Magazine article Strategic Finance

Improving Critical Thinking through Data Analysis: The Process for Analyzing Data Provides Accountants, Financial Managers, and Auditors an Opportunity to Develop and Grow Their Critical Thinking Skills

Magazine article Strategic Finance

Improving Critical Thinking through Data Analysis: The Process for Analyzing Data Provides Accountants, Financial Managers, and Auditors an Opportunity to Develop and Grow Their Critical Thinking Skills

Article excerpt

Companies today expect their accounting, finance, and audit professionals to be adept critical thinkers. But what that actually entails can be difficult to describe. As noted in the October 21, 2014, article "Bosses Seek 'Critical Thinking,' But What Is That?" from The Wall Street Journal, there is no generally accepted definition of critical thinking. And while accountants, financial managers, and auditors must be able to improve their critical thinking over time, practical guidance on how to develop these skills is scarce.

We found that data analysis, another important skill for those in accounting, finance, and auditing, is an ideal venue for practicing critical thinking. The two concepts are intertwined: Improving one will ostensibly improve the other, and vice versa. We have formulated a straightforward, practical definition of critical thinking and, using a case study, will illustrate this connected relationship. With that understanding, it should be easier for accounting, finance, and audit practitioners and students to improve their critical thinking skills.

WHAT IS CRITICAL THINKING?

We asked Jeff Thomson, president and CEO of IMA[R] (Institute of Management Accountants), why today's accountants, financial managers, and auditors must have strong critical thinking skills. He said, "CFO teams have expanded their influence and accountability beyond value stewardship to include value creation, with increasing responsibility for strategy, operations, and technology. To step up to this challenge, all members of the CFO team must think critically about strategy and operations to effect smart decisions."

But it's tough to pin down what "critical thinking" really means. In The Wall Street Journal article, EY Americas Director of Recruiting Dan Black explained, "It's one of those [terms]--like diversity was, like big data is-where everyone talks about it but there are 50 different ways to define it." The article also noted, "Critical thinking may be similar to U.S. Supreme Court Justice Potter Stewart's famous threshold for obscenity: You know it when you see it, says Jerry Houser, associate dean and director of career services at Willamette University in Salem, Ore."

Given its importance, we believed a simple, concrete definition would form a basis for improving critical thinking. We studied published descriptions of critical thinking and asked selected finance, accounting, and audit experts to share their thoughts about the concept. From that research, we concluded that critical thinking must involve curiosity, creativity, skepticism, analysis, and logic. (See "Critical Thinking" for our full definition.)

This definition confirms that improving critical thinking skills is possible. There isn't an aspect of it that is unobtainable. Although some people are innately more curious, creative, or skeptical than others, everyone can exercise these personal attributes to some degree. Likewise, while some people are naturally better analytical and logical thinkers, everyone can improve these skills through practice, education, and training.

Employers justifiably expect entry-level accounting, finance, and audit professionals to demonstrate strong critical thinking skills. University professors can help their students meet this expectation by challenging them to think critically in their coursework. One way to do this is to assign practical activities, such as real-world case studies, that rouse students' curiosity, creativity, and skepticism--and compel the students to analyze evidence and formulate logical conclusions.

But critical thinking growth shouldn't stop when someone graduates from college. Accountants, financial managers, and auditors must continue to develop their critical thinking proficiency throughout their careers. They should always look for opportunities in their day-to-day work and continuing professional education programs to apply curiosity, creativity, skepticism, analysis, and logic. …

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