Tuesday, April 17, 2012


This blog went over 50,000 views a few days ago. Obviously, no one would have ever heard of this blog over the past 27 months if it weren’t for people like you who have spread the word. First, I want to thank you from the bottom of my heart. I cannot tell you how very much I appreciate your helping out by telling other people about my writings.

Second, I’d like to ask you for a very personal favor. The second edition of my Financial Accounting textbook that I wrote with C. J. Skender (of UNC) came out today. (Today!!!!) I feel like I just experienced the birth of another child. I thought the first edition was good but I honestly think the second edition is great. It approaches the introduction of financial accounting differently because it is written in a Socratic Method style. It is the book that I have always wanted to write and I am thrilled with it. It covers what I think college students should learn in an introductory course. And, although I am obviously biased, I like to think it is written in an interesting and engaging style – using hundreds of real world examples.

After 41 years, I know two things for sure: (1) faculty members are often very critical of textbooks and (2) faculty members rarely change textbooks. I hear a lot of excuses for the tendency to stick with a textbook even if it is hated by all involved (the teacher and the students). I think adopting a bad textbook semester after semester is an awful educational practice, one that can only cause students to suffer.

Textbooks will never get better if professors aren’t open to new alternatives. That’s how the market system is supposed to work. Without real competition for adoptions, the products grow stale and stop being innovative.

Okay, so here’s the favor I am asking. If you teach financial accounting at a two-year or four-year college or in an MBA program, request a copy of the second edition of our Financial Accounting textbook and read one chapter. That’s all I ask. Don’t believe me. Heck, I’m biased. Read the buildings and equipment chapter (chapter 10) or the investments chapter (chapter 12) or the accounts receivable chapter (chapter 7). Or read the very first chapter where we talk about why learning financial accounting is important. Pretend you are a 19 year old college student. Could you read this book and understand it? Is it interesting? Does it cover what you want to teach?

Or, if you don’t teach financial accounting, if you know someone who does teach that course, forward this note to them. The book is published by Flat World Knowledge so the students get to use the book online for free. Yes, the students don’t pay $250 for this textbook. They can use the book online from day one for free. Why have them pay $250 for a book you hate and they hate?

Anyone who would like to receive a copy for adoption consideration should send a note to Becky Knauer at faculty@flatworldknowledge.com. It’s easy and quick. Be a wise decision maker – look at the alternatives.

And, in case you are interested, here is how the book opens. This sample provides a pretty good picture of the whole book. My goal was to catch the students’ attention right from the start and try to stimulate their curiosity. And, maybe most importantly, I wanted to push the real world into the students’ laps.

Question: In the June 30, 2011, edition of The Wall Street Journal, numerous headlines described the recent activities of various business organizations. Here are just a few:

“TMX and LSE Give Up on Planned Merger”

“Ally Financial Faces Charge for Mortgage Losses”

“HomeAway Jumps 49% in Debut”

“Ad-Seller Acquiring Myspace for a Song”

Millions of individuals around the world read such stories each day with rapt interest. From teen-agers to elderly billionaires, this type of information is analyzed obsessively. How are these people able to understand all the data and details being provided? For most, the secret is straightforward: a strong knowledge of financial accounting.

This textbook provides an introduction to financial accounting. A logical place to begin such an exploration is to ask the obvious question: What is financial accounting?

Answer: In simplest terms, financial accounting is the communication of information about a business or other type of organization (such as a charity or government) so that individuals can assess its financial health and future prospects. No single word is more relevant to financial accounting than “information.”

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