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When I was in Scotland,
I’ve actually been to Scotland twice.
I went in 1997 and I was there for 12 weeks,
and then I had a very short, very short,
opportunity to go in May two years ago
and I was really just there for two weeks.
But what I really, I went to do my research,
but really what I ended up doing is
talking to them about education and
environmental accounting education.
And we talked about a variety of ideas
for my course because I’m never satisfied
with this course and it’s a ton of work
and I always am looking for news ideas,
and one of the things I talked about
with my colleagues is bringing up an
environmental disaster into the classroom
and then having students take stakeholder roles.
Now a stakeholder is someone who has a
stake in what that organization does.
I think it’s easier for students to get something
when they can relate to it, ok?
And I had done some research on the
Olympic Pipeline explosion.
My research question was:
‘There’s four corporate owners,
how are they going to report this,
at the end of 1999, in their annual reports?”
And what I saw was fascinating from my
perspective, and from the perspective as an
educator of accounting, is that we have,
kind of, standards on how things are suppose
to happen in the reporting world,
we have a conceptual framework of
accounting that guides us, and yet,
each of those four organizations reported
the disaster in very different ways.
And so, one way that I’ve dealt with that
is I’ve just brought the example to class
and I’ve, you know, put it up on the overhead;
and so they get to see without really
thinking about it ahead of time.
But I think it’s better if you have them
grapple with the issue and think about
‘well, how should this be reported?’
and then you show them what happened.
To me that’s a better way of learning and
stimulating life long learning skills and
stimulating their interest.
But the other thing that I realized
is that when I looked at, for example,
Texaco’s annual report for 1999
they didn’t disclose very much, mind you,
but they talked about two things.
They talked about the explosion that killed
somebody in Anacortes in their footnotes
and they talked about the Olympic Pipeline
explosion in their footnotes, very briefly,
and when I read the thing in Anacortes
it was far enough removed that I didn’t
have an emotional response, but when I read
about the pipeline explosion I got chills
and I thought, ok, if I can give the students
something that gives them chills because
it happened so close to home
then that’s important.
Now, this particular assignment, I think, is
I’m really excited about because we can
pick apart the conceptual framework of
accounting and the first way we can
think about it is the concept of materiality.
Now, typically what materiality means
is relative size.
And so, if an organization, you know,
in the books, if there’s been a mistake in the
calculation of purchases, if its relatively
small compared to the whole organization,
we don’t worry about that, ok?
So that’s what I mean by relative size.
And what’s important to me about this
particular assignment is that the Olympic
Pipeline explosion was pretty immaterial to
at least 3 of the 4 corporate owners
and I think that guided how they reported.
In terms of size, I think it’s really hard to
grasp how huge Texaco is
and when I looked at the 10k,
which is the report they file with the SEC,
it’s that thick, I mean it’s absolutely huge.
What happened in Bellingham is a blip,
it’s like a fly on the wall
for a corporation that size,
and what I think is really interesting
about the Olympic Pipeline explosion,
and why I use it in my class,
is because it’s clearly material
to everyone in this community at some level,
especially if we were here,
and when I pass out the assignment
even 8 years later, there’s chatter about
where people were when it happened.
Even though a lot of the students were
in Seattle or across the mountains
or wherever they were, there’s still chatter,
this many years later, about where they were
and what they remember.
And so, I think it helps them to understand
materiality a little bit better, that it’s not just
size and that, as professional accountants,
we want to think about not just size, but
we want to think about the quality of the event
in the decision to report to the public.