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Session 1793

Developing Financial Literacy in Budding Entrepreneurs

Thomas O’Neal and Dennis Kulonda University of Central Florida

Abstract

Most engineering curricula devote little time to the development of financial literacy among engineering students. Many civil and industrial engineers obtain some exposure in an undergraduate engineering economics course; but these courses generally focus primarily on the time value of money and the comparison of alternatives based upon discounted cash flow. Even the ubiquitous topic of taxes on income is deferred until late in the course.

Resolving this dilemma, short of enrolling in Accounting 101, appears to be difficult at best. Fortunately, there are materials which can convey the concepts required to understanding accounting principles, processes and underlying concepts at a level that will enable engineers to work productively with the bankers, investors and accountants who will play a huge role in any new venture. These materials can accomplish that in a finite numbers of class sessions through the use of case materials. Cases based upon an entrepreneurial scenario both motivate and energize class discussions. This paper will review the materials available to develop financial literacy and explain their use in a three-session module which could be included in an entrepreneurship course or a senior design course The presentation will focus on the use of a specific case to convey the essentials of accrual accounting to a novice audience.

Introduction

Teaching financial accounting to engineering managers is a contentious proposition. Those who argue for this content view the material as important and essential in providing a business perspective for engineering students. Those who argue against including accounting courses in the curriculum usually are reluctant to sacrifice the space in the curriculum because of the rapid expansion of technical material in the engineering disciplines. Both arguments have merits and some compromise is needed. Certainly it is difficult to justify the usual two-course sequence of financial and managerial accounting usually required in the business school curricula. Even the single combined course offered in some business schools seems too a large price to pay according to many engineering faculty. Since the students usually find the accounting material uninteresting and in their view, unimportant, they tend to side with the latter faculty group creating even more impetus for the technology driven argument, i.e., avoid the topic altogether.

Proceedings of the 2004 American Society for Engineering Education Annual Conference & Exposition Copyright , 2004, American Society for Engineering Education

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Kulonda, D., & O'Neal, T. (2004, June), Developing Financial Literacy In Budding Entrepreneurs Paper presented at 2004 Annual Conference, Salt Lake City, Utah. 10.18260/1-2--14090