Defining critical thinking in financial accounting: Perceptions of students and lecturers

• Critical thinking in financial accounting involves evaluating large amounts of information. • Judgment in applying accounting standards is central to critical thinking. • Critical thinking required in questions on accounting treatment and error correction. • Integrated and discussion questions with multiple answers test critical thinking. Globally, professional accounting bodies emphasise higher-order skills, like critical thinking, as essential outcomes of higher education. To contribute towards teaching excellence in accounting education, lecturers must effectively integrate critical thinking development and assessment into their modules. This study aimed to explore how critical thinking skills, including their assessment, are perceived by students and lecturers within the sub-discipline of financial accounting. A mixed methods design using questionnaires and follow-up focus group interviews gathered perceptions from accounting students and lecturers, with data analysed through descriptive statistics and thematic analysis. Participants viewed critical thinking in financial accounting as evaluating large amounts of information to decide what is relevant, using judgement to apply accounting standards and then reaching conclusions. To further define critical thinking, the study explored how critical thinking could be operationalised in assessments. The following types of assessment questions were identified as requiring critical thinking: questions that involve evaluating accounting treatments, identifying and correcting errors, responding to open-ended discussion questions with multiple plausible answers, and solving problems that integrate concepts from various financial accounting topics. Financial accounting lecturers could employ the findings to ensure the appropriate development and assessment of critical thinking skills, enhancing teaching excellence in financial accounting and benefiting accounting graduates and their future employers.