critical thinking in finance

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How to develop critical thinking skills in finance & accounting

Stephen Moir

When it comes to finance and accounting roles, employers are increasingly looking for problem solvers, not a number-crunchers. Over recent years, we have seen an increasing demand for people who can analyse and interpret data and think critically.

What is critical thinking.

A critical thinker is a problem solver. They are able to evaluate complex situations, weigh-up different options and reach logical (and often quite creative) conclusions.

Critical thinkers are highly-valued by employers as they innovate and make improvements, without taking unnecessary risks. Chartered Accountants Australia and New Zealand recently identified that it was in the top 10 attributes that will help you get noticed in the job market.

Why are critical thinking skills important?

Once you have learnt how to develop critical thinking skills you will be better able to add value to data, interpret trends within the business, understand how people and performance intersect and take-on broader commercial outlook that benefits the business.

How to develop critical thinking skills

Critical thinking comes naturally to some people, but it is also a skill than can be practiced. Here are some tips for how to develop your own critical thinking skills :

Examine: Self-awareness is the foundation of critical thinking. It allows you to play to your strengths and address your weaknesses. Question how and why you do things the way you do.
Analyse: Look for opportunities to grow and improve. Consider alternative solutions to the problems you encounter in your work.
Explain: Clear communication is key. Get into the habit of talking through your reasoning and conclusions with colleagues.
Innovate: Develop an independent mind-set. Find ways to think outside the box and challenge the status quo. Make sure your decisions are well-thought out. A critical thinker is logical as well as creative.
Learn: Keep an open and well-oiled mind. Brush-up on your problem-solving skills by doing brain-teasers or trying to solve problems backwards. Keep up-to-date with professional learning opportunities . You may also need to unlearn past mindsets in order to grow and move forward.

How to apply critical thinking skills in your current role

Could you implement a new process or procedure that enhances performance or profitability? You might also consider volunteering for a new project or responsibility that gives you the opportunity to innovate and take on a new challenge. It’s a great way to broaden your skillset and gain exposure to other parts of the business.

Surround yourself with other critical thinkers in the organisation and work together towards achieving a problem-solving culture. Ask questions, and always look for opportunities for continual learning.

Changing roles to develop critical thinking skills

At Moir Group, we are passionate about finding the right cultural fit between people and the organisations they work with. If you are a critical thinker, it’s worth looking for a stimulating work environment that encourages innovation and non-conformist thinking when considering your next role.

How to demonstrate critical thinking skills at an interview

During an interview, use examples from your past experiences to demonstrate your problem-solving abilities. Show that you can be analytical, weigh-up pros and cons, consider other view points and be creative in your solutions. Clearly articulating your thought process is key.

Sometimes an interviewer will ask you to simplify the complex as a way of determining your clarity of thought. For example: “How would you explain the state of the economy to a kindergarten child?” In instances like these, the focus will be on how you explain your reasoning, rather than achieving a ‘right’ answer. Learn more here.

If you’re looking to take that next step in your career, we can help. Get in touch with us here .

2 Responses to “How to develop critical thinking skills in finance & accounting”

Hi Stephen,

The above is very useful and very valuable for employers. However my understanding of critical thinking is slightly different from above. I recently listened to a course in critical thinking by Professor Steven Novella of Yale School of Medicine. To keep it simple it is to do with assessing the veracity of views and statements made by oneself, others and media being constantly aware of the many biases, the flaws and fabrications of memory, half truths, unspoken truths, and even lies. So it becomes key to adopt an inquisitive mindset, to look for external evidence that supports argument and not just wishful or hopeful thinking.

Just wanting to add to the debate as this is a really important area.

Hi Richard,

We are pleased that found this article useful. Thanks for your sharing your thoughts about critical thinking.

Financial knowledge and decision-making skills

Financial knowledge and decision-making skills help people make informed financial decisions through problem-solving, critical thinking, and an understanding of key financial facts and concepts.

Building financial knowledge and decision-making skills

How do we learn to make good financial choices? Learn more about the financial knowledge and decision-making skills building block and how it can help young people make the right decisions for their situation.

Importance of financial knowledge and decision-making skills

Strong financial knowledge and decision-making skills help people weigh options and make informed choices for their financial situations, such as deciding how and when to save and spend, comparing costs before a big purchase, and planning for retirement or other long-term savings.

Development of this building block

Financial knowledge and decision-making skills typically don’t develop until adolescence and young adulthood. During these years, they become more relevant, especially for youth who start to earn money, buy things on their own, manage a bank account, or borrow for education.

The tables that follow show what this building block looks like at three stages of development and how the skills and abilities relate to adult behavior associated with financial well-being.

