ISSUES IN ACCOUNTING EDUCATION
Vol. 27, No. 2
2012
pp. 419–440
American Accounting Association
DOI: 10.2308/iace-50128
Avondale Estates: A Case Study in
Governmental Accounting and
Auditing—A Historical Approach
Donald L. Ariail, Joe Durden, Marilynn Leathart,
and Lynette Chapman-Vasill
ABSTRACT: The 82 years of accounting evolution that separate the audits of 1928 and
2009 under different accounting and auditing standards are examined through a crossdisciplined case study that compares the historical 1928 and the contemporary 2009
financial statements and the accompanying audit reports of Avondale Estates, Georgia.
The 1928 and 2009 reports and financial statements of this municipality, along with the
municipality’s current budget information accessible over the Internet, can be used in a
number of ways to enhance the instruction of governmental accounting at the
undergraduate, graduate, and doctoral levels. In addition to aiding in the teaching of
current governmental accounting standards, the case also can be used to give the
student a historical perspective on governmental accounting and the accounting
profession. By comparing the accounting and reporting standards used in 1928 and
2009, the student will gain an understanding of the evolution of accounting thought.
Moreover, the auditors’ reports for the two periods illustrate the historical and continuing
public service role of the CPA profession as detailed in ET Section 53 of the AICPA
Professional Standards (AICPA 2010). Thus, this case study gives the accounting
instructor a useful vehicle for teaching accounting history and thought.
Keywords: governmental; history; teaching; municipal; stewardship; ethics; case study;
standards; GASB 34.
CASE INTRODUCTION
A
Certified Public Accountant (CPA) has audited the financial statements of the City of
Avondale Estates and has just completed the 2009 audit of this small municipality near
Atlanta, Georgia. Due to his interest in accounting history, he has visited the recently
opened City Archives to search for pre-Governmental Accounting Standards Board (GASB) audit
reports. Having found a box marked ‘‘Audits,’’ he is surprised and delighted to find the city’s first
Donald L. Ariail is an Associate Professor at Southern Polytechnic State University, Joe Durden is a
Practicing Certified Public Accountant and Doctoral Candidate at Nova Southeastern University, Marilynn
Leathart is an Associate Professor at Concordia University of Texas, and Lynette Chapman-Vasill is a
Lecturer at Texas A&M University–San Antonio.
Supplemental materials can be accessed by clicking the links in Appendix B.
Published Online: January 2012
419
Ariail, Durden, Leathart, and Chapman-Vasill
420
audited financial statements dated December 31, 1928 (Appendix A). Once back in his office with a
copy of the old audit, he proceeds to compare the auditor’s report and financial statements from
1928 to the 2009 report and statements (see Student Resources). While he notes some similarities
between the two sets of records, he also finds many differences.
Background
The City of Avondale Estates was founded in 1893 as the unincorporated town of Ingleside. By
1895, the young community was described in the Atlanta Journal and Constitution as ‘‘the liveliest
village of the Piedmont . . . a little town of lively residents with all the comforts and conveniences
which create an ideal home, away from the busy marts of trade.’’ In addition to its proximity (about
seven miles) and easy access to Atlanta, Ingleside also benefited from its location on major
thoroughfares to the Georgia cities of Augusta and Stone Mountain (City of Avondale Estates
2006).
In 1924, George F. Willis acquired approximately 1,400 acres of land (including most of the
Ingleside community) on which to develop his vision of ‘‘a model suburb with extensive residential,
commercial, and recreational components.’’ Prior to implementing his plan, Willis visited
successful suburban communities in other regions of the U.S. With the ideas gained from his tour
and the assistance provided by prominent engineering and landscape professionals, construction
began on what became the first planned new community in the Southeastern U.S. (City of Avondale
Estates 2006).
