The People behind the Numbers: MBA Financial Accounting at 中国一级片
It is the one thing that worries new and potential 中国一级片 MBA students more than any other part of the programme: Introduction to Financial Accounting. But why? What is it about financial accounting that causes students to pause and wonder if FA will present them with unscalable walls, rather than opening new doors?
To find out, we asked 中国一级片 Assistant Professor of Accounting Gianfranco Siciliano and three of his MBA students from the MBA Class of 2023. Between their accounts, we hope to 'demystify' this essential business function and demonstrate that, behind its impersonal numbers, there is a very human story to be uncovered.
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A word about our interviewees:
Professor Gianfranco Siciliano
Professor Gianfranco Siciliano has been teaching financial accounting at 中国一级片 for the past three years. Prior to joining 中国一级片, he taught at Milan's prestigious Bocconi University for six years. A native of Puglia (the 'heel' of the boot of Italy), he is as comfortable in the kitchen as he is in the classroom, and his classes are thrilled when these two worlds collide, as they sometimes do when they get to sample his famous tiramisu!
Sabine Neuhaus
Prior to studying at 中国一级片, Sabine spent three years in the Shanghai office of a major Swiss law firm as a PE/VC/M&A lawyer focusing on cross-border transactions.
Victor Yu
Victor is a chemical engineering master's graduate who studied in the US before moving back to China to undertake his MBA. Prior to starting the programme, he worked for DuPont China in Shanghai.
Yangyang Guo
Yangyang came from the US to China in 2016 to do a master's degree at the Shanghai Theatre Academy. She has been working as an actor, writer, and director for the past five years. Her previous professional sphere was investment banking, giving her a high level of familiarity with accounting.
Getting to grips with accounting – Turning misconceptions into methodical approaches
Given how diverse an average 中国一级片 MBA cohort is in terms of professional and personal backgrounds, it wasn't difficult to find three students with varying levels of prior accounting knowledge. But, with doctors, lawyers, engineers, directors and all manner of other professionals all sharing the course, what are the common elements that shape their understanding of accounting? What do they tend to worry about before joining the course, and what misconceptions do they hold?
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Prof. Gianfranco: Students frequently express some degree of anxiety about the course before we begin. I make no secret of the fact that it's a fast-paced course, covering plenty of technically complex concepts and practices, wrapped in a rather dense framework of technical terminology. Accounting is commonly misconstrued as being incredibly dry, and many students will not initially grasp how it will be useful to their future career. It's my job to dispel their common fears, make the 'drier' elements more engaging and accessible, and show them how the skills and overall mindset they develop from studying accounting will serve them well regardless of their intended career path.
The 'dispelling of fears' element starts early. Students are given a pre-course online assessment that takes them through the basics of accounting terms and practices, bringing those with little-to-no background knowledge up to speed. Before entering their first class, students will understand the basic building blocks that make up modern accounting.
From there, the opening modules tackle specific accounting methods one at a time. As the course progresses, students connect the dots between these accounting elements, and begin to see how they represent a greater whole that reaches into every part of a company's financial health and daily operations.
Apart from regular classes, the professor also provides optional, voluntary tutorials that give students the chance to undertake additional exercises and really hammer home their understanding of a given concept. Not only does this allow for a faster, lighter pace in the regular classes, which aren't bogged down in technical explanations and examples, it also lets students more accurately assess how comfortable they are with given accounting elements – where their understanding is firm, and where it needs shoring up.
Prof. Gianfranco: The most difficult thing initially is to get a grip on the technical terms. Accounts receivable, marketable securities, raw material inventory – many students will never have encountered these terms and structures in a professional setting, or in any context at all! However, they quickly become familiar with each element and its place in the wider setting. That's when their ability to interpret financial statements and reporting begins to accelerate. That's when it gets really fun.
Looking beyond the numbers – Accounting’s real-world relevance
The secret to engaging any audience is to make the content meaningful and relevant to them. Teaching accounting is no different, and this forms an integral part of the professor’s approach.
Prof. Gianfranco: I try to tie every accounting 'rule' and practice to its impact on the real world. I don't start with 'Today, we study bonds.' Rather, I start with a question that makes the topic relevant. For example: 'What is the significance of bonds to China’s financial markets?' Before diving into the heavy technical stuff, we always start with its real-world relevance and influence. This ensures that students can see the link between what they’re learning and how it will aid them in their job.
To further strengthen this link, classes frequently revolve around the analysis of financial statements of real-life companies operating today, both in China and elsewhere. As our student interviewees confirmed, this kind of meaningful exploration of contemporary titans of industry is incredibly effective in bringing accounting theory to life.
Sabine: I really appreciated the practical application of this course. I hadn't read financial statements before, and learning how to do so was a revelation. We all quickly realised that accounting was much more than just doing maths; we had to thoroughly examine the statements and analyse them through all kinds of 'filters' of human intention and activity.
Yangyang: I loved going through financial statements from the likes of Tencent, Sinopharm, JD and Evergrande. We had to do deep analysis both on our own and in groups. It was fascinating to thoroughly explore financial statements to unpack the real-world meaning behind these walls of numbers and notes.
