(03-17-2017 04:00 PM)Frank the Tank Wrote:
(03-17-2017 01:24 PM)MplsBison Wrote: Wait a second, I thought accounting and finance were different beasts?
Accounting, I think of a nerdy guy sitting at a desk with a calculator and a spreadsheet.
Finance, I think of Wall St guy in a suit, making huge money with inside information, then charging $1000 in sushi to the company expense card.
Uh, accounting IS finance. The Wall Street investment bank-type jobs that most people think of as "finance" constitute a tiny percentage of finance jobs. At the same time, financial trading firms actually want computer science and engineering grads more than business school grads today since programming is such a huge part of that field now. Otherwise, the vast majority of corporate finance jobs require a lot of accounting skills.
Let's put it this way: accounting is to finance as coding is to tech. There might be some tech jobs out there where you don't need coding skills and there might be some finance jobs out there where you don't need accounting skills, but those are few and far between. It's not an accident that even middle tier colleges still have generally good placement for accounting majors while they're all over the map for their other business majors. You can teach finance to virtually any major fairly easily (which is how those Ivy League liberal arts grads end up getting hired by Wall Street investment banks based on prestige), but accounting skills are pretty hard to learn on the job.
Source: I was a finance major at Illinois. Unless my kids get into an Ivy-level school (where your major doesn't matter), I'd highly recommend them to major in accounting if they want to be a business major in the future (or, even better, major in computer science or engineering and get an MBA later on). It didn't ultimately end up mattering in my personal situation since I went to law school, but accounting is definitely more useful for the vast majority of students (e.g. the people that aren't going to Harvard/Wharton/Stanford).
No. Accounting is one part of finance, but it's not the biggest part and it's not even the same type of accounting that accountants use. Financial accounting and non-financial accounting (i.e. accounting used by the IRS and accountants) are similar in the same way that criminal law is similar to contract law: they're in the same academic college, but training in one doesn't do anything to make you better in the other.
Accounting is backward looking. It looks at how to accurately record past transactions (i.e., audits) and is utilized to minimize taxes.
Finance is forward looking. It focuses on making smart future transactions.
There's three types of finance, and only one of them requires more than a passing understanding of non-financial accounting. Corporate finance looks at forecasting and at obtaining funds (i.e. relationships with bankers or large potential stockholders). Project finance looks at making smart investments in business assets. Investment finance (also called asset pricing) looks at making smart investments in financial assets (i.e. stocks and bonds, rather than buying a new office building or a new factory like they do in project finance).
To be a CFO, you can come from either background. But if you're a CFO who is a finance person you typically need a very strong accounting person as your number 2 (and vice-versa).
At the undergrad level, finance majors have the second best job placements outside of engineering or the hard sciences (physics, biology, chemistry). The first? Accounting. But there's a lot higher standard deviation in starting finance salaries than starting accounting salaries (i.e. top finance majors make more than top accounting majors, but bottom finance majors make a lot less than bottom accounting majors).
Source: I'm a finance professor (with a PhD), and in my past life I worked in a small enough company that we had to interact very closely with the accountants.