ARTHUR ANDERSEN LLC REPORT

Belverd E. Needles, Jr., Ph.D., CPA, CMA
Arthur Andersen LLC Alumni Distinguished Professor of Accounting
"A Commitment to Service: 1988-2002"

At the beginning of my fifteenth year as the Arthur Andersen Alumni Distinguished Professor of Accounting, it is appropriate to give a status report and to state my plans for the future.

If I had to summarize my record during these years in one phrase, it would be "A commitment to service." This reflects my belief that all my work should be assessed in light of its benefits to the various stakeholders of my position. My commitment is to serve DePaul and its students through teaching, to serve the academic discipline of accounting through research and writing, and to serve the profession through leadership in professional organizations. It would not have been possible to achieve the results described below without the support I have received from DePaul alumni at Arthur Andersen, the College of Commerce, and School of Accountancy and MIS of DePaul University.

I believe I have had a positive influence on my students, as reflected by my teaching awards, innovations, and evaluations. My research and writing have made significant contributions to the discipline of accounting, especially in the areas of international accounting and accounting education. The commitment to service is also strongly reflected in my having been a positive participant in the policy-making process as it relates to accounting education at the broadest possible levels. My activities in this area have widespread applicability across the accounting curriculum for the benefit of many students, with the notable aspect that these efforts have influenced policy related to accounting education at the school, state, national, and international levels. These contributions to the profession have been recognized by my inclusion in the list of "100 Most Influential Accountants" by Accounting Today in 2001. The following paragraphs provide an overview of activities.

DePaul University

I was instrumental in founding the Advisory Board of the DePaul Art Gallery and currently serve as co-chair of the Board. Over the past fifteen years I have helped to organize four exhibitions of fine prints in the DePaul Art Gallery.

School of Accountancy

I served as Chair of the Undergraduate Curriculum Revision Task Force, a year-long effort that resulted in the most extensive revision of the undergraduate curriculum in the history of the School. In the implementation of the new curriculum I have been the principal faculty member in teaching the new capstone course in Internal and External Consulting. Previously, I served on the Director Search Committee to bring new leadership to the School of Accountancy, and helped to frame the structure that change may take by chairing the 150-Hour Implementation Committee and the Undergraduate Curriculum Revision Committee.

Illinois CPA Society (ICPAS)

At a critical time in its history, I have accepted a major leadership challenge to the accounting profession beginning in 2002 as Senior-Vice Chair (Chair-Elect) of the Board of Directors of the Illinois CPA Society. Previously I served a two-year term on the ICPAS Board of Directors, which followed two years as Chair of the 150-Hour Requirement Task Force. I have also served in a number of other leadership capacities for the ICPAS over the years.

CPA Endowment Fund of Illinois

I was a founding member of the CPA Endowment Fund of Illinois and currently serve on its Board of Directors. In this capacity I chaired the task force that developed the one of the most ambitious scholarship programs in the history of accounting education in Illinois. In its second year, the scholarship program has awarded twelve scholarships to students in their fifth year studying for the CPA examination. Further, I was instrumental in founding the Needles/Snow/Wish Endowment Fund for DePaul University. Through various matches this fund now commits up to $1.2 million in resources to DePaul students.

American Institute of CPAs (AICPA)

In 1996 I completed three years as Chair of the AICPA Academic and Career Development Executive Committee, the educational policy committee for the AICPA. In my six years on this committee, many major policy issues were addressed. Two of the major accomplishments during my term as chair were the national student recruiting program, including the interactive CD ROM entitled "Zoom Room," and the monograph "Information Technology Competencies in the Accounting Profession: AICPA Implementation Strategies for IFAC International Education Guideline No. 11."

American Accounting Association (AAA)

During 1996 and 1997, I served as chair of the Continuing Education Committee and Director of Continuing Education for the AAA. The responsibilities of my committee were to implement the number one strategic priority of the American Accounting Association, which is to improve the competence of faculty in American universities. A major accomplishment has been the development of a continuing education program consisting of more than forty courses offered in conjunction with the annual meeting in Dallas in August 1997. The courses are structured by a conceptual framework of knowledge, skills, abilities, and attributes (KSAA's) that have been identified as necessary for a professor to possess. I also served on the Accounting Education Advisory Committee.

