There is a persistent theme in the Finance literature (i.e. studies from 1994, 1997, and 2002), the concepts taught in the introductory finance course are not those used by the practitioner in the office. As such, I am extremely interested in this community's take on which finance topics should we be teaching today's student in an introductory finance course. Thank you. A university professor in the introductory finance classroom.
Which finance topics should we be teaching today's student in an introductory finance course?
Answers
Dear Anon;
The things I usually end up teaching my freshly minted hires are:
-Analytical tools, primarily in
-The two core concepts of
-The concept of "closing" and developing / implementing a process to "close".
-Cash flow forecasting. I've known many seasoned people who still can't do this...and it is the most critical output from any forecast (imho). Largely it is getting people comfortable with uncertainty, being able to find the important factors, quantify and communicate them.
KP
1
Keith,
After teaching college level accounting for 10 years, I am still shocked that in Accounting 101 no one is taught how to create a COA, what systems are common, what aren't, etc.
It's amazing that as you go through the Accounting
Exception was a consulting job for Mutual of New York (dates me) where I was part of team that created a COA numbering system of 24 to the 36th power.
Keith makes some great points. I won't repeat but echo them. As strange as it seems, I also teach basic communication skills--email etiquette, PPT approaches and quick memo skills. I recall one vice chairman for whom I worked who would not listen to or read anything sloppy.
The role of
I totally agree with Keith, especially in the areas of analytical tools and cash flow forecasting. There is nothing more important in this world of uncertainty than projecting cash and analyzing different scenarios to be better prepared... for the worst or the best!
The best exercise I can think of for any classroom or individual is to ask them to prepare their own personal budget in Excel. Because it's something very close to their daily life, it will make much sense to them than any theoretical corporate example.
Through that exercise, they will apply the analytical tools, identify all possible sources of income/expenses, learn about forecasting methods (starting with simple averages, including moving averages, linear increases, etc.), think about those external variables the main expenses depend on, use multi-variable indicators, etc.
Keith lists what I think are great examples. Looking back, my accounting degree reads "Accounting and Information Systems" but there was very little process and systems in the curriculum, while this is a critical area in developing a
The curriculum at the undergrad level involved little "real-world" problem solving or creativity. It would be more relevant to give students a problem and to grade them for achieving an effective result. The problems can (and should) incorporate accounting principles, so I suppose this would be be junior/senior level course material.
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