The research reported in this paper is part of an ongoing investigation into the design of a technology-enhanced learning environment that draws from approaches embodied in the situated learning theory. In this learning context, Second Life machinima (animated artefact filmed in a 3D virtual environment) is used as an anchor to mediate authentic learning experiences and facilitate apprenticeship-style learning in the classroom. The ultimate aim of the research is to address a long-standing educational problem in accounting education that of failing to help students to achieve higher order outcomes. Research in accounting education has shown that this problem is deeply rooted in the limitations of traditional delivery modes prevailing higher education practices. Among other important findings in the current study, the paper reports that students appreciated the technology-enhanced learning environment, which resulted in significantly increased level of engagement and active learning. Findings revealed that the development of higher order thinking skills is best facilitated in authentic contexts that represent the values and practices of the discipline. (Contains 5 tables, 1 figure and 1 note.)