How Accounting Will Save Us From The Next Financial Crisis

by Jarie Bolander on December 21, 2012

Deciding whether or not to get a masters degree is a tough choice for students in most fields. The Daily MBA has written about some of the general considerations in this debate, but has not honed in on particular specializations the way the next article does. Today’s post, written by Valerie Harris, takes an in-depth look at the growing value of masters degrees in finance and accounting. Valerie is the author of a web resource for students interested in professional networking, and has a great deal of experience navigating the often choppy waters of higher education.

How a Masters Education in Accounting Might Help Thwart the Next Financial Crisis

As the events of the last four years have shown, the financial world is anything but predictable. International markets shift constantly, and regulators are responding with more adaptable standards and regulations. Those already established in the financial world often have no trouble keeping up with the changes, though there remains a strong argument for continued education—particularly for the newer, rising class of accountants and financial planners who may not have had the unique “benefit” of working through the 2008 collapse and its aftermath. Going back to graduate school for a masters in accounting may be one of the smartest things today’s professionals can do. Employers are increasingly shouldering the costs and absorbing the lost time, too, which can make the situation a win for everyone involved.

In most cases, earning a bachelor’s degree in finance or accounting is all that is needed to get started in the working world. As in many jobs, a lot can be learned simply through doing. Putting together financial reports, preparing filings, and tracking investments requires a keen eye and a quick mind, but is not usually so advanced as to require certification or other professional training.

In order to move past the entry level, however, more exacting knowledge and training is often indispensable. This is increasingly true in many of the top U.S. financial firms, most of whom are looking for expertise and new direction in order to ward off another major meltdown. “The ramifications of the Banking Collapse of 2008 will be felt for years if not decades to come,” Britain’s The Guardian has said. “Western leaders, who for years boasted about the self-evident benefits of light-touch regulation, had to sink trillions of dollars to prevent the world bank system collapsing.” Few are keen to do so again.

The rise of new regulatory tools and accounting practices—instituted in many markets for precisely the purpose of preventing the unchecked spending and poorly managed loans that marked the beginning of the end in 2008—also in many ways demands a more educated workforce. “The complexity of today’s business environment requires public accountants to have expertise in accounting principles and procedures, and to understand the financial, managerial, legal, and tax ramifications of business transactions,” Boise State University says. Boise State is one of many schools around the country promoting one-year masters in accounting programs designed to equip already-trained professionals to hone their knowledge even further in order to serve the modern financial marketplace more effectively.

In most schools, the masters in accounting, or MAcc, takes just one year to complete. It typically prepares students to become Certified Public Accountants, and provides in-depth knowledge about regulatory and tax codes, technical accounting, and consulting, among other things. Some programs, like the one at Indiana University, are geared mostly towards new market entrants—that is, people who are looking to break into the world of professional accounting. Entering the job market with graduate-level credentials is a great way for new applicants to set themselves apart. These grads are often particularly attractive to younger firms looking to pick up top talent right away.

Others, like the Executive MAcc at Vanderbilt, are designed more with a seasoned professional in mind. Many of the larger financial powerhouses send their rising talent to programs like this in order to train them in the newest techniques while still keeping them on the payroll. This sort of work-and-learn arrangement is often very beneficial for both students and employers: the students get the experience and insight that comes with a top-notch graduate education, while employers guarantee that the knowledge gleaned will be used to help advance their strategies and strengthen their own performance.

“One reason for hope is that the direct economic fallout from the rich world’s disaster is manageable,” The Economist wrote as the dust settled on 2008. That management is still ongoing, though. Properly balancing the need for future planning with damage mitigation and preventative measures today requires a new sort of finance professional with a new sort of knowledge. Pursuing a graduate education is one of the best ways to procure these skills, and may actually be one of the only ways to prevent another disaster from sweeping the markets. Regulations and oversight are important, but at the end of the day, it’s the feet on the trading floor and the minds behind the investment calculators that are really shaping the future.

About the Author:

Valerie Harris is a writer and researcher for MastersDegreeOnline.org. When she’s not writing she enjoys kayaking and hiking with her collie Roxy.

 

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