advanced Managerial Accounting (MGMT 407). Table 1 illustrates the definitions for variables collected from the student information system.

Due to the limited function of the student information database, the data collection started with the students enrolled in MGMT 404, Taxation. The underlying reason was that all accounting major students are required to take this course, and most accounting majors took this class close to graduation. The dataset includes students enrolled in this course during years 2001 through 2009. Some students were automatically removed from the dataset during the data collection process. Some examples are:

1. Graduate students who took the course as a prerequisite for graduate level courses.

2. Non-degree seekers who took the course for career enhancement, or for qualifications to sit for the CPA exam.

3. Students who completed the degree program other than accounting major. For instance, some students completing their degrees in Finance took the taxation class as an elective.

4. Accounting majors who did not graduate at the time of data collection.

5. Transfer students who took the introductory level accounting courses in other institutions.

Some students in the program of B.S. in management selected not to take MGMT 406 Auditing or MGMT 407 Advanced Managerial Accounting. These students were excluded from data analysis. Missing values were also removed during data cleaning processes.

Table 2 shows the descriptive statistics of demographic variables (not tabulated) show that the dataset contains 237 observations. Of the total observations, there are 144 female students, and 93 male students, accounting for 60.8% and 39.2% of the dataset, respectively. Also, there are dominantly 233 (98.3%) domestic students and 4 (1.7%) international students. The results also show that among the graduates, 195 students graduated in their 20s, 31 in the 30s, and 6 and 5 in the 40s and 50s. In particular, students graduating in ages of 23 and 24, account for 21.5% and 16% of the sample. The statistics are consistent with the report of the school as a whole that students tend to take up part time job or internship while finishing the Bachelors' degree. Some students reduced course load and attended school part time in junior or senior years.

REGRESSION ANALYSES AND DISCUSSION OF RESULTS

As shown in Table 2, the finalized dataset contains a total of 237 observations of accounting major graduates from years 2001 to 2010. The number does not represent the total of accounting majors graduating during the period of time (e.g., transfer students were not included in the dataset because of inconsistency of their transferred credits in accounting courses. Additionally, z-scores of the variables generated from the standardization process were used in empirical tests to generalize score interpretation.

HI: An accounting major with a higher general Grade Percentage Average (GPA) would be more likely to be a better performer in accounting courses.

The hypothesis with respect to the association between GPA and student performance in accounting courses was tested by the model using "All-acc" (the GPA of all accounting courses) as the dependent variable, and "GPA" as the predictor. The results illustrated in Table 3A indicated that the R-square of the regression model is .743. The predictor "GPA" is statistically significant with the p-value equal to .000. Evidence suggested that hypothesis 1 was supported.

H2.1: An accounting major who performs better in a financial accounting course would be more likely to be a better performer in other financial accounting courses.

H2.2: An accounting major who performs better in a managerial accounting course would be more likely to be a better performer in other managerial accounting courses.

The results of Models 2.1-1 and 2.1-2 in Table 3B showed that student performance in MGMT 200 Introduction to financial accounting is a statistically significant predictor of course grades in MGMT 350 Intermediate Accounting I (p-value = .000; coefficient=.458) and MGMT 351 Intermediate Accounting II (p-value = .000; coefficient = .335), respectively. Model 2.2 also suggested that course grades in MGMT 201 introduction to managerial accounting are positively associated with those in MGMT 407 the advanced managerial accounting (p-value = .000; coefficient = .315). Both H2.1 and H2.2 were supported by empirical results.

H2.3: An accounting major who performs better in the introductory accounting courses would be more likely to be a better performer in upper stream accounting courses.

Three sets of regression models were used to test H2.3 on the association between course grades in each of the three 400 level courses (Taxation, Auditing, and Advanced Managerial Accounting) and the introductory and intermediate level courses (introduction to Financial Accounting, introduction to Managerial Accounting, Intermediate Accounting I, and Intermediate Accounting II). Additionally, three regression models were included in each set of the regression models, with independent variables being the two introductory courses, the two intermediate level courses, and all four of the courses (introductory and intermediate level courses).

In the regression models with MGMT 404 Taxation as the dependent variable, the introductory and intermediate level regression models (Models 2.3-1 A and 2.3-1 B) indicated that course grades in MGMT 201 Introduction to Managerial Accounting, MGMT 350 Intermediate Accounting I, and MGMT 351 Intermediate Accounting II are significantly associated with the course grades in MGMT 404 Taxation. The overall model (Model 2.3-1 C) corroborated the results from previous models by showing that all independent variables, except course grades in MGMT 200 Introduction to Financial Accounting, are significant predictors. In the regression models with MGMT 406 Auditing as the dependent variable, course grades in MGMT 200 Introduction to Financial Accounting and MGMT 350 Intermediate Accounting I are consistent and significant predictors of course grades in MGMT 406 Auditing. In the regression models predicting students' performance in MGMT 407 Advanced Managerial Accounting, course grades in MGMT 350 and MGMT 351 are consistently significant predictors in both intermediate level and overall regression models. In summary, the empirical results testing H2.3 produced mixed results.

