PACE Academic IG

Introduction

During my employment in private industry, I became interested in FP&A.  My interest, however, weakened because to obtain an interview, an MBA degree was needed, which I did not have.  I eventually obtained an MBA degree, obtained a position in FP&A, but I realized that the education behind the degree was more important.  The importance of the education became stronger as I began teaching accounting courses in MBA programs and assisted clients in private practice.  I would like to share my experience, as a student and a professor, to help accounting majors give, at minimum, serious thought toward the benefits of an MBA education.

Student

Two accounting courses provided the education that has helped me with my private practice and my work as an accounting professor.

The professor I had in financial accounting assigned group projects that focused on the analysis of financial statements in a company’s 10-K.  The professor emphasized the use of the DuPont System for the analysis of return on equity (ROE), and the project helped me in three ways.  First, it helped me acquire a greater appreciation of group effort, especially when people bring different perspectives together to improve the well-being of others.  Second, it helped me emphasize the importance of completeness in studying a situation using the DuPont System for ROE analysis requires the study of all elements on an income statement and a balance sheet.  Third, it helped me improve my analytical skills to break down wholes into parts that led to identifying the cause of situations, i.e., root cause analysis.

The professor I had in managerial accounting hated the use of the word “allocation” when it came to costs.  To my professor, one cannot obtain clarity in a financial situation, for example the profitability of a product, when costs are arbitrarily allocated or when the allocation method is flawed.  The lack of clarity educated me in more than just determining the profitability of a segment.  Improper allocation methods can make a good situation look bad, which can result in a person being unjustly criticized or worse.  People come first, and as AI assumes a greater role in companies, accounting majors must adapt to an environment where their interpersonal skills may be valued more than their technical skills.

Perhaps the greatest impact my managerial accounting professor had on me was the use of the book The Goal, written by Eliyahu Goldratt, for a group project.  The book described a production philosophy called The Theory of Constraints, which emphasizes the management of bottlenecks, i.e., a step in a process that moves slower than the other steps.  The book helped me and continues to help me the appreciation the importance of systemic thinking.  Improving the well-being of others cannot be made in isolation, improvements must be made in ways that improve the entire system.  I have taken this with me in private practice as well as my latest venture, which emphasizes the development of accounting systems, and systemic thinking will help accounting majors improve their opportunities for rewarding careers in private industry through management accounting.

Professor

What I learned from my accounting professors, as well as other professors, in graduate school is used in my work as an accounting professor.

I assign group projects to my rosters, which have been rewarding for me and my students.  The quality of the projects is the result of people not only working with each other but also respecting each other.  For the accounting major, interpersonal skills will be more important because of, as I mentioned earlier, the increased role of AI.  One of the great benefits of an MBA education for an accounting major is the opportunity to participate in group projects where you will be working with people having many different backgrounds and interests than you.  For an accounting major, embracing the education from group projects in an MBA program will lead to rewarding careers in private industry through management accounting.

When teaching process costing, I remind students that the use of this system is most appropriate when companies manufacture products that require little to no degree of customization.  As a result, I frame process costing as a system that describes how companies create what they sell.  This allows me to help accounting majors prepare for management careers by focusing on how things are done.  By knowing how things are done, accounting majors are ready to offer suggestions for improvements that lead to wins for the student, the company, and the company’s stakeholders.  The wins that are created can only happen when accounting majors successfully apply what they learned from the classroom, which is very important for me as an accounting professor.

I teach financial accounting and managerial accounting, and like my work in undergraduate majors, the overwhelming majority of students are not accountants nor are they interested in becoming accountants.  It may look like a challenge for me, but it is not because it becomes a win for the non-accountants and accountants.  The non-accountants are recognizing how accounting can help them become better professionals, whether they are pursuing careers in finance, marketing, or sports management.  The accountants are learning more than what they were taught as undergraduates.  The accountants are learning how to communicate accounting with non-accountants.

I would like to share comments from one of my students who came to me with a very strong background in accounting:

“In addition to working in teams, class discussions offered a judgement free space to work on speaking intelligently. I usually try to avoid speaking when I can and I feel that is one subject I could continue to work on and improve. I was able to practice speaking, something I would not say I am well versed in. Combining public speaking and a business evaluation was the one-two punch I was looking forward to within my MBA classes.”

This student achieved an education from MBA classes that will lead to a rewarding career.

Conclusion

Wherever we are in life, learning opportunities exist; they do for me, and I take advantage of them.  For accounting majors, what they learn from undergraduate accounting courses is a beginning for building a rewarding career in management accounting.  The rewards will be received when the accounting major can work with non-accountants inside the company in ways that improve stakeholder well-being.  Learning the ways to improve stakeholder well-being exists when the accounting major acquires greater insights into the ability to use accounting in an environment that stresses an education from the classroom to the job and vice versa.  This type of education is a reason why an MBA education is important for an accounting major.