International Federation of Accountants (IFAC)

In October 1997, I completed five years on the Education Committee of the IFAC. This committee establishes educational policy recommendations for about 130 professional organizations in eighty countries. Two significant outcomes of my service on the committee are International Education Guideline (IEG) No. 11, "Information Technology in Accounting Education," and International Education Guideline No. 9, "Prequalification Education, Assessment, and Experience Requirements of Professional Accountants." IEG No. 11 presents the first comprehensive guidance in the form of a framework for both prequalification and post-qualification education competencies in information technology for professional accountants. I was instrumental in obtaining recognition for this guideline by the AICPA, as noted above. I was the author of IEG No. 9, which represents a major (and revolutionary) upgrading of the requirements to become professional accountants around the world. This document is very important in establishing mutual recognition of accounting credentials among nations.

International Association for Accounting Education and Research (IAAER)

In 2002, I will complete two terms and five years as President of IAAER, an organization which has become known as the "Global Voice of Accounting Educators." The World Congress of Accounting Educators in Hong Kong in November 2002 will cap fifteen years of service in IAAER-including also five years as Vice-President and five-years as Secretary/Treasurer. During this time IAAER has grown more than ten times in size and has members from more than fifty countries. In addition, the leading academic and professional accounting organizations of the world are among its thirty-seven organizational members, including, for example, the American Accounting Association, the AICPA, the European Accounting Association, and the Japanese Accounting Association. The IAAER is the only academic organization officially recognized by the International Accounting Standards Committee (IASC) and IFAC.

International Accounting Standards Committee (IASC)

I served three years on the Consultative Group of the IASC. During this time the IASC was developing a core set of standards and reorganizing into the International Accounting Standards Board (IASB).

Ten-Year Teaching Summary

Teaching Objectives

• To develop and maintain state-of-the-art courses in auditing and financial accounting with an emphasis on new professional services and on international accounting
• To achieve consistently above-average student evaluations.
• To serve students by being available to provide advice and counsel.

Teaching Accomplishments

• Excellence in Teaching Award, DePaul University, 1998
• Outstanding International Accounting Educator, International Accounting Section, American Accounting Association, 1996
• Ethics Integration Competitive Grant, DePaul University, 1996
• Textbook Excellence Award, Text and Academic Authors Association, 1995
• Outstanding Accounting Educator, American Institute of CPAs, 1992
• Accountant of the Year-Education, Beta Alpha Psi, 1992
• Ledger & Quill Teaching Excellence Award, Ledger & Quill Accounting Alumni Organization, DePaul University, 1991, 1999
• Excellence in Audit Education Program, Coopers & Lybrand Foundation, 1988-89 and 1990-91
• Joseph A. Silvoso Faculty Award of Merit, Federation Schools of Accountancy, 1990
• Outstanding Accounting Educator, Illinois CPA Society, 1990
• Quality of Instruction Council Grants, DePaul University, 1986-87 and 1989-90
• Eminent Scholar, Jacksonville State University, February 6-9, 1989

• Change from a procedural approach to a risk-based, judgment approach
• Emphasis on the personal attributes of professionalism
• Extensive writing assignments on cases, papers, and examinations
• Extensive in-class group work
• Development and use of a major honors team case that requires the development of a plan for the audit of an actual bio-tech company. The case use goal-based learning techniques.
• Use of video cases:

     - Dermaceutics (Assessing inherent risk and planning the audit)
     - CableCo Chronicles (Conducting an entire audit)
     - Equity Funding (Legal Liability)
     - ZZZZZBest (Fraud Detection)

• Required ethics essay on the young accountant's responsibility for whistle blowing. Students from my classes have won all of the nineteen awards over a six-year period in the Melvoin Ethics Manuscript Competition.
• Equity Funding Debate--Student teams debate liability of the auditor based on actual court records.
• Extensive use of visual representations to summarize the audit process.

