Written by Cohan and Johnson in 2011, the article Transferring Classroom Knowledge to Real-World Accounting: The Saving Loans Crisis seeks to determine the extent to which the accounting students apply the concepts and principles of accounting learnt in classroom to real complex situations.
In addressing this, the authors analyze the issues of regulatory accounting principle (RAP) versus generally accepted accounting principle (GAAP) in terms of their implications to saving and loans (S&Ls) in preparation of financial statement. The research was done in a certain university where 170 students, out of which 65 accounting students were experimented to gauge their preferences for the issues. The data obtained showed that RAP and GAAP statements equally confused accounting and other students.
The implication was that, even though accounting students are well versed with the concepts, they do not possess the advance skills required to solve related different problems.
The authors thus advocate that more emphasis on expert learning and problem solving strategies need to be developed by the accounting educators as earlier recommended by some researchers of GAAP (Cohan & Johnson, 2011, p.12). This would result to greater correlation between classroom and professional performance. I have always believed that current world’s challenges can be harmonized by relevant education that equips the learner with the concepts and principles of the subject.
Fortunately, based on the article’s content, the authors make one understand that does do not only need subject concepts but also the knowledge and skills to transfer them to the real life situation. Academics grades should therefore receive meanings in terms of their applicability in the real life situations. Students have to learn to correlate what is taught in class to what is expected of them by the society.
First, I have leant that attending accounting class would be meaningless especially if one has gone through education system but still not able to solve real problems. Student should therefore be put to extensive task of learning both Regulated Accounting Principle (RAP) and General Accepted Accounting Principles (GAAP), which are relevant in solving world current problems and challenges (Cohan & Johnson, 2011, p.19).
Secondly, good grades in academics do not always correlate to good job performance, as accounting students do not have advantage over others without the same knowledge. Further, economic problems arise due to saving and Loans (S&Ls) crisis caused by misappropriation and poor management.
Moreover, if S&L receives a promissory note, then new worth certificate is redeemed and the note withdrawn if it makes the profit and loss respectively. In addition, since the note’s benefit depended on the liquidation of the S&L, it does not qualify as an asset under GAAP. I have acquired new concepts of accounting, which will make me understand major economic crisis and initiate projects towards finding solutions of the issues pertaining to accounting.
Since knowledge is power, I will pass the same information to others so that they grasp these issues on the subject. The site is very rich with the accounting concepts as far GAAP is concerned as well as tools for saving, emailing and printing the information. I am able to get all the relevant information without having to open a new window. The link in the site opens easily and its contents are free from virus. Most importantly is the availability of the reference materials on the site.
I have understood the terminologies used and their implications in the business sector. For instance, GAAP refers to “the set of rules, conventions and standards accountant follow in recording and summarizing transaction and in preparation of financial statement” (Cohan & Johnson, 2011, p. 23). RAP recognizes that financial records are regulated and that some loans are to be deferred contrary to GAAP, which requires immediate recognition of loans.
In addition, GAAP forces institutions to take actions, which do not enhance their value. In comparing RAP and GAAP, I wish to suggest that all can be used together without isolation. Financial statement of GAAP can be doctored, if not regulated. Gains on fixed assets are recognized on condition that the asset is sold unlike the case in RAP. Because subordinated debentures are not liabilities in RAP, it would increase the crisis of S&Ls if used alone.
Reference
Cohan, S., & Johnson, E. (2011). Transferring Classroom Knowledge to Real-World
Accounting: The Saving Loans Crisis. Journal of Education for Business, 67(5), pp. 5-31.