The year of 1926 brought completion of about 50 homes, commercial buildings, and a
substantial portion of the city’s infrastructure: roads, park, pool, tennis courts, and playground. In
January 1928 the city was incorporated ‘‘and thus became rare among suburban developments by
having its own municipal government.’’ Later that year, the city’s focal point of Lake Avondale was
completed, and the construction of a boathouse and clubhouse was begun. Prior to the onset of the
Great Depression, an additional 75 homes were completed. Construction in the community slowed
during the 1930s and came to a halt during the Second World War. After the war, the city’s
completion followed the general standards established by Willis (City of Avondale Estates 2006).
Recognition of the city’s historical significance was obtained in December 1986 with the listing
of the Avondale Estates Historic District in the National Register of Historic Places. As of 2006, the
city was a bustling community of 2,600 residents. Current municipal initiatives include the
development of a Downtown Master Plan for new residential and retail construction, the
development of a Lake Master Plan for continued maintenance and improvements to Lake
Avondale, and plans for improving the community’s law enforcement services. In addition, the city
is developing a new zoning ordinance that will allow it to continue to flourish while maintaining the
charm that has always been an integral component of this community (City of Avondale Estates
2009).
Questions
1.
2.
3.
4.
5.
What are the differences and similarities between the auditors’ reports in 1928 and 2009?
What are the differences and similarities between the 1928 financial statements and the
2009 Comprehensive Annual Financial Report (CAFR)?
What changes in the reporting requirements for municipalities have taken place since
1928?
Was the audit in 1928 performed by a CPA?
The auditors in 1928 and 2009 performed a public service by reporting on the stewardship
of Avondale Estates’ management. How has the accounting profession developed side-byIssues in Accounting Education
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side with the development of the concept of stewardship? Provide a historical perspective
of this development.
Tasks
1.
2.
Revise the 1928 auditor’s report using 2009 Yellow Book standards.
Revise the 1928 Financial Statements using 2009 GASB No. 34 standards (i.e., prepare a
1928 CAFR).
Student Resources
The 2009 auditor’s report and CAFR for Avondale Estates are accessible at: http://www.
audits.ga.gov/rsaAudits/searchOptions.aud. Under the pull-down menu select 2009, then
select ‘‘Key Word,’’ type ‘‘City of Avondale Estates,’’ and hit the search key. This will list
the 2009 City of Avondale Estates audit report.
The State of Georgia Guidelines for municipal financial statements and auditor reports of the
Georgia Department of Audits are accessible at: http://www.audits.ga.gov/NALGAD/
resource.html. Scroll down the page to ‘‘Local Government Audit Office Review Checklist’’
and click on the link to download.
The Yellow Book standards for CAFRs are available at the GAO—Comptroller of the
United States website: http://www.gao.gov/govaud/ybk01.htm
The current budget of Avondale Estates, Georgia is accessible at: http://avondaleestates.org/
GASB 34 information can be obtained at: http://www.gasb.org/repmodel/index.html
The Government Finance Officers Association, Certificate of Achievement for Excellence in
Financial Reporting, General Purpose Preparer Checklist is accessible at: www.gfoa.org
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CASE LEARNING OBJECTIVES AND IMPLEMENTATION GUIDANCE
Case Overview
The City of Avondale Estates is a small municipality located near Atlanta, Georgia. We use the
financial statements and the auditors’ reports from 1928 and 2009 to present a case study for use in
the teaching of governmental accounting courses at both the undergraduate and graduate levels.
Utilization of the case involves comparing and contrasting the two sets of financial statements and
auditors’ reports, and/or restating the 1928 financial statements and auditor’s report using
contemporary GASB and audit reporting standards.
The 1928 historical documents and 2009 contemporary documents are the subject matter of the
case and provide information necessary for the identification of similarities and differences.
Suggestions are provided for incorporating the historical aspects surrounding the financial
statements and audit reports into governmental accounting courses. Ideas are provided for utilizing
the case in courses at both the undergraduate and graduate levels and for turning the case study into
a group project. Instructor resources are included consisting of governmental accounting, historical
accounting, and auditing resources.
