22. Using Accounting
Information to Support a Business Position
Presenter: Gary Siegel, DePaul University
Description: Over the past
few years I have successfully used a case that accomplishes several objectives.
Here are the learning outcomes:
- Better understanding of joint
cost
- Better understanding of the
arbitrary nature of cost allocation
- Students work in teams
- Builds communication
skills-especially persuasive skills
- Students learn to use accounting
information to support or oppose a business decision, position, or
proposal
- Students motivated to look beyond
accounting sources to support their position or oppose a different
position
- Anticipate how competing groups or
organizations may interpret data
The Case. A refinery produces
three joint products. Because of a terrorist incident, one of the products
cannot be sold. The taxing authority rules that all products, sold or unsold,
must be included in computing tax and that the physical quantity method of
allocation must be used.
The Assignment. (4-6 students
on a team)
The class. You
are the court of appeals. Team A will present its case first. Fifteen-minute
limit. Then Team B will have 15 minutes. Teams A and B will have time to rebut
each other. Then the court of appeals will ask questions and vote.
Team A. You are the Brain
Trust Consulting Firm, Inc. You have been hired by the taxation authorities to
justify the new rule for determining the tax due. Use the information in the
problem (and other sources) to make your case.
Team B. You are Hotshot
Consultants and Corporate Fixers, Inc. You have been hired by the corporation
to convince the court of appeals that the taxation authority has erred in
promulgating the new rule, and to present a more equitable rule for determining
the tax due. Use the information in the problem (and other sources) to make
your case.
Result: Students enjoy the
exercise. They bring in pictures of oil-soaked birds, corporate statistics,
employment data, etc., to make their case.
Adaptability. This approach
can be used for any problem where there are different ways of interpreting
accounting information.