Early childhood (ages 3–5)

Middle childhood (ages 6–12), adolescence and early adulthood (ages 13–21), teaching this building block.

Schools can provide opportunities for youth to practice financial behaviors, make financial decisions, and reflect on the outcomes and consequences of those decisions. Across the curriculum, teachers can provide opportunities for students to learn how to find and recognize reliable financial information, compare financial products, and do purposeful financial research in order to analyze options and make decisions.

Instructional strategies

Research shows that the following strategies can be effective to help people develop financial knowledge and decision-making skills.

Competency-based learning: Student-centered learning that encourages students to progress toward well-defined benchmarks to give them a sense of mastery and ownership over the skills and knowledge they are learning
Direct instruction: A structured, straightforward, teacher-directed approach that focuses on an explicit skill and typically includes a lecture, demonstration, or discussion
Personalized instruction: Teacher assesses each student’s needs, then tailors instruction to the individual student, including focusing and differentiating resources, strategies, supports, and pacing on that student’s needs to individualize learning
Project-based learning: A hands-on strategy in which students actively explore real-world challenges, answer meaningful questions, and accomplish relevant tasks and, in doing so, are encouraged to make their own decisions, perform their own research, overcome obstacles, and present their work to others
Simulation: Hands-on learning activities that use real-world scenarios to promote critical thinking and application of learning

Learning activities

Learning activities that nurture financial knowledge and decision making should support young people’s acquisition of factual knowledge, research and analysis skills, and deliberate financial decision-making. The types of activities that support these skills include the following.

Financial coaching and mentoring: Adults engage and encourage students (individually and in small groups) to develop financial capability and work toward financial goals
Financial simulations: Educational tools or activities that replicate real-world financial management situations and allow students to develop skills such as budgeting, comparison shopping, and investing by making mock decisions that result in realistic consequences
Real-world case studies: Stories that present realistic situations involving a dilemma, conflict, or problem to be negotiated or resolved by analyzing and evaluating a range of information and weighing the consequences of different decisions

Resources for teaching financial knowledge and decision-making skills

Search for classroom activities to nurture the development of financial knowledge and decision-making skills
Explore all strategies and learning activities for nurturing the building blocks

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June 02, 2017

By: Kurt F. Reding , CMA, CPA, CIA ; Carolyn Newman , CPA, CITP

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 ® (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.

ANALYZING DATA HELPS CRITICAL THINKING

Due to its iterative nature, data analysis is an ideal setting for developing critical thinking. When we asked Melissa Frazier, a retired vice president for audit and controls for Comfort Systems USA, about this, she said, “Critical thinking is key through each step in the data analysis process. If you don’t do a good job on each step, your result will be flawed or useless.”

The relationship also is reciprocal: While analyzing data strengthens critical thinking, critical thinking in turn helps data analysis. Jeff Thomson explains, “Data analysis and critical thinking skills are interdependent. Data analysis requires you to think critically by probing, connecting disparate facts, synthesizing, etc. Likewise, critical thinking is enabled by the ability to think analytically and apply tools to help extract insights and actionable information from data.”

But how does critical thinking as we define it merge with diagnostic data analysis? We developed a case study (see “CASE STUDY: Fraudulent Financial Reporting” below) to demonstrate how elements of critical thinking are needed at each step in the data analysis process. The case centers on Emersyn Grace, who was hired to establish an internal audit function for ACJ Company, a wholesaler. As she familiarizes herself with the company’s operations, Emersyn discovers some issues of concern that require her to employ critical thinking skills while further analyzing the company data.

Although the case study takes place within an internal audit setting, all accounting, finance, and audit professionals should be able to proficiently perform data analysis procedures like those Emersyn completed. Likewise, Emersyn exhibits critical thinking skills that all accountants, financial managers, and auditors should strive to emulate.

THE DATA ANALYSIS PROCESS

Diagnostic data analysis involves a basic process that requires critical thinking:

Identify data analysis opportunities,
Specify the objectives of the analysis,
Develop expectations and define anomalies,
Analyze the data and investigate anomalies,
Evaluate the results, and
Formulate a remedial action plan.

Analyzing data through this process requires accountants, financial managers, and auditors to apply their curiosity, creativity, skepticism, analysis, and logic. Let’s look at each step in more detail and see how Emersyn applied critical thinking skills in her data analysis.

Identify Data Analysis Opportunities

Accountants, financial managers, and auditors routinely analyze data as part of their day-to-day responsibilities, but they also need to be alert for and recognize unusual, unanticipated analysis opportunities. Critical thinkers’ curiosity inspires them to watch for potential analysis applications; their creativity enables them to consider what they see from different perspectives; and their skepticism empowers them to sense when what they see just doesn’t seem quite right.