The authors believe that the case can enrich a student’s learning experience by supplementing
the material traditionally covered in governmental accounting. Governmental accounting textbooks
are often preparer oriented, covering for the most part accounting standards for fund and entitywide reporting. Most assignments, including comprehensive practice sets, cover journal entries and
financial statement presentation, with some attention to budget preparation. Scant attention is given
to the professional aspects of auditing, and the presentation of authoritative sources for standards is
often confusing. No attention is given to the historical development of governmental accounting
standards; research projects and cases (Lowensohn and Reck 2005) are few to nonexistent.
Instructors are interested in course activities that engage the students’ interest, activities such as our
case that are based on real-world situations. Instructors are also looking for cases such as ours in
which students must apply their knowledge from other courses such as auditing. Our case also
appeals to instructors interested in teaching accounting in a wider liberal arts context of history,
regulation, ethics, and research.
The desirability of accounting history being included in the curriculum has been addressed in
the literature since at least the 1980s (e.g., AAA 1986; Zeff 1989; Arthur Andersen et al. 1989). In
the decade of the 1990s, researchers continued to stress this needed change in pedagogy. In 1990,
The Accounting Education Change Commission recommended that the accounting curriculum
should address the history of the profession and accounting thought. Integrating a historical context
in the study of taxation was emphasized by Samson (1997, 83), who stated that ‘‘by examining past
periods, the impact of proposed tax changes can be evaluated with some accuracy, since many of
the ‘new ideas’ have antecedents in the past.’’ More recently, in the decade of the 2000s, accounting
researchers continue to stress the need for accounting education to include a historical context. For
example, Sangster et al. (2007, 455) suggest that recent accounting scandals illustrate the need to
‘‘resist teaching accounting as a technical subject devoid of context’’—a ‘‘contextual vacuum’’ that
does not include the important aspect of history. All former presidents of the Academy of
Accounting Historians state that ‘‘accounting research, shared with students either through lecture
or assignment, informs students about the changing environment and behavior that influences
accounting action’’ (Previts et al. 2006, 17). Further, they list the following benefits to be derived
from integrating history into accounting courses (Previts et al. 2006, 18–19):
1. History presents a foundation for understanding the evolution and background of
accounting concepts and fundamentals.
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2. A knowledge of the past has the potential to illuminate and improve our understanding of
the present, to explain the current complex and often contradictory rules of financial and tax
accounting.
3. History prepares students to accept change as a condition of human experience. Simply put,
students are better prepared to anticipate and expect change.
4. Historical consideration can make accounting more interdisciplinary. It is through
accounting history that economics, political science, technological innovations, cultural
and social change, and events can be related to accounting.
5. A final reason for integrating research into accounting courses is that it adds excitement.
Student interest can be stirred [for example] when they discover that the Pilgrims had
financial difficulties, and that an auditor was sent to audit the Pilgrims’ books. Audits (and
audit failures) came over to America on the Mayflower; so Enron, Worldcom, and
HealthSouth are in a way the most recent continuum of four centuries of the American
capital market system’s approach to addressing the pricing and allocation of scarce
resources.
Last, the International Federation of Accountants, in its International Accounting Standard 2,
Content of Professional Accounting Education Programs (IFAC 2010, 42), lists the ‘‘history of the
accountancy profession and accounting thought’’ as one of the important knowledge areas for
students earning an accounting degree.
Despite research advocacy for integrating history into the accounting curriculum, research
suggests that accounting professors have not yet embraced the researcher’s call for integrating
history into the curriculum. This lack of application of a historical context in current accounting
instruction is illustrated by the results of two studies. In a survey of accounting professors teaching
introductory accounting courses, Santina and Schwartz (2002, 200) found that ‘‘most respondents
agreed that there was no time to include accounting history topics.’’ Armitage’s (2008, 950) survey
of the importance given by accounting professors to 41 topics in auditing education during the
period from 2000–2005 found ‘‘the study of accounting history . . . the least important topic in the
2000 survey and the next to last in 2005.’’