• Strong user orientation with an emphasis on the interpretation of financial statements in light of domestic and international accounting practices
• Integration of international accounting topics throughout the course.
• Extensive writing assignments on cases, papers, and examinations
• Extensive use of groups including team, peer-evaluated examinations
• Large integrated term project in which each student does a financial analysis of two companies (one non U.S.) in the context of the foreign country's economy, accounting practices, and the industry.
• Team presentations of term projects

• Focuses on the management consulting process, as a creative problem-solving process, where the objective is to provide services that add measurable value to internal and external clients.
• Uses a strategic business perspective and integrates and synthesizes all functional business areas.
• Uses "real-world" case studies to demonstrate the consulting process.
• Enables students to serve as effective consultants to internal and external clients.
• Engages "Practitioner Associates" in the evaluation of student presentations

• Integrate and synthesize accounting and other functional business knowledge and skills in problem-solving:
• Identify, analyze and solve problems
• Work effectively in teams
• Use effective written and oral communication skills in a consulting environment
• Use of business and accounting research tools and methods
• Use diagnostic tools and diagnostic interviewing skills
• Diagnose business problems and develop suggested solutions.
• Recognize the use of technology as an enabler in business processes
• Introduce and implement change within organizations
• Recognize the human and interpersonal dimensions of the consulting process

• Achieved student evaluations for the above courses that consistently exceeded the School of Accountancy averages.
• Beginning in June, 1995, and continuing to the present, I have conducted focus groups involving 12 to 15 students from selected sections of my courses during which all aspects of the courses were critically examined from the standpoint of the students and with a view to improving the courses. Suggested changes have been implemented.
• Served students by devoting full attention to them and their classes during my teaching quarters including specific goals of advising, counseling, and assistance with school, college, and university relations. This offer is included on my course syllabi. The same services are provided to former students.

Ten-Year Research Summary

Research Objectives

• To promote accounting research internationally through the International Association of Accounting Education and Research
• To write innovative textbooks and other materials for the first-year accounting course.
• To develop interactive educational and professional software.

Research Accomplishments (Since 1988)

• Twenty-nine articles and chapters in leading journals, monographs, scholarly books published representing research in the areas of accounting education, international auditing, international accounting, and international accounting education.
• Thirty-eight papers presented at academic meetings across five continents.
• Twelve cases and electronic media published.
• Editorial board service on four international journals
• Author and co-author of the leading series of textbooks (six books in series) for the first year of accounting, many features of which are now standard in beginning accounting textbooks.
• Twice received the Textbook Excellence Award for books published in accounting, business, economics and management from the Text and Academic Authors Association for the Financial Accounting (fifth edition and seventh edition) The selection panels, which consisted of textbook authors in these disciplines, choose the book as the most outstanding book published in these disciplines.
• Book review editor of the International Journal of Accounting from 1989 to 1997.
• Author and guest editor of a Special Issue of The International Journal of Accounting devoted entirely to "International Accounting Research 1965-1996: Indexes And Annotated Bibliography Of The International Journal Of Accounting," (Vol. 33 No. 1 1998), pp. 1-181.
• Co-editor of monographs in international accounting education, the most comprehensive on this subject, including Accounting Education for the 21st Century: The Global Challenges (American Accounting Association and Pergamon Press, Oxford, England, 1994), and Comparative International Accounting Education Standards (Center For International Education and Research in Accounting, Urbana, IL, 1990). The former, with 2,500 copies in print, has completely sold out and is now in leading libraries throughout the world.
• Editor of the only research monograph devoted entirely to international auditing, Comparative International Auditing Standards (American Accounting Association, 1985) and authored "Taxonomy of Auditing Standards" (Chapter 6 in Handbook for International Financial Management.
• Chosen under the auspices of the United Nations, B. Needles' Principles of Accounting became in 1993 the first basic accounting book translated into Russian and published by a Russian publishing company. Now in third printing after selling out quickly in the first two printing, it is the standard Western accounting textbook in Russia. An adaptation of the same text was published as Accounting in Australia in 1990 (Second Edition in 1998).

Ten-Year Service Summary

• To serve the school, college, and university in areas where my skills and experience can fulfill a critical need.
• To play a leadership role in accounting education policy formation at the school, state, national and international levels.
• To promote improvement in the classroom teaching of accounting.