Emersyn’s curiosity about ACJ Company—her eagerness to learn—prompted her to analyze its financial statements. Her creativity motivated her to analyze ACJ’s financial position and performance not only from a company-wide perspective but also from a store-by-store perspective. Her skepticism regarding the abnormalities she uncovered in the aggregated account balance data prompted her to extend her analysis by drilling down into the underlying, disaggregated transaction data.

Specify the Objectives of the Analysis

After identifying the data analysis opportunity, critical thinkers must plan the analysis. That begins with specifying appropriate objectives. For routine, day-to-day analyses, this is rather straightforward. Specifying the objectives for unforeseen data analysis projects is often driven by skepticism and requires creativity. Critical thinkers instinctively focus their attention on unusual circumstances and events they observe. Then they consider the reasons why the abnormalities may have occurred from various perspectives and set out to investigate them. The causes of unfavorable irregularities in business performance include things like operating inefficiencies, noncompliance with applicable laws and regulations, and fraud.

The objective of Emersyn’s premeditated financial statement analysis was motivated by curiosity, not skepticism; she simply wanted to enhance her understanding of ACJ Company’s financial position and performance. Her skepticism kicked in when she uncovered unanticipated abnormalities in specific account balances. Not willing to accept what she had discovered at face value and needing to be convinced that her concerns were warranted, she creatively refocused the objective of her data analysis to assessing the integrity of the underlying transactions.

Develop Expectations and Define Anomalies

Next, critical thinkers must establish expectations of data analysis outcomes and define data abnormalities that signal potential problems, such as inefficient operations, noncompliance with applicable laws, or fraud. Developing expectations and defining anomalies require analysis and logic. Critical thinkers carefully study the environmental factors that could affect the data, such as current economic conditions; the financial well-being of the company; the effectiveness of internal controls; changes in procedures, personnel, or technology; and the performance of comparable business units. Based on this inquiry, they formulate rational expectations regarding the outcomes of the data analysis and identify plausible indicators of problems they may observe during the analysis.

Emersyn’s understanding of ACJ Company was insufficient for her to establish legitimate expectations heading into her preliminary financial statement analysis. But her store-by-store comparison revealed anomalies in the aggregated account balance data of one store, which compelled her to reexamine the facts of the situation and proceed accordingly. She determined that she needed to investigate the detected anomalies by analyzing the disaggregated transaction data underlying the account balances of that store. Based on her financial statement analysis findings, Emersyn logically expected her follow-up transaction analysis to uncover anomalies.

Analyze the Data and Investigate Anomalies

Data analysis obviously involves “analysis,” which, by definition, is a key component of critical thinking. Critical thinkers systematically gather and examine relevant evidence using appropriate procedures. Skepticism compels them to assess all evidence critically, whether it corroborates or contradicts their predetermined expectations. They continuously question what they see and hear and rigorously investigate new evidence coming to their attention, including any anomalies.

Emersyn analyzed aggregated account balance data using an array of interrelated data analysis procedures: common-size financial statement analysis, ratio analysis, trend analysis, and internal benchmarking (comparing the financial position and performance of individual stores). She appropriately ascertained that some of the evidence she gathered and examined—the anomalies pertaining to particular accounts—warranted follow-up analysis. Realizing that analyzing disaggregated transaction data would provide evidence regarding the correctness of the aggregated account balance data, Emersyn used data analysis software to test the validity of transaction amounts included in the account balances.

Evaluate the Results

Next, the diagnostic data analysis results need to be evaluated, which requires logic. Critical thinkers understand that they must reach well-founded conclusions by properly interpreting evidence that’s persuasive—that is, it must be relevant, reliable, and sufficient.

Emersyn appropriately determined that her financial statement analysis hadn’t yielded evidence that was sufficient, relevant, and reliable enough for her to reasonably ascertain whether specific account balances of one particular store were incorrect. But her follow-up transaction analysis produced persuasive evidence, and she logically concluded that certain balances were misstated. Nevertheless, Emersyn wisely determined that she still didn’t have convincing evidence that the misstatements were caused by fraud.

Formulate a Remedial Action Plan

The final step is to formulate a sensible remedial action plan to address detected anomalies, which requires analysis, logic, and creativity. Critical thinkers understand that effective solutions treat the sources and causes of problems, not the symptoms. After diagnosing where and why anomalies originate, they innovatively prescribe practical, cost-effective remedies.

After detecting and uncovering control deficiencies that created an opportunity for a store manager to commit fraud, Emersyn reasonably and resourcefully prescribed controls designed specifically to effectively and efficiently reduce the risk of future fraudulent financial reporting by store managers.