Thus, while the study of the history of the profession and of accounting thought has for decades
been seen as an important part of an accounting education, accounting professors seem not to have
accepted and implemented this pedagogy. Bisman (2009) suggests that part of the problem lies in
the lack of available guidance on how to include accounting history in the curriculum. She provides
several strategies for overcoming this void in the curriculum. One of her strategies is ‘‘using
particular . . . historical accounting artifacts . . . as teaching and learning resources’’ in established
courses (Bisman 2009, 140). She presents several extant historical case studies as examples of this
strategy’s implementation.
Therefore, the motivation for this historical case study is twofold. First and foremost, it is to
provide a rich contextual study of the development of governmental accounting and auditing
thought and standards, which are facilitated with the historical artifact of the 1928 audit of the City
of Avondale Estates (named on the National Registrar of Historic Places). Second is to augment the
paucity of case studies in governmental accounting with an example of a long-established and
vibrant municipality—a city that is a suburb of a major U.S. city—whose financial information,
including budgets and audits, is readily accessible over the Internet.
This case innovatively introduces a cross disciplinary approach to teaching governmental
accounting. The use of the historical financial statements and auditor’s report from 1928, in
conjunction with the contemporary GASB (1999) No. 34 prepared CAFR and auditor’s report of
the same municipality, exposes the student to a perspective on accounting standards, accounting
thought, and the practice of public accounting that is seldom effectively communicated in today’s
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college classroom. In addition, the presentation of this case study should stimulate professors to not
only consider the use of our materials in their governmental accounting classes, but also hopefully
to stimulate professors to consider the use of historical records to aid them in the instruction of other
accounting courses. For example, the lead author of this case study has effectively used practice sets
published circa 1800 in his teaching of a principles of accounting course.
The 2009 CAFR of Avondale Estates received a Certificate of Achievement for Excellence in
Financial Reporting from the Government Finance Officers Association. Thus, the use of the
contemporary CAFR of this municipality, along with references to the current GASB standards and
Government Auditing Standards as found in the Yellow Book and the reporting guidelines of the
State of Georgia, result in an exemplary presentation of governmental accounting standards of
reporting and auditing. (Note: Government Auditing Standards constitute what are known as
Generally Accepted Government Auditing Standards [GAGAS]).
The case with its various aspects can be used in group-based learning. An example of a groupbased learning project is to have a team of four students, each of whom will develop a unique aspect
of the case, put together an entire project that encompasses the changes, historical aspects, auditing
development, and so on. Alternately, each team could cover different aspects of the case so that the
result for the class as a whole is a comprehensive review of governmental accounting.
The historical background of the case is presented in various sections of both the case study
and the instructor’s manual as follows:
The history of the City of Avondale Estates—see the ‘‘Background’’ section of Case
Introduction.
Changes in accounting theory—see the ‘‘Potential Responses to Questions’’ (Question #2)
section of the Teaching Notes.
Changes in the reporting requirements of municipalities—see the ‘‘Potential Responses to
Questions’’ (Question #3) section of the Teaching Notes.
History of CPAs in Georgia—see the ‘‘Potential Responses to Questions’’ (Question #4)
section of the Teaching Notes.
Purpose
The 1928 City of Avondale Estates Auditor’s Report and Financial Statements can be used in
several ways to supplement the instruction of governmental accounting at both the undergraduate
and graduate levels. The value of this case study is enhanced by the Internet availability of both the
2009 CAFR and the most current CAFR of this municipality. Understanding the CAFR is an
essential part of learning governmental accounting in today’s age of sophisticated governmental and
not-for-profit accounting entities. The CAFR is similar to a public firm’s annual financial statements
and must also be audited by external Certified Public Accountants who render an opinion on the
fairness of their presentation in accordance with GAGAS.
This case can be the impetus for advanced research regarding the history of the accounting
profession, and specifically the development of governmental accounting and auditing standards.
The conversion of the 1928 financial statements into a 1928 CAFR, using current GASB (1999)
No. 34 standards, can be a challenging project and is probably most appropriately assigned to
graduate-level students. This project can be modified by supplying the student with fictitious
supplementary information for 1928. For example, information that might or might not be required
to be footnoted under current standards could be incorporated into the assignment.