Service Accomplishments

• Long Range and Strategic Planning Committees, College of Commerce, DePaul University, 1993-
• Chair, International Committee, College of Commerce, DePaul University, 1989-91
• Council on Instructional Quality, DePaul University, 1987-89
• Concentrated external service to the following organizations as reflected by the elected and appointed offices and memberships listed below:
• American Accounting Association
• American Institute of Certified Public Accountants
• European Accounting Association
• Illinois Certified Public Accountants Society
• International Association for Accounting Education and Research Elected Offices
• Senior Vice-Chair (Chair-Elect), Board of Directors, Illinois CPA Society, 2002-
• Board of Directors, CPA Endowment Fund of Illinois, 2000-
• Vice-Chair, Board of Directors, Illinois CPA Society, 2000-2002
• President, International Association for Accounting Education and Research, 1997-
• Secretary/Treasurer, International Association for Accounting Education and Research, 1992-97
• Board of Directors, Illinois CPA Society, 1993-95
• Vice President--North and South America, International Association for Accounting Education and Research, 1989-92
• United States Representative--Executive Committee, European Accounting Association, 1986-89
• At-Large Member, Nominating Committee, American Accounting Association, 1987-88
• Council member, American Accounting Association, 1987-88
• Chairman, International Accounting Section, American Accounting Association, 1987-88

• IAAER Representative, Consultative Group, International Accounting Standards Committee, 1997-1999
• U.S. Representative, Education Committee, International Federation of Accountants, 1993-97
• Chair, Education and Careers Executive Committee, American Institute of CPAs, 1993-96
• Chair, International Faculty Exchange Committee, American Accounting Association, 1993-94
• Chair, 150 Hour Implementation Task Force, Illinois CPA Society, 1992-94
• Chair, Joint Task Force on The Notable Contributions to Accounting Literature Award, American Institute of CPAs and American Accounting Association, 1993
• Chair, Careers/Recruitment Executive Committee, Illinois CPA Society, 1989-92
• Chair, Planning Committee for 1992 International Conference on Accounting, American Accounting Association, 1988-92
• Vice-Chair, Program Committee for 1990 Annual Meeting, American Accounting Association, 1988-89
• Chairman, Research Grant Selection Committee, Illinois CPA Society, 1987-89
• Chairman, Subcommittee on Common Body of Knowledge, American Accounting Association, 1987-88

• Women's Executive Commttee, Illinois CPA Society, 2001-
• Audit Committee, Illinois CPA Society, 2001-
• International Forum on Accountancy (IFAD), 2001-
• Information Technology Executive Committee, AICPA, 1996-99
• Strategic Planning Committee, Illinois CPA Society, 1989-98
• Workforce Issues Executive Committee, Illinois CPA Society, 1993-94
• Careers Subcommittee, Illinois CPA Society, 1989-90
• Membership Committee, Federation of Schools of Accountancy, 1982-87, 1989-90
• 150 Hour Requirement Committee, American Institute of Certified Public Accountants, 1988-89
• Post-Baccalaureate Accounting Education Committee, American Institute of Certified Public Accountants, 1986-88

Promoted innovation in accounting education through editing Accounting Instructors' Report, a journal with more than 6,000 circulation, directing the "Conference on Accounting Education," an annual symposium for the improvement of instruction in accounting education sponsored by Accounting Instructors' Report, and making more than thirty- five presentations at academic accounting meetings on the topics of skills development, managing change in accounting education, and application of total quality management techniques to the accounting classroom. The Nineteenth Annual Conference on Accounting Education will be held in February 2003 in St. Louis. More than 1,700 faculty members have participated in these conferences.

The past fourteen years have been characterized by strong accomplishments in all three areas of endeavor. I intend to continue my commitment to all the stakeholders of my position, but I envision the mix of activity changing in the next five years. I expect my teaching to move in the direction of courses related to the new services provided by professional accountants and to continue the development of the area of international financial reporting and analysis. I expect my research and writing to emphasize international accounting and accounting education and continued development of innovative accounting textbooks. My service to my students and the university will remain a major component of my activities. Although I will continue to be involved in the development of the academic accounting profession globally through my position as Past-President of the International Association of Accounting Education and Research, I expect a shift in my time to serving the accounting profession through the role of chairman of the ICPAS and membership on Council of the AICPA. My specific objectives are summarized in the accompanying table.

Objectives: 2003-2008

• To develop and maintain state-of-the-art courses in auditing, consulting, and financial accounting with an emphasis on new professional services and on international accounting
• To achieve consistently above-average student evaluations.
• To serve students by being available to provide advice and counsel.

• To promote and conduct international accounting research.
• To write innovative textbooks and other materials for the first-year accounting course.

• To serve the school, college, and university in areas where my skills and experience can fulfill a critical need.
• To play a leadership role in the accounting profession at the state level.
• To continue to influence accounting education policy formation at the school, state, national and international levels.