My Teaching Method

I have been teaching college as an adjunct since 1976, though not consecutively. I have taught fourteen different courses at three universities (and taught most of these courses multiple times). Additionally, I received an innovative teaching award, so I could consider myself an experienced educator. Now to my point.

There are many different teaching methods. Some follow the textbook religiously, some teach using projects, and some relate the curriculum to real-world situations. I have used all three methods depending on the course. I used the first two methods one time each and the real-world situations method the other times.

I prefer the real-world situations method, and I explain why in this blog. The goal of each course is for students to learn the material and then be able to use it when confronted with situations that call on them to make a decision, solve problems or supplement the team working toward a solution. This requires the students to understand what they learned and how and when it can be applied, integrated and juxtapositioned to make decisions or create solutions. This then establishes a reservoir of experiences that could be drawn upon to better serve their employers, clients, or themselves.

This Friday, I will start a new semester teaching the introductory course in financial accounting at Baruch College, my alma mater. About 60% of the students are split between accounting and finance majors. The balance is divided among economics, international business, management, marketing, finance, computer information systems, actuarial science majors and a few minors. This course has a clear objective – introducing the students to financial accounting, the accounting cycle, fundamental accounting concepts for business transactions, and preparing and analyzing financial statements. More importantly, the course aims to teach students how to use accounting information in various economic decision-making contexts. Financial accounting produces financial statements primarily serving external decision-makers, such as investors, financial analysts, creditors, and government agencies. Financial statements are the means of communicating information about a company that stakeholders and decision-makers need to consider before making one of many different types of commitments to a company.

Specifically, financial statements present the financial position of a company, the results of its operations, its cash flows, and changes in its ownership equity. They also include certain income or costs not included in its operations. Then, there are the ground rules that these statements follow, called GAAP (generally accepted accounting principles), and a report of an independent accounting firm to provide assurance that the statements are pretty much “OK” under the GAAP rules. The pages with numbers include a section called ‘notes to financial statements‘, that are six or seven times more voluminous than the five statements with numbers.

A funny thing is that students who say they want to be accountants remark that the reason is that they are good with numbers, while most people who say they do not want to be accountants claim they are not good with numbers. Yet a 40-page financial statement comprises five pages of numbers and 35 pages of words!

The notes to financial statements are not footnotes, subservient or peripheral to the numbers, but an integral part of the financial statements. They are important. Considerable space is needed to explain which of the GAAP rules are being followed and to include information that some of the one-line captions on the five pages with numbers cannot fully provide.

My students will learn using actual financial statements of their choosing. There will be 74 students, and I estimate they will choose about 30 different company reports. My students will refer to their selected reports as each part of the statement is taught. They will realize that what they are being taught is real stuff. Since there will be so many different reports, there will be differences, and they will learn the reasons for them. They should develop a thorough understanding of the issues involved, the underlying reasons and benefits for the company’s choices, and how a prospective investor or creditor would react to those differences to make their decisions. Further, by using public company reports, they will learn from the most current and up-to-date information.

My discussions will encompass all sections of each of the five statements, and many of the line items in those statements. Students will also learn to analyze the statements, apply a dozen key ratios, and learn the purposes of each ratio. They will also learn about the ‘two sets of books’ every company has and whether it benefitted by paying less tax or was hurt by prepaying added tax. An example is the $20 billion loss incurred by a Dow Jones Industrial Average company that wiped out its stockholders’ equity when the 2017 tax law went into effect with its corporate tax rate cut, and the $35 billion tax gain by one of the top 10 companies in the S&P 500 Index.

My opening class session will provide a detailed overview of the entire financial statement, and students will read about GAAP differences in the notes on financial statements. I will also illustrate a profit, breakeven, and loss from the same set of facts, depending on which GAAP choice the company selects. There will be much more. The class will be 3¾ hours, and there will not be any period where my students are bored!

My motive in the first and every session will be to excite, interest, motivate, and teach students. I guarantee they will love this course and walk away with information and skills they will use for the rest of their lives, regardless of their major and where their careers take them. They will understand the important tools and uses of finance and financial statements.