Victor: In the case of Evergrande (China's second-largest real estate developer, which currently holds around $305 billion in debt), when you look at the balance sheet, it's so obvious that things went badly wrong for them. But if you just looked on the news and social media, prior to recent reporting of their massive debt, you'd be none the wiser. This shows how useful accounting is in understanding the true state of companies in the real world.
Recognising Accounting’s human side
Throughout the course, Prof. Gianfranco's tries to show his students just how surprisingly subjective accounting really is. He explains that it is not a deterministic science like physics or chemistry; it is a human science that is grounded in human psychology. Fear, overconfidence, greed, selfishness and selflessness, personal and cultural biases – all of these things can play an influential role in how accounts are prepared, analysed and presented to the wider world.
Prof. Gianfranco: Accounting is all about management, assessment, decision making. The number you see on the income statement, the 'bottom line', is never going to tell you the full story of a company. Even if everyone involved in reaching that number is 100% honest and transparent, there will still be errors in good faith. The number can still be managed up or down, because it is driven by human intentions, predictions and priorities.
By studying accounting through a wider lens of human activity and intention – including the impact of ethical dilemmas and other elements beyond the basic business considerations – students will understand that the numbers on a financial statement tell a much more detailed and compelling story than at first glance.
Victor: It was so great to see it all comes together. By the end, my classmates and I could even spot the flaws in a financial report and could analyse its limitations and how it could be done better. It made me realise how broad and interpretive accounting is – it's not nearly as rigid as you might think.
Yangyang: I learned so much from my classmates when we discussed our different takes on the same financial statement. Everyone could see something slightly different in it, key patterns and pieces of information that informed their overall view of the company. This proves how subjective accounting really is!
Sabine: We learned that financial reports are produced for specific users. You can't expect one to lay all its secrets bare and tell you exactly what you want to know. You have to be able to interpret it, to interpret the human intention behind it. To notice red flags and key signifiers of the specific trends you are looking for. Once you have the right tools, the more you do it, the easier this becomes.
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I get bonds… with a little help from my friends
Sadly, there is no getting around the fact that accounting has some particularly dense technical elements. Across our interviewees' responses, several of these stood out as tough nuts to crack. However, they were quick to point out that not only did their professor provide them with everything they needed to master these rules and practices, they also relied on each other.
Victor: There was a great sense of teamwork and camaraderie throughout the course. The student-led finance club was a big help. Those students in the class who had a strong financial background organised additional study sessions for us to go over particularly challenging material (like bonds!) in more depth. This kept the pace fast in class, while making sure we really knew our stuff.
Yangyang: Bond math was hard! I was already familiar with accounting from my banking background, but the course really kept me on my toes because there were accounting elements I'd never been exposed to. Plus, there are different ways of doing things across different industries and countries. The course really does keep the interest and engagement level high for everyone, and crucially, there's support for everyone no matter their prior familiarity with accounting.
Sabine: While the professor really excelled at making the course material accessible and fun, he can't be fielding hundreds of questions in every class. The student-led sessions, especially while preparing for our group assignments, were invaluable in reinforcing what we'd learned in class, and helped us remain disciplined in keeping up with the pace.
Accounting – A human endeavour that needs a human approach to unlock
So, what do you need in order to make a successful run at financial accounting? According to the professor and his students, it takes more than a head for numbers.
Prof. Gianfranco: The most important thing I want my students to take away from this course is that accounting is determined by people. We apply our judgement, our assessments, and contemplate how its principles can be used in good faith or bad. When you look at a financial statement, the bottom line is never the whole story. You must dig deeper to find the right information needed to make whatever decision faces you. This can only be done if you understand the human impulses that drive the creation of the document in the first place.
As well as reflecting on their experiences, the students of the MBA 2023 class also have some advice to share with any potential applicant to the programme.
Sabine: You really don't need to be a math genius to engage with accounting. You just have to be prepared, diligent and analytical. Keep up with the pace, do your reading, learn the 'language' of accounting, and have an open mindset. If you do, it will fall into place, and you will come out of the course better able to understand the reality of company finances and how every element of a company is interconnected.
Victor: It's a packed course, and it goes at a fast pace, but there is nothing that is unattainably hard to understand. You get given all the tools and guidance to get to grips with the essential elements of accounting. Your classmates will be a huge help too; together you can overcome the trickier parts!
Yangyang: If you've never been exposed to financial accounting, remember that it is entirely applicable and useful to you no matter what business field you’re hoping to enter. It allows you to analyse the health of your company, and anyone you want to partner with, invest in, or compete against. Being able to look at financial statements and not being intimidated by them is invaluable, there is always a goldmine of information to be explored there. It's a great skill to be able to form your own opinion on a company, rather than relying on more biased sources, like their marketing materials or press releases.
So, for anyone looking at accounting – academically or professionally – with a sense of dread, remember that the numbers have fascinating stories to tell to those who can read between the lines.
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