In addition to aiding in the teaching of current governmental accounting standards, the case
also can be used to give the student a historical perspective on both governmental accounting and
the accounting profession. By comparing the accounting and reporting standards used in 1928 and
2009, the student will gain an understanding of the evolution of accounting thought. Moreover, the
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Volume 27, No. 2, 2012
Avondale Estates: A Case Study in Governmental Accounting and Auditing
425
auditors’ reports for the two periods illustrate the historical and continuing public service role of the
CPA profession as detailed in ET Section 53 of the AICPA (2010) Professional Standards. Thus,
this case gives the accounting instructor a useful vehicle for teaching accounting history and
thought. Of note, an understanding of the ‘‘history of the accounting profession and accounting
thought’’ was listed as an important capability of an accounting graduate by the Accounting
Education Change Commission (1990).
Teaching Accounting with Historical Documents
Accounting education has experienced an evolutionary existence due to changing needs of
employers and the accounting profession. According to Bailey (1994, 1), ‘‘accounting education is
undergoing a fundamental challenge to its traditional academic organizational culture, flowing from
significant changes in the environment in which higher education is now operating.’’ By the end of
the 1980s, the state of accounting education was in such a state of unrest that the American
Accounting Association created the Accounting Education Change Commission ‘‘to be a catalyst
for improving the academic preparation of accountants so that entrants to the accounting profession
possess the skills, knowledge, and attitudes required for success in accounting career paths’’ (AAA
2006). The creation of this commission is regarded by many to be a seminal event in accounting
education and the ensuing research, which attempts to remedy the fact that, according to Flegm
(1991, 355), ‘‘the accounting field [education] is in a state a great turmoil.’’
The quality of the overall education experience for today’s accounting major is in question
(Coffman et al. 1993). The specific accounting curriculum content is under fire due to its failure to
maintain an exchange of ideas with other academic disciplines unrelated to accounting and business
(Murphy 1992). The main value lost to the student and society when the curriculum does not
contain adequate coverage of general education courses provided by the humanities and the
sciences, is an absence of the ability of the accounting student to make significant classroom
discussions in other disciplines by using their prior accounting education and experience (Arya et
al. 2003). One way of addressing this issue is to use historical account books that are actual
representations of the transaction recording processes using single-entry accounting in the 1700s.
The presentation and the variety of transactions recorded in that time practically rely on an
understanding of science, economics, and history. According to Bloom and Solotko (2005, 239):
From our experience, these [account] books serve to motivate students to learn about basic
aspects of the accounting process. Students are curious about how a book of this nature
was prepared, what specific purposes it served, and how it is similar to and different from
modern account books. Using these books can also foster interdisciplinary instruction, i.e.,
accounting and history.
Also absent from current accounting instruction is an understanding of the influence of or the
impact of different environmental factors effecting (if causing the changes) or affecting (if modifying
the changes) accounting policy changes (Rebele et al. 1998). Exposure to (or knowledge of )
environmental factors enhances understanding of governmental influence on accounting processes
and principles, and to the beginnings of theoretical relationships between accounting and economics
(Rebele et al. 1998). An understanding of how and why change occurred from a historical perspective
allows the accounting student to become accustomed to a state of deep learning to understand and
seek meaning in accounting processes (Lucas 2002). This process is basically the responsibility of the
student to become an active participant, not a passive receiver of knowledge (Tucker 1993). In the
absence of such a historical perspective, the accounting student has insufficient skill with which to
analytically evaluate current accounting practices (Murphy 1992). According to Brief (1966, 2), ‘‘one
way to gain insight into accounting principles is to analyze the historical change in their structure and
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Ariail, Durden, Leathart, and Chapman-Vasill
426
the forces that influenced this change.’’ A knowledge of accounting history also allows the accounting
graduate to maintain the deep tradition and integrity of the accounting profession (Tucker 1993).
Current accounting students are the practitioners of tomorrow, and having knowledge of historical
accounting issues prepares the professional to evaluate contemporary and upcoming accounting
subjects (Bloom and Collins 1988).
