In September 2009, the Lean Enterprise Institute (LEI) recognized two accounting professors with 2009 Excellence in Lean Accounting Awards. LEI is a nonprofit education, publishing, conference and management research company that works to advance lean thinking around the world. Gerald DeBusk, Ph.D., assistant professor of accounting, University of Tennessee at Chattanooga, and Andrew Bargerstock, Ph.D., associate professor of management, Maharishi University of Management, Fairfield, IA, received awards at the fifth annual Lean Accounting Summit conference in Orlando, Fla.

LEI issues this annual award to recognize teachers or students who attended the previous year’s conference then applied what they learned in the classroom. For example, after attending last year’s conference in Las Vegas, DeBusk introduced lean concepts and examples into his managerial accounting course for MBA students. LEI explains his students not only learn traditional accounting concepts about such issues as inventory valuation and absorption, but also the lean management approach, which many students need back at work because their companies are undergoing a lean transformation.

“I get a lot of positive comments on bringing the real world into the classroom,” said DeBusk, who worked as a controller at a company implementing lean methods.

Bargerstock is a certified public accountant (CPA) and founder of Vanguard Resource Group Inc., which provides human resource management consulting. He also founded the Accounting Professionals MBA program at Maharishi University of Management. He described this program as “a cooperative MBA program where students study full-time on campus for several months and then fulfill two years of curricular practical training while completing academic requirements through distance education.”

In addition to administering the program, Dr. Bargerstock teaches a variety of accounting and management courses. The university says that a result of Bargerstock’s and his staff’s efforts, new student enrollment has grown from 39 students in the first year to 93 students in 2008. The majority of students come from countries such as Nepal and Ethiopia, and many have training positions with Washington, D.C., area CPA firms, manufacturing companies, as well as healthcare and service organizations.

Shifting Away from Traditions
LEI said the lean accounting movement seeks a shift from traditional cost accounting practices to practices that accurately measure and motivate companies implementing lean management principles.

“The shift is needed because traditional cost accounting does not accurately reflect the performance gains made when companies launch a lean transformation,” the institute says. “For example, traditional financial statements do not accurately reflect reductions in inventory or cycle times, or new found capacity in operations caused by a lean transformation. Traditional accounting practices also motivate the wrong behaviors in companies implementing lean principals. For instance, conventional efficiency metrics can motivate management to create excess inventory.”