Mathematics is indispensable to economics and business. Mathematics is compulsory for students of accounting and business from the diploma program up to the graduate program. For undergraduate students, mathematics-related courses are even given in two to three semesters. They are given under different course names: mathematics for economics, mathematics for business, mathematics of finance, mathematical analysis, quantitative methods, quantitative analysis, and management science. The problem is, in most universities, students of accounting and business only learn mathematics that is of little relevance to them but of high relevance to students of economics. This paper tries to criticize the relevancies of the contents of the mathematics courses for accounting and business students.
To support the career of accounting and business graduates, mathematics taught to them should be differentiated from mathematics for economics students. For accounting and business students, the topics of set theory, limit, differentiation, partial and total derivatives, matrices, unconstrained and constrained optimization, and integration, all of which are covered in mathematics for economics, are just “nice to know”. But, they fail to be “essential to know.” It is much more important for the students of accounting and business to know how to make a savings schedule for financial/pension planning; calculations of various yields, returns, interest rates, and stock indices; and valuations of any assets and securities (stocks and bonds) using present value approach.
The above skills are needed by any accountant or finance manager and anyone working in the finance-related institutions such as banks, leasing, insurance, pension funds, and security companies. Such knowledge is also required for any cash surplus (investors) to select the investment with the highest return, given risk; for any cash deficit (borrower) to obtain the cheapest financing; and for anyone dealing with banks.
Source: Budi Frensidy, Accounting Department, Faculty of Economics – University of Indonesia
Presented at the National Seminar on Mathematics 2007, Catholic University of Parahyangan
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