H3: An accounting major who demonstrates strong qualitative skills would be more likely to be a better performer in upper stream accounting courses in need of those skills.

Hypothesis 3 was tested using three sets of models. As illustrated in Table 3C, course performance in ENGL 420 Business Writing is a significant predictor in the series of regression models with each of the variables representing course grades in MGMT 354 Legal Foundations of Business, MGMT 404 Taxation, MGMT 406 Auditing, and MGMT 407 Advanced Managerial Accounting as dependent variables. Similarly, Course grades in MGMT 354 Legal Foundations of Business are significantly association with those in MGMT 404 Taxation, MGMT 406 Auditing, and MGMT 407 Advanced Managerial Accounting. H3 was supported by empirical results.

LIMITATIONS OF THE STUDY

The study is subject to several limitations. To simulate the data available to advisors, the research only used the data collected from student record system. Other factors that may influence student performance were not discussed. The study may be extended to include subjective attributes that may impact student performance. While objective measurements can provide useful information, advisors should use professional judgment, and approach each student on a case-by-case basis.

CONCLUDING REMARKS

Empirical evidence suggested that an accounting student with a higher General Grade Percentage Average (GPA), a proxy for learning abilities, is more likely to be a better performer in accounting courses. Also, accounting students who receive higher grades in introductory financial (managerial) accounting courses tend to perform better in intermediate financial (managerial) accounting courses. The effect of performance in introductory and intermediate level accounting courses on that in higher level accounting courses is mixed. On the other hand, Intermediate Accounting I is found to be a consistent predictor of student performance in upstream accounting courses, including taxation, auditing, and advanced managerial accounting. The conflicting results can be explained by the between-courses lag indicated in Hill, Stratton, & Edwards (1996). The consistent effect of Intermediate Accounting I provided further evidence in this regard, and also suggested that course performance in Intermediate Accounting I can be used to predict student success in academic work, and even professional development in accounting.

The examination of the effect of qualitative skills indicated that either Business Writing or Legal Foundations of Business alone is a significant predictor of student performance in 400 level courses. A closer examination in the models revealed that the coefficients of Business Writing decreased with the presence of Legal Foundations of Business, suggesting a possible mediation effect from the grades in Legal Foundations of Business.

Findings of this study have potential benefits. First, the study enhances the understanding of the factors underneath student performance in accounting courses. Second, the quantitative evidence sheds light on the inherent connections among course grades of accounting required courses. The objective measures may serve as an instrument for academic advisors to guide students in selecting a proper major. For instance, a student who has trouble with Accounting I, an important predictor course in accounting program, may be advised to reconsider the decision to major in accounting. Third, the study provides reflective thoughts on curriculum development for accounting faculty. Introduction level of financial accounting and managerial accounting are the first two major courses in plan of study for accounting students. Thus most students take intermediate accounting I right after introduction to managerial accounting. The one semester lag sometimes leads to instructor's spending valuable lecture time to review concepts covered in the introductory financial accounting course. Accounting faculty may consider some flexibility in the execution of the plan of study to facilitate learning process.

REFERENCES

Al-Twaijry, A. A. (2010). Student academic performance in undergraduate managerial accounting courses. Journal of Education for Business, 85, 311-322.

Baker-Eveleth, L. J., O'Neil, M., & Sisodiya, S. R. (2014). The role of predictor courses and teams on individual student success. Journal of Education for Business, 89, 59-70.

Canlar, M. (1986). College-level exposure to accounting study and its effect on student performance in the first MBA-level financial accounting course. Issues in Accounting Education, 1, 13-23.

Davidson, R. A., Slotnick, S. A., & Waldman, D. A. (2000). Using linguistic performance to measure problem-solving. AccoUnting Education, 9, 53-66.

Drennan, L. G., & Rohde, F. H. (2002). Determinants of performance in advanced undergraduate management accounting: an empirical investigation. Accounting and Finance, 42, 27-40.

Gracia, L., & Jenkins, E. (2002). An exploration of student failure on an undergraduate accounting programme of study. Accounting Education, 11, 93-107.

Hill, M. C., Stratton, R., & Edwards, J. D. (1996). Transfer of learning in the introductory accounting course sequence. Accounting Educators' Journal, 8 (1), 27-50.

Jackling, B., & Anderson, A. (1998). Study mode, general ability and performance in accounting. Accounting Education: an International Journal, 7(1), 65-73.

Maksy, M. M. (2012). Motivation and distraction factors associated with student performance in intermediate accounting: an empirical investigation. Journal of Accounting & Finance, 12 (3), 188-208.

Maksy, M. M., & Wagaman, D. D. (2012). Factors associated with student performance in auditing: a comparative study in commuter and residential schools. Journal of Accounting & Finance, 12(2), 120-141.