WHAT ARE YOUR NEXT STEPS?

Entry-level accounting, finance, and audit professionals are expected to be adept critical thinkers. Moreover, they must continue to develop their critical thinking proficiency over the course of their careers. Adopting a straightforward, practical definition of critical thinking, like the one proposed in this article, is a sensible first step.

An appropriate next step that practitioners and students can take, with assistance from their mentors and teachers, is to measure their critical thinking proficiency using simple questions. Then they can identify and proactively engage in activities conducive to critical thinking. In time, engaging in accounting, finance, and audit assignments that require curiosity, creativity, skepticism, analysis, and logic will culminate in improved overall professional and scholastic performance.

CASE STUDY: FRAUDULENT FINANCIAL REPORTING

ACJ Company, a growing, family-owned wholesaler of electrical lighting fixtures and ceiling fans, is headquartered in Kansas City, Mo., and has five stores, each in a separate Midwestern city. Andrew Franklin, the founder and CEO of ACJ, hired Emersyn Grace away from her audit position with a public accounting firm in January 2017 to establish an internal audit function.

Financial Statement Analysis

Emersyn wanted to acclimate herself to her new position as quickly as possible. Knowing that analyzing ACJ Company’s financial statements would give her valuable insights about its financial position and performance, she prepared common-size financial statements and calculated financial ratios for ACJ and each of its stores for 2016 and 2015. She compared the 2016 and 2015 financial position and performance for ACJ as a whole and for each store. She also compared each store’s 2016 financial position and performance with those of the other stores and the overall company. Emersyn was eager to learn about the company, and she had no reason to question its overall financial position and performance or that of any store. Nevertheless, she began her analysis with an appropriate “trust but verify” mind-set.

Emersyn’s financial statement analysis showed that ACJ had a strong balance sheet and that its sales and net income had increased nicely from 2015 to 2016, as had the sales and net income for each of its stores. Yet, as illustrated in the ratio charts below, her analysis also produced some peculiar ratios for Store 4. Its gross margin percentage and number of days’ sales in accounts receivable had increased significantly from 2015 to 2016 and were abnormally high for 2016 relative to the other stores and ACJ as a whole. These results piqued Emersyn’s curiosity. Why had Store 4 been proportionately more profitable? Why had it collected its accounts receivable more slowly?

Emersyn considered these questions. Increased credit sales to riskier customers might have caused the growth in sales and slowdown in collecting accounts receivable, but it wouldn’t have caused the higher gross margin percentage by itself. Overstated ending inventory and understated cost of sales might explain the higher gross margin percentage, but it wouldn’t explain the slowdown in cash collections. Moreover, Emersyn’s analysis hadn’t revealed anything amiss with inventory and cost of sales.

Why had Store 4’s profitability improved and its collections from customers worsened at the same time? With that question, Emersyn’s curiosity shifted to skepticism when she surmised that one answer might be fraudulent financial reporting—that is, the intentional recording of fictitious sales. Realizing that she needed to dig deeper to corroborate her suspicions, Emersyn decided to analyze Store 4’s 2016 sales transactions.

Analysis Of Sales Transactions

Emersyn knew that if Store 4’s manager had intentionally recorded fictitious credit sales, he most likely wouldn’t have recorded the corresponding cost of sales. She also knew that accounts receivable associated with fictitious credit sales would never be collected. Accordingly, she set out to determine whether the store’s sales and accounts receivable were overstated. More specifically, Emersyn:

Asked an ACJ Company IT specialist to help her identify, locate, and access pertinent sales, accounts receivable, and inventory data stored in the company’s database system;
Imported the electronic data obtained from the system into data analysis software;
Verified the veracity of the data using predetermined control totals; and
Examined the data to determine whether there were any recorded credit sales for which no matching charges to cost of sales and no subsequent customer payments existed.

Emersyn expected to find both types of anomalies, and her analysis corroborated those expectations. She uncovered sales transactions with no corresponding cost of sales and no subsequent customer payments.

Although the nature of the misstatements in Store 4’s accounting records pointed to fraud, Emersyn knew that she hadn’t yet obtained convincing evidence of intentional wrongdoing. She discussed her findings with Andrew, who agreed that they were highly suspicious. Andrew was especially sad because the manager of Store 4 was his nephew, whom he had hired for that role early in 2016. To entice his nephew to leave his management position at a large corporation and accept the challenge of improving the performance of Store 4, Andrew had offered him a performance-based commission.

Andrew met with his nephew, who was at first defiant but then confessed to recording fictitious sales. He had felt tremendous pressure to prove to his uncle that he could increase sales and profits. Moreover, a significant amount of personal debt had made the temptation to exploit his uncle’s generosity irresistible.