Teaching Methods
After the students have completed the first several chapters of a standard governmental text, the
first exam is usually given. At this point, the students will have gained enough basic governmental
accounting knowledge to note some of the major similarities and differences between the 1928
financial statements and the 2009 CAFR. Our classroom testing has found that the historical content
of the case stimulates student interest while providing a useful vehicle for delivering current course
content. As most governmental accounting courses include either a computerized practice set or an
analysis of a current city’s CAFR, we suggest that this case study should be used to augment rather
than take the place of these major assignments.
The assignment for the case study can be approached in several ways:
Outside the classroom research assignment
Inside the classroom group assignment
A combination of the above
We recommend using it in the latter manner: as a team case study involving work and
discussion both inside and outside the classroom. The instructor can divide the class into groups of
two to three students (depending on the size of the class). The case study can then begin with an
analysis of the 1928 auditor’s report.
Lesson Plan for Using the Historical Auditor’s Report and Financial Statements
The following is a lesson plan for using the 1928 City of Avondale Estate’s Auditor’s Report to
enhance the understanding of governmental accounting, and in particular the differences that have
evolved from that time period to the present in reporting financial information in a city’s CAFR.
Each student should be provided with a copy of both the 1928 Auditor’s Report and Financial
Statements and the most current Comprehensive Annual Financial Report for the City of Avondale
Estates, Georgia. It will be helpful if the instructor also has both hard copies of the reports and
financial statements, and access to the information on disk or flash drive for presentation in the
classroom. The first class period of the case study should be an open class with all students.
1. Ask the class to look over the 1928 Auditor’s Report to get a general idea of what was
required to be reported during that time period, keeping in mind that this was, and still is, a
small city.
2. Have the students list the basic sections of the report, beginning with the letter from the
accountant.
3. Show the accountant’s letter on the overhead/computer screen and have the students write
down any differences they note between the 1928 Auditor’s Report and the current
Auditor’s Report such as language, etc.
4. Show Schedule I—Current Assets and Liabilities, December 31, 1928. Do the students see
any basic accounting differences in terminology, format?
5. Show Schedule II—Fixed Assets, December 31, 1928, and ask the same questions as in 4.
6. Show Schedule III—Actual Financial Results, December 31, 1928, including the Cash
Statement.
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7. Show Schedule IV—Detail of Receipts, For the Twelve Months Ended December 31,
1928.
8. Show Schedule V—-Detail of Expenditures, For the Twelve Months Ended December 31,
1928.
9. Show Schedule VI—Taxes Receivable, December 31, 1928.
10. Show Schedule VII—Unpaid Warrants, December 31, 1928.
After this class discussion, give the groups their out-of-class assignment. This will consist of
answering a set of questions and/or preparing a ‘‘revised CAFR’’ for the 1928 data, using the city’s
current CAFR as a guide. Remind the students of the resources available as listed in the ‘‘Student
Resources’’ section at the end of the Case Introduction section for additional guidance. The authors
believe that the preparation of a revised 1928 CAFR using the city’s current CAFR as a guide is an
ideal way for integrating accounting history and thought into a comprehensive overview of current
governmental accounting standards. Note: Please see the revised 1928 CAFR presented in
Appendix B.
Instructor Experiences
Teaching Aid
The case was used in two undergraduate governmental accounting courses. The students had
no previous experience with financial statements of state and local governments. Their
experience was limited to textbook material. The case supplemented the course with a realworld example of textbook descriptions.
In graduate-level governmental accounting courses, CAFRs of major cities have been used
for hands-on experience, with application of the material in the textbooks and in
governmental standards. For analysis of such CAFRs, the GFOA Certificate of Achievement
in Financial Reporting Checklist has been used as the guide for students to become familiar
with the contents and organization of CAFRs. Students, in groups or singly, apply the
checklist to the CAFR.