Maksy, M. M., & Zheng, L. (2010). Factors associated with student performance in advanced accounting and contemporary financial accounting issues: an empirical study in a commuter university. Journal of Accounting, Ethics, & Public Policy, 11(3), 317-339.

Songtao Mo

Elaine Waples

Purdue University Calumet

Songtao Mo is an Associate Professor of Accounting in the College of Business at Purdue University Calumet. Her research focuses on business education, financial reporting, and auditing. Her teaching interests include auditing and financial accounting.

Elaine Waples is Professor Emerita of Accounting at Purdue University Calumet where she taught a variety of accounting classes and conducted research in accounting education and ethics.
Table 1 Variable Definition

Variable    Variable   Variable Definition
            Type

GPA         Numeric    The grade point average over all courses.
Grades in   Numeric    A=4; B=3; C=2; D=1; F=0.
courses

Table 2 Descriptive Statistic-Course Performance

              N         Mean      Std. Dev     Skewnes
                                                          Std.
          Statistic   Statistic   Statistic   Statistic   Error

Hours        237       134.899     14.545       3.663     0.158
GPA          237        3.179       0.459      -0.027     0.158
English      237        3.329       0.760      -0.925     0.158
M200         237        3.253       0.815      -0.497     0.158
M201         237        3.013       0.805      -0.170     0.158
M350         237        2.810       0.788       0.350     0.158
M351         237        2.928       0.797       0.129     0.158
M354         237        3.101       0.872      -0.469     0.158
M404         237        2.835       0.772       0.292     0.158
M406         237        3.278       0.929      -1.734     0.158
M407         237        2.709       1.019      -0.822     0.158
All_acc      237        2.991       0.576       0.059     0.158

          Kurtosis
                      Std.
          Statistic   Error

Hours     21.955      0.315
GPA       -0.884      0.315
English   0.293       0.315
M200      -1.321      0.315
M201      -1.074      0.315
M350      -1.307      0.315
M351      -1.412      0.315
M354      -0.723      0.315
M404      -1.266      0.315
M406      3.595       0.315
M407      0.780       0.315
All_acc   -0.942      0.315

Notes: ENGL 420: Business Writing MGMT
200: Introduction to Financial Accounting
MGMT 201: Introduction to Managerial Accounting
MGMT 350: Intermediate Accounting I
MGMT 351: Intermediate Accounting II
MGMT 354: Legal Foundations for Business
MGMT 404: Taxation MGMT 406: Auditing
MMGT 407: Advanced Managerial Accounting
All_acc: GPA for Accounting courses

Table 3 A Empirical Results--Hypothesis -1

Model Dependent   Predictor(s)   R-square   Coefficient   p-value
Variable

1. All-acc            GPA          .743        .862        .000

Table 3B Empirical Results-Hypothesis-2

Model     Dependent   Predictor   R-square   Coefficient   p-value
          Variable       (s)

2.1-1       M350        M200        .210        .458        .000
2.1-2       M351        M200        .112        .335        .000

2.2         M407        M201        .099        .315        .000

2.3-1 A     M404        M200        .214        .100        .116
                        M201                    .413        .000
2.3-1 B     M404        M350        .421        .383        .000
                        M351                    .341        .000
2.3-1 C     M404        M200        .442        -.064       .263
                        M201                    .170        .005
                        M350                    .353        .000
                        M351                    .303        .000
2.3-2 A     M406        M200        .085        .221        .001
                        M201                    .120        .080
2.2-2 B     M406        M350        .120        .321        .000
                        M351                    .038        .619

2.2-2 C     M406        M200        .136        .137        .055
                        M201                    .015        .796
                        M350                    .261        .002
                        M351                    .024        .789

2.3-3 A     M407        M200        .101        .051        .455
                        M201                    .294        .000
2.3-3 B     M407        M350        .231        .246        .001
                        M351                    .289        .001
2.3-3 C     M407        M200        .240        -.072       .277
                        M201                    .104        .134
                        M350                    .241        .002
                        M351                    .269        .000

Table 3C Empirical Results-Hypothesis -3

Model   Dependent   Predictor(s)   R-square   Coefficient   p-value
        Variable

3-1 A     M354          E420         .138        .371        .000
3-1 B     M404          E420         .130        .360        .000
3-1 C     M406          E420         .021        .146        .025
3-1 D     M407          E420         .047        .291        .001

3-2 A     M404          M354         .167        .409        .000
3-2 B     M406          M354         .113        .336        .000
3-2 C     M407          M354         .082        .286        .000

3-3 A     M404          E420         .217        .241        .000
                        M354                     .319        .000
3-3 B     M406          E420         .114        .024        .716
                        M354                     .327        .000
3-3 C     M407          E420         .096        .129        .055
                        M354                     .238        .000
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Author:Mo, Songtao; Waples, Elaine
Publication:International Journal of Education Research (IJER)
Article Type:Report
Date:Sep 22, 2015
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