Yale should offer an undergraduate accounting major.
“But Yale is a liberal arts college. Accounting is a trade.” “Yale trains leaders — entrepreneurs, CEOs, heads of state. Accountants are ‘bean counters’ who wear pocket protectors and green eyeshades.”
Not so fast.
I was a Directed Studies student and philosophy major at Yale. Like most undergraduates, I overlooked the one accounting course offered by Yale College. It’s easily missed at the top of the Blue Book.
But now, in what may be an example of situational irony given my non-accounting background, I’m an in-house attorney for a large national certified public accounting firm. I work with hundreds of accountants at all stages of their careers across the U.S. I have a front-row seat to the dynamic changes occurring within the accounting profession. And I maintain that Yale undergraduates would benefit from the education and opportunities to serve as leaders in society offered through the serious study of accounting.
The accounting field has changed since the 1960s when President Brewster declared Yale’s mission to train “1,000 male leaders a year.” Accountants today are not number crunchers relegated to the back office. Instead, professionals trained in accounting are called to lead in the private, public and nonprofit sectors. Yale could help to enhance and ensure integrity in the global business community by rigorously training undergraduates in accounting.
But first, what exactly is accounting?
Accounting, finance and economics are considered the three “languages of business” to support decision making under uncertainty. Professionals in each of these fields evaluate real-life markets, conditions and events. They use data and analytical thinking to help individuals, businesses, industries and governments to plan, strategize, make sound financial decisions and set fiscal policies. Such professionals, however, approach such goals from different angles.
Broadly speaking, as explained by Rick Antle, the William S. Beinecke Professor of Accounting at the School of Management, “accounting is a set of agreed-upon rules to produce the evolving financial story of an organization.” Accounting focuses on historical information as presented on financial statements —balance sheets, income statements, cash flow statements — to measure, process and share information about businesses and individuals. By examining past financial transactions, the practice of accounting also studies the future benefit and valuation of assets. Accounting theory and judicious accounting practice, Professor Antle has argued, serve as the infrastructure for the smooth functioning of society.
In contrast to accounting’s focus on historical information, finance focuses on forward-looking information. Finance is a broad term for the management of assets and liabilities and the planning of future growth. Finally, economics focuses on the impacts of external forces on the distribution of resources. Economics is a social science that examines human behavior and is concerned with the production, consumption and transfer of goods and services.
Professionals trained in accounting develop critical-thinking skills that are essential to running a business, ensuring statutory compliance, establishing a company’s internal controls and “tone at the top” and providing investors, managers and governments with quantitative financial information that is necessary to make impactful and ethical decisions. Yale undergraduates should have the option to study this challenging and evolving field as a major and acquire deep accounting knowledge to benefit society as leaders. Here are a few reasons why.
The Modern Study of Accounting is Consistent with a Liberal Arts Education
The Yale College Programs of Study states that a liberal arts education “aims to cultivate a broadly informed, highly disciplined intellect without specifying in advance how that intellect will be used.” The goal “is to instill knowledge and skills that students can bring to bear in whatever work they eventually choose” rather than “train students in the particulars of a given career.” The modern study of accounting aligns with this mission.
As the world becomes increasingly complex, leaders in myriad fields (e.g., law, finance, technology, media, sustainability) must comprehend a wide variety of accounting topics. Such topics range from accounting for employee benefits and valuation of novel asset classes, such as cryptocurrency, to Environmental/Social/Governance and taxation. Entrepreneurs and CEOs must know the financial reporting, internal control and independent audit requirements for public companies under the Sarbanes-Oxley Act. Politicians must understand budgets and financial statements.
To meet these demands, the modern study of accounting embodies conceptual breadth and technical depth suitable to a liberal arts major. Accounting students learn technical subjects in addition to theory, critical thinking and strategy. An accounting curriculum includes audit and tax as well as macro and microeconomics, data analytics, statistics, business law and ethics, cybersecurity and computer information systems. Indeed, the American Institute of Certified Public Accountants stresses that accounting education must evolve to “recognize the rapidly changing skills and competencies the practice of accounting requires today and will require in the future.” Liberal arts students trained in accounting can cultivate their intellects and lead in countless arenas.
Accounting is a Truth-Seeking Endeavor that Can Serve the Public Interest
Yale’s motto is “Light and Truth.” President Salovey has emphasized the University’s truth-seeking mission and urged undergraduates to “fine-tune your ability to sift fact from falsehood.” Accounting — in particular, the subfield of assurance — is consistent with this imperative.
In an assurance service, an independent professional applies procedures designed to probe the credibility of an entity’s information and reports on the results. An audit is the highest level of assurance service and is intended to provide comfort on the accuracy of financial statements. CPAs must apply professional skepticism — generally defined as an attitude that includes a questioning mind and a critical assessment of evidence — in performing this probing audit work. Users of financial information often rely on the results of audits and other assurance procedures to make decisions.
Recent corporate failures and securities scandals — FTX, Theranos, WeWork, not to mention Enron, Madoff, and the 2008 financial crisis — have placed accounting and auditing in the spotlight. Even Yale, which has an internal auditing department as well as a Corporation Audit Committee that liaises with external auditors, has been the victim of financial fraud resulting from exploitation of weaknesses in internal accounting controls. Accounting choices and audit results impact the University’s own governance and decision making. Yale students studying the independent truth-seeking mission and techniques of assurance would learn how assurance work is crucial to good corporate governance and fraud prevention. This work, in turn, protects the public including investors, employees, consumers and other stakeholders.
A Major in Accounting will Complement the Major in Economics and Provide Career Opportunities
Economics is currently the most popular major at Yale. When I was an undergraduate, it was history. An accounting major would complement both the economics and history majors, given accounting’s focus on telling the story of an organization through historical financial information. Just as economics and history majors conduct original research, undergraduates could conduct impactful research in accounting like that done by students in the School of Management. Indeed, accounting research has influenced the U.S. Securities and Exchange Commission’s rulemaking processes, which in turn impact capital markets and the goal of investor protection.
Students often major in economics to enter fields like finance and consulting. An accounting major at Yale would open the pathway to the CPA credential — which generally requires at least a bachelor’s degree in accounting in addition to an exam and work experience — and provide additional long-term opportunities in professional services and other fields. There is currently a growing need for but dwindling supply of accountants. The major could also usher more women, minority and first-generation students into business careers where they still remain underrepresented.
I urge Yale College’s Committee on Majors to collaborate with SOM faculty to establish an undergraduate accounting major. It’s time.
Alexandra L. Newman (Yale University, B.A. 2005 with Distinction in Philosophy; Northwestern University School of Law, J.D. 2010), is a Senior Counsel and Director at the national audit, tax and advisory firm of Grant Thornton LLP (the U.S. member firm of Grant Thornton International Ltd.) in Chicago, IL. She served as President of the Yale Club of Chicago (2020-22), which received a 2022 Yale Alumni Association Board of Governors Excellence Award. Contact her at firstname.lastname@example.org. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views or positions of any entity she represents.