Arithmetical Reasoning Skills as a Predictor of Success in Principles of Accounting

Abstract

INTRODUCTION Faculty who teach principles of accounting courses often lament the apparent lack of basic computational skills by students in the classroom. This research tests whether a student's arithmetic reasoning skills can accurately predict performance in the first principles of accounting course. Arithmetic reasoning, also referred to as quantitative skills or mathematical skills, is defined as the ability to quickly and accurately manipulate numbers and grasp interrelationships between numbers. It includes the ability to perform basic arithmetic operations such as fractions, decimals, percentages, addition, subtraction, multiplication, division and simple algebraic calculations. For many students, the principles of accounting course determines whether to consider accounting as a career so factors that affect success in the course will affect the types of students attracted to the accounting profession. If good arithmetical skills are a determinant of success in introductory accounting then identifying students with strong mathematical skills early in their college careers might help departments attract more undeclared majors into accounting and offset the declining interest in accounting as a major that has been experienced over the past 20 years (Fedoryshyn & Hintz, 2000). However, if arithmetical reasoning skills are not important to success in introductory accounting, departments may reconsider the types of students they attempt to attract to the program. BACKGROUND Prior research has attempted to identify factors that determine success in a principle of accounting course. Doran, Bouillon, and Smith (1991) focused on incoming measures of academic aptitudes and found that GPA and standardized test scores predict success in accounting courses. Tyson (1989) found that gender differences played a significant role in explaining performance differences in introductory accounting courses, with female students outperforming male students. However, another study by Bouillon and Doran (1992) found that males significantly outperformed females in the first introductory course. A recent study by Kealey, Holland, and Watson (2005) indicate that critical thinking skills help explain variations in student performance in principles of accounting. Prior studies have examined the relationship between quantitative abilities and erformance in accounting courses although these studies have usually focused on performance in specific math courses to explain the results. Gist, Goedde, and Ward, (1996) conducted research on the influence of mathematical skills on the performance of minority students in principles of accounting. They found that B or better performance in a Calculus class was critically related to successful performance of Black students in accounting coursework. Collier and McGowan (1989) examined the connection between student performance in algebra and the ability to successfully complete Intermediate Accounting I and found that better performance in mathematics increased the success rate in Intermediate Accounting I. However, Burdick and Schwartz (1982) did not find that mathematics, algebra or calculus grades were good predictors of performance in Intermediate Accounting courses. Clark and Sweeney (1985) found that college mathematics grades were a good predictor of success in accounting and Shotweel (1999) identified a self-professed affinity for mathematics as one of the factors resulting in improved performance in financial accounting. This research uses a pre-test to assess a student's quantitative skill and predict success in itroductory accounting rather than focusing on performance in a specific mathematics course to predict success. If better mathematical computational skills result in better performance in the principle of acounting course then decisions can be made about appropriate prerequisites for the course. Kealey et al. (2005) note that a review of prerequisites for principles of accounting courses at over 50 medium to large public institutions show more than one-third have no prerequisites and among the others a common prerequisite was completion of an algebra course. …

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