Associate Professor Focuses Students on Impacts of Accounting

On the first day of her classes, Dr. Yuan Zhang dispels a misconception students may have about accounting.

“Many people think accounting is just bookkeeping, but it’s actually much more beyond that,” said Zhang, associate professor of accounting in the Naveen Jindal School of Management. “I always tell my students that accounting has economic consequences. It’s not just putting some numbers in books and that’s it. People actually make important economic decisions with those numbers.”

Zhang became fascinated with the subject after enrolling in the accounting program as an undergraduate at Tsinghua University in Bejing, China.

The words of former Chinese Premier Zhu Rongji, founding dean of Tsinghua University’s School of Economics and Management, made a major impact on Zhang, who grew up in China. The dean emphasized the need for boosting the accounting profession to help grow the rapidly developing economy.

“I said maybe this is a good start for my future,” said Zhang, who became one of the program’s first graduates.

Zhang went on to earn a PhD at the University of Southern California. She taught at Columbia Business School before joining UT Dallas last summer. She said living in Dallas came as a big change after living in a tiny Manhattan apartment. One of the best parts is having a yard, said Zhang, who has found a new hobby in gardening.

Dr. Hasan Pirkul, dean of the Jindal School and Caruth Chair of Management, said that he is pleased to have Zhang on the school’s faculty.

“Through her research and publications, Dr. Zhang is making important contributions to advancing understanding about the impact that accounting decisions have on the economy,” Pirkul said. “Our students will benefit greatly from her expertise in this area.”

The professor’s research focuses on how accounting affects individual businesses and the capital market. A forthcoming article examines whether companies make better investment decisions – and boost returns to shareholders – after disclosing material weaknesses in internal controls and working to improve the companies’ financial reporting.

The professor hopes to inspire student interest in accounting and financial reporting. Zhang said she uses real-life examples to illustrate the profession’s important role. Her teaching philosophy is that instruction in accounting should be oriented toward practical knowledge as opposed to only theoretical abstractions.

“Financial information affects decision making,” she said. “For example, when a company announces earnings, the market will react.”

Zhang said it is important to ensure the quality of financial information and that businesses report their financial information in a credible and ethical way.

“Enron, it’s gone. Arthur Andersen, it’s gone,” Zhang said. “They didn’t do their accounting and auditing the right way.”