The Remedial Action Plan

Emersyn realized that her recommendations for corrective action needed to target the source and cause of the accounting misstatements she had uncovered. The immediate source and direct cause of the misstatements—Store 4’s manager and his fraudulent financial reporting—were obvious to Emersyn. She knew that firing the manager and eliminating the incentive to commit fraud were necessary to fix the problem and that, to some extent, these steps might deter future frauds of a similar nature. But she also knew that these actions didn’t constitute a viable long-term solution by themselves.

Emersyn set out to learn how the fraud had been perpetrated and gone undetected throughout the year. She found that there were no IT controls in place to prevent Store 4’s manager from recording credit sales without recording the corresponding cost of sales. She also learned that ACJ Company’s senior management team had done virtually nothing during the year to oversee the operations and monitor the performance of Store 4.

Accordingly, Emersyn focused her proposed remediation on rectifying these control deficiencies in a cost-effective manner. She recommended that controls be built into ACJ’s accounting information system to preclude store managers from accessing their stores’ accounting records without first obtaining direct authorization from ACJ senior management. She also proposed implementing a monthly reporting process that would enable Andrew and ACJ’s CFO to monitor each store’s performance throughout the year.

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The UB MBA and MS Ambassadors Blog

My Top Four Finance Soft Skills

Written by: Claudia Cabrera, MS in Finance ’24

Over the past few years, we have seen how technological advances are driving unparalleled change. While talking with peers from different schools within UB, I realized that there is a misconception that both accounting and finance jobs mainly involve “number-crunching.”

Although some finance jobs are centered on a transactional approach, “here is what the numbers say,” the finance industry has been moving towards a more analytical and influential approach, “what do the numbers convey for the business and the future industry?” In fact, according to McKinsey research,  more than 34% of a financial manager’s time can be automated by adapting current technologies which will allow finance professionals to concentrate on more strategic activities . This change will mean leaders and teams will require a unique set of soft skills to be efficient and successful in the finance world. Below are the top four soft skills I believe every finance professional should possess.

Communication

“Who do you think is the person who gets the job promotion, the one who comes up with the financial strategy or the one who can explain it?” That was one of the questions my derivatives professor asked during class this semester and it made me think.

Today, communication plays a critical role in the finance industry. It is crucial to be able to communicate technical information in a way that engages, informs, and influences the audience. You could build accurate forecasts and projections, but it is necessary for you to be able to describe the outcome; in other words, be capable of telling the story of your reasoning in a way that influences your receptor.

Critical Thinking

Finance professionals must be able to develop meticulous critical thinking when they are evaluating different scenarios. For example, if you want to evaluate the performance of a stock, you need to know the implication of the economic factors, as well as the ratios utilization, etc. Financial decisions are crucial for any company since a poorly calculated decision could lead to potential losses. Critical thinking involves being able to use your analytical skills to dissect financial statistics, pull apart raw data, and convey meaningful information.

Presenting Your Findings

I previously mentioned the importance of communicating ideas to influence your audience. However, it is not only a matter of being able to “tell the story,” but also backing up your findings with clear data visualization tools. As a finance professional it is important to know how to display information in a clear, sharable, straightforward manner that allows people at different levels within the company to make informed decisions. At UB, I had the chance to enhance my data skills by taking courses such as Data Visualization and Predictive Analytics which helped me present my data in an easy-to-understand manner.

Leadership

In almost every type of job, from finance or the health industry or manufacturing, working in teams is inevitable. Throughout my journey at UB, I have learned the value of leadership skills, but more importantly getting to know my leadership style. As a servant leader, I like to get to know the abilities of my teammates and encourage them to use their strengths while achieving a common goal. My leadership style not only allows me to build trust and an overall good relationship with my teammates but also gain the respect of my peers, traits that are essential for any finance job position.

Source: https://oliverdeaconcoaching.com/the-top-5-finance-soft-skills-of-the-future-and-how-to-build-them/ .

Bio: Claudia Cabrera is originally from Arequipa, Peru. While she spent most of her childhood in her hometown, Claudia also had eye-opening experiences through exchange programs in Germany. She majored in economics and business administration, with a focus on data analytics and finance during her undergraduate years. Currently, Claudia is pursuing her graduate studies in quantitative finance, working towards her master’s degree. Outside of academics, Claudia enjoys traveling to different countries, and immersing herself in new cultures and experiences. She also likes dancing and playing the piano.

The Value of Soft Skills in Finance

Two women having a conversation seated at desk in workplace.