Undergraduate students experiencing their first exposure to governmental accounting can be
overwhelmed by the terminology and concepts that appear to be vastly different from
financial accounting for business enterprises. The Avondale Estates CAFR, again due to its
manageable size, allows students to grasp the articulation of financial statements and to
comprehend the nature of governmental activities. It thereby aids teaching in that the
students can grasp the conceptual similarities and differences in accounting for governments
and accounting for business enterprises.
The case efficiently and effectively enriches the teaching of governmental accounting with
the integration of history. The case provides the opportunity for students to take an active
role in identifying historical developments. The comparison of 1928 to 2009 is an experience
that heightens student interest and involvement in a way and to an extent that does not occur
with passive listening to lectures on historical developments, or reading historical snippets in
textbooks with no real context that actually demonstrates the changes. These results lead to a
reciprocal learning atmosphere in the classroom, wherein both students and instructor share
in the transfer of information and accept responsibility for learning.
Comparison with Other Pedagogies
In the past, the course was taught to graduate students. The GFOA checklist was applied to
CAFRs drawn from the largest 100 cities in the United States. This approach did not provide
a historical perspective. It did not engage the students in active classroom discussions or in
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any reciprocal learning experience. It did familiarize students with the content and
organization of CAFRs as a basis for financial analysis, though not to any degree greater than
does the Avondale Estates case. The case enriches the experience of analyzing a CAFR with
the historical perspective. The case improves the classroom experience with active
participation and heightened interest in the material on the part of students, and the case
brings the subject matter to life.
Student Feedback
The task of comparing the 1928 audit report and the 2005 CAFR was well received (the
2005 CAFR was used at the time of the course). The students were delighted to be away
from the textbook assignments and dry reading, and into a hands-on task with material they
could comprehend. The instructions were simply to identify the differences. Questions,
observations, and historical changes were natural consequences of the task.
The students reported that they learned more in the hands-on situation where they could
actually see the real financials than they could by reading about such financials. Their
suggestion was much less reliance on the text and more use of CAFRs.
The students reported that they enjoyed the project. The instruction was open ended, simply to
identify as many differences as they could. They were given a reference to access the GFOA
Certificate for Achievement in Financial Reporting Checklist if they wished to use it as a guide.
The students found especially interesting the old terminology, the bank (cash) basis of
reporting, and the differences in presentation of the two reports.
Since the two sets of financials were from an evolving municipality, the students could see
the impact on the financial reports of the growth of the city and the changes over its 81-year
history.
TEACHING NOTES
Teaching Notes are available only to full-member subscribers to Issues in Accounting
Education through the American Accounting Association’s electronic publications system at http://
aaapubs.org/. Full-member subscribers should use their usernames and passwords for entry into the
system where the Teaching Notes can be reviewed and printed. Please do not make the Teaching
Notes available to students or post them on websites.
If you are a full member of AAA with a subscription to Issues in Accounting Education and
have any trouble accessing this material, then please contact the AAA headquarters office at info@
aaahq.org or (941) 921–7747.
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APPENDIX A
Historical Audit Report and Financial Statements, December 31, 1928
This appendix contains a typed version (a PDF of a scanned copy of the original documents is
available from the authors) of the historical documents from the 1928 audit of the City of Avondale
Estates, Georgia. The following 1928 documents are included:
1.
2.
3.
4.
5.
6.
7.
8.
Auditor’s report, January 2, 1928
Current Assets and Liabilities, December 31, 1928, Schedule 1
Fixed Assets, December 31, 1928, Schedule 2
Actual Financial Results, December 31, 1928, Schedule 3
Detail of Receipts for the Twelve Months Ended December 31, 1928, Schedule 4
Detail of Expenditures for the Twelve Months Ended December 31, 1928, Schedule 5
Taxes Receivable—1928, December 31, 1928, Schedule 6
Unpaid Warrants, December 31, 1928, Schedule 7
Note: The following are facsimiles of the original document.
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APPENDIX B
Supplemental Materials
City of Avondale Estates, Audit Reports, 1928: http://dx.doi.org/10.2308/iace-50128.s1.
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