Trisha
How applicable is the major of Economics to the Accounting career?
I am currently an undergraduate at a UC where they do not have a major that is strictly accounting. The university requires us to do an Economics/Accounting major and I was just curious as to how the two may relate in the real world. #business #accounting #economics
4 answers
Ben’s Answer
Hi Trisha,
This an excellent question! Economics a fantastic subject to study! I might be a little bit biased because I am economics major but it definitely a great field to study.
Economics is a really broad subject that can be used to analyze almost anything but summarized it can be brought down the this phrase.
"Economics is the study how us humans allocate our scarce resources in a world with unlimited wants." -Ben Landis
Econ totally relates with accounting. When you do accounting you need to factor how to optimize your company's financial resources. Your knowledge of economics will be a great way to supplement your knowledge of accounting. Both accounting and economics are both subject that require good analytic skills and you will develop those skills by studying both subjects. You're on the right track studying both topics!
Best of luck with your studies. Feel free to reach out in the comments if you have any further questions!
Ben Landis
Thank you so much for the helpful advice! :)
Trisha
Bob Gallagher
Bob’s Answer
I was a liberal arts economics major and later got my masters in accounting. For me, the most useful part of my economics major was the analytical framework that you learn. The way you approach a problem analytically, looking at the cause and effect and relationships between variables (economic, social, or business variables). Also, the oral and written communication skills I acquired as a liberal arts major have also helped my tremendously as and accountant/auditor/business person.
Bob recommends the following next steps:
David Belt
David’s Answer
Frank Salerno
Frank’s Answer
Trisha -
Great question. These fields are broadly related in terms of business concepts, but be aware that there are specific areas within the accounting profession that focus on "financial language" presentation. For example, Generally Accepted Accounting Principles ("GAAP") is a core reporting language that many organizations must comply with. This specific core accounting competency is not an economics area of conversation. Economics will introduce many concepts across consumption, supply, demand, etc. that accounting will refer to but not focus on.
Simply put, both areas of study complement one another and will provide a unique combined skillset. Additionally, you will be prepared to sit for the CPA Exam or pursue a deeper post-graduate education (MBA, MS in Accounting, etc.).
To Frank's point. Economics and accounting will often not view a transaction the same, but this helps you in advising your clients in ensuring the transaction accomplishes the economic purpose they're pursuing while achieving the desired accounting (financial or tax) outcome.
David Belt