Soft skills, commonly referred to as people skills or interpersonal skills, are traditionally seen as relevant to industries like hospitality, education and social work. But that isn’t the case anymore. Today, a growing body of research suggests that soft skills are more valuable than ever in the labor market—and the finance industry is no exception. 1

Skills like communication, leadership, cultural awareness and teamwork help to shape an efficient workplace. They also play a crucial role in building relationships with customers and stakeholders.

In this post, you’ll learn why employers in the finance industry are seeking applicants with fine-tuned soft skills and how an online Master’s in Finance can nurture your soft skills to help you get ahead.

Cognitive vs. Non-Cognitive Skills

Soft skills is an umbrella term used to describe any non-technical skills used in the workplace. These skills are often difficult to measure but nonetheless critical for a candidate’s long-term success. 2 To better understand soft skills, it may help to break down the difference between cognitive and non-cognitive skills.

Both cognitive and non-cognitive skills are used in every industry, can be sharpened through education and experience and will help you get ahead in your workplace. However, non-cognitive skills are seen as "softer" (less technical and more difficult to measure) and affect how you relate to people.

Cognitive Skills: Memory, Logic and Reason

Cognitive skills are used to accomplish tasks. Some common examples that employers look for include reasoning, memory, multi-tasking, complex problem-solving and pattern recognition. An enhanced set of cognitive skills can help you meet deadlines, tackle long-term projects and develop your job-specific skills over time.

These skills are often thought of as related to your IQ and can be measured through standardized testing. While cognitive skills are important for any industry, high test scores don’t necessarily mean high employability—you also need non-cognitive skills to succeed.

Non-Cognitive Skills: Empathy, Passion and Adaptability

Non-cognitive skills are used to relate to others and think on your feet. Communication, for example, is a non-cognitive skill that affects how you relate to your coworkers and customers. While multi-tasking and time management skills will help you get a task done on time, great communication ensures that the finished project will meet the needs and desires of everyone involved.

Grit is another example of a non-cognitive quality that employers look for. 3 People with this quality are passionate about their work and resilient in the face of challenges. When complications arise, grit can help you get creative and find a new solution.

People with strong non-cognitive skills often make good teammates and leaders. In a fast-paced work environment, skills like critical thinking and empathy can go a long way to ensure everyone works together smoothly.

The Growing Demand for Soft Skills in Finance

The financial sector, like most other industries, is facing changes in the digital age. In response to those changes, major financial companies are increasingly seeking job candidates with soft skills instead of just technical or cognitive skills. 4

One driving factor behind the importance of soft skills in finance is an increasing demand for great customer service. Thanks to new technology and disruptive business models, customers’ expectations have changed—fast, responsive and personalized customer service is now the norm. 5 Even if that service is automated, soft skills like emotional intelligence and cultural awareness are necessary to create programs that meet everyday customers’ needs.

Shifting demographics in the finance industry have also increased the demand for soft skills. Younger employees have different expectations for their learning and training experiences than their baby-boomer predecessors.

Some studies show that training models based on soft skills, instead of just technical training, help to improve employee performance and retention. 6 In other words, investing in soft skills can help companies create more dynamic, successful workplaces.

Which Skills are in Demand?

A 2022 study compared the difference between the financial sector and other industries in terms of high-demand soft skills. The results showed that these skills most increase a candidate’s employability in the finance sector: 7

Emotional intelligence
Coordinating with others
Judgment and decision making

Of those skills, emotional intelligence is most lacking among candidates in the finance industry. Decision-making and critical thinking are also lacking (and therefore in high demand)—mainly due to a lack of soft skills training. That means a candidate can give themselves a competitive edge by showing a high level of emotional intelligence in their application, along with other critical soft skills.

Critical Thinking: An Essential Skill in Finance

Critical thinking is a crucial soft skill in the financial services industry, allowing professionals to objectively analyze and evaluate information to reach sound decisions. 8 This skill is particularly vital for roles such as chief financial officers, who are often called upon to strategize and solve complex problems. A critical thinker objectively analyses data and patterns, enabling them to understand financial trends and forecasts more accurately.

Additionally, critical thinking enhances the ability of modern finance professionals to offer valuable financial advice. This capability is not just beneficial for their current or past colleagues, but for anyone who might seek financial advice. Such professionals are in high demand in the financial services sector, especially among finance sector employers who value the skill of critical analysis that drives informed, strategic decision-making.

Communication Skills: Bridging Gaps in the Financial Sector

Effective communication skills have become an integral part of the finance professionals' skill set in financial services firms. According to an Indeed article,“ as businesses become increasingly global, the need for professionals who can successfully communicate across diverse cultures and languages becomes more pressing.” 9

Communication skills are not merely about conveying ideas but understanding the nuances of human emotion, cultural subtleties and the ability to empathize with others. The growth of technology has also given rise to the need for professionals who can explain complex financial concepts in layman's terms. In the financial services industry, this is particularly crucial when dealing with clients who may not have an in-depth understanding of finance.

Moreover, great communication skills enhance cooperation among team members, improving efficiency and productivity. Modern workplace learning methods are incorporating these skills into their curriculums, recognizing their importance in the finance sector.

Modern Workplace Learning Methods: Nurturing a Flexible Finance Professional

The changing nature of work and the advancement of technology have resulted in the evolution of modern workplace learning methods. 10 These methods have a profound impact on finance professionals and how they continue to develop their soft skills. Many financial services firms now invest in leadership development programs, prioritizing the cultivation of soft skills to breed a more adaptive and flexible finance professional.

New-age learning methods include blended learning, e-learning and experiential learning, among others. These techniques are instrumental in teaching finance professionals how to adapt to fast-paced work environments, collaborate with diverse teams and think critically to solve complex problems.

In conclusion, the financial services industry is changing rapidly. To keep pace, finance professionals must embrace the value of soft skills. These skills not only make them more employable but also equip them with the tools they need to navigate the dynamic world of finance successfully.

The Balance of Hard Skills and Soft Skills in Finance Jobs

While soft skills are crucial, hard skills remain vital for finance jobs. Hard skills encompass specialist knowledge like financial modeling and economics, traditionally the focus of finance training. Today's financial institutions, however, demand more than a list of hard skills. They seek professionals like investment bankers who can unite hard and soft skills, such as problem-solving, communication and creative thinking, to navigate the finance world's complexities. 11

Embracing Digital Transformation in Finance

Digital transformation is revolutionizing the finance industry. 10 Finance professionals must keep pace, adopting new technologies and cultivating a flexible mindset. This adaptability isn't limited to proficiency in the latest finance software but extends to adjusting to new business methods, evolving regulations and fast-paced business environments. Flexible employees excel at managing expectations and handling uncertainties, making them a treasure in finance.

Creative Thinking and Relationship Development

Creative thinking is a valued soft skill in finance, entailing innovative problem-solving, unique investment strategies and unconventional approaches to group working scenarios. 12

Similarly, relationship development is key in finance jobs and often overlooked. It involves more than networking; it's about building and nurturing meaningful relationships with clients, peers and competitors, drawing on experiences from previous job roles.

This balance of skills distinguishes professionals who excel in the rapidly evolving finance industry.

Sharpen Your Soft Skills With a Master’s in Finance

So, how can you acquire these in-demand skills at the start of your career? An online Master’s in Finance will help you get ahead.

A specialized finance degree teaches more than just technical skills. It offers insights into the expertise of leaders in the finance industry. That includes current industry changes, challenges and demands of modern customers—all of which can help increase your emotional intelligence, cultural awareness and other soft skills.

An online education can also help to improve soft skills like adaptability. Pursuing an online degree shows grit—applicants who have completed an MS program have faced challenges like balancing their schedule, remote networking and juggling multiple tasks at once.

Help Secure Your Future in Finance with a William & Mary Master’s

In the William & Mary Online MS in Finance program , you’ll have the chance to gain specialized knowledge and stand out in the job market

Whether you’re interested in becoming a wealth manager or investment banking analyst or rising to the top of a major financial company, our unique credential program can get you on the right path. The program takes as little as 15 months and offers hands-on learning opportunities.

Contact an admissions outreach advisor today to learn more about the Online MS in Finance and how it can help you craft valuable soft skills.

Retrieved on July 17, 2023, from nber.org/reporter/2017number4/value-soft-skills-labor-market
Retrieved on July 17, 2023, from thebalancemoney.com/list-of-soft-skills-2063770
Retrieved on July 17, 2023, from indeed.com/career-advice/resumes-cover-letters/non-cognitive-skills
Retrieved on July 17, 2023, from financedigest.com/the-growing-importance-of-soft-skills-in-financial-services.html
Retrieved on July 17, 2023, from d2l.com/blog/importance-soft-skills-financial-services/
Retrieved on July 17, 2023, from linkedin.com/pulse/importance-soft-skills-banking-sector-daksha-skilling-academy/
Retrieved on July 17, 2023, from researchgate.net/publication/359973817_The_Role_of_Soft_Skills_in_Employability_in_the_Financial_Industry
Retrieved on July 17, 2023, from linkedin.com/pulse/how-critical-thinking-skills-workplace-financial-services-bhayare/
Retrieved on July 17, 2023, from linkedin.com/pulse/3-multicultural-communication-strategies-enhance-tatyana-fittipaldi/
Retrieved on July 17, 2023, from mckinsey.com/featured-insights/employment-and-growth/technology-jobs-and-the-future-of-work
Retrieved on July 17, 2023, from indeed.com/career-advice/resumes-cover-letters/finance-resume-skills
Retrieved on July 17, 2023, from afponline.org/ideas-inspiration/topics/articles/Details/finance-leaders-need-to-embrace-creativity.-and-fast!

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Critical Thinking through Financial Literacy

Apply critical thinking to make sound financial decisions.

Financial literacy is about more than just setting a budget – it’s about deploying critical-thinking skills to make the financial decisions that are best for you. Learn from FoolProof Foundation how to approach these decisions with a healthy skepticism that will protect you from manipulative marketers and scam artists.

In this self-paced class, students will get an introduction to financial literacy. They will learn to recognize the tactics that advertisers and marketers use to try to manipulate consumers. Students will learn how to avoid impulse buying and how to form their own opinions about products and services through independent research. As they explore financial decision-making, students will sharpen their critical-thinking skills and discover how to deploy these skills in day-to-day life.

What You Will Learn

Sharpen your critical-thinking skills and learn how to use these skills to make sensible financial decisions.

Develop a basic understanding of financial literacy.
Learn tips for avoiding impulse buying.
Find out how to recognize and evaluate marketing and media spin tactics.
Understand how to form your own opinion through independent research.
Be prepared to deploy critical thinking in everyday life.

Note: This course is not for credit. Upon successful enrollment of a section, students will receive a confirmation email from our Student Services team. This email will include a link to an authorization form that is required to be completed within 72-hours of enrollment. In response to COVID-19 health guidelines, we have restructured our in-person Junior Academy workshops as online courses. Contact us at [email protected] if you have questions.

Course Number: EDUC-80037 Credit: 0.00 unit(s)

There are no sections of this course currently scheduled. Please contact the Pre-College Programs department at 858-534-0804 or [email protected] for information about when this course will be offered again.

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Top 10 soft skills you need to work in finance

10 soft skills to help you prove your value in the workplace

When searching for a role in finance, it's often not what you know, but what you can offer. Job hunters have long been told to list, and give prominence to, technical skills on their CVs, but finance sector employers are increasingly looking for candidates with interpersonal abilities known as ‘soft skills'. Demonstrating these 10 characteristics will help candidates with finance skills prove their value in the workplace.

1. Communication skills needed in finance

Earlier this year, analysis by LinkedIn showed that 57.9% of new hires who changed jobs in 2014-15 listed communication as one of their strong suits. Good communicators are in demand across a range of industries, and they're vital in fields that require employees to explain their specialist knowledge to others. Whatever your finance skills, an aptitude for number crunching won't get you far in finance if you can't justify and explain your calculations.

2. Negotiation skills needed in finance

Whether you're closing a deal or managing expectations, it's important to know how to fight your corner without ruffling any feathers. An aptitude for negotiation will allow finance professionals to reach an agreement that benefits all parties. Failure to compromise effectively can create frustration and damage interpersonal relationships or, at worst, result in loss of revenue for a business. Having a demonstrable knack for negotiation will put you ahead in any financial enterprise.

3. Influencing skills for finance jobs

Finance professionals must be prepared to explain how their objectives are mutually beneficial and anticipate objections. If, as a financial skills example, an investment banker wants to sell off a stake in a joint venture, he or she must be able to show how this will benefit the bank – even if some colleagues disagree.

4. Critical thinking

A critical thinker objectively analyses or conceptualises a situation from a balanced perspective. Often, customers and clients will look to financial professionals to rationally evaluate a scenario – be it a ledger or the performance of a stock. In fast-paced business environments, a poorly thought-out decision can cost a company time and money. So the ability to make critically-informed choices is crucial for modern finance professionals.

5. Flexibility

Flexible employees are capable of weathering change and staying productive in high-pressure situations. Good stockbrokers provide the most dramatic example of this: their day-to-day work revolves around coping with constant fluctuation and determining the best course of action. However, cultivating a flexible mindset also means being able to see through the eyes of others and understand their motivations. A flexible finance professional will always ask: "Why might someone think this way?"

6. Resilience

Resilience refers to one's ability to bounce back after facing adversity. While this is an important skill in any workplace, it's especially important in high-pressure situations. Being able to cope with changing circumstances, having confidence in your ability to deliver and thinking carefully about what you're trying to achieve can prove valuable – particularly in financial roles.

7. Collaboration

It's no secret that top-level financiers are on the lookout for team players. A recent survey by Adaptive Insights showed that 70% of chief financial officers considered collaboration to be their top priority for 2016. In the financial sector, it has become increasingly common to work across multiple teams and geographies to achieve a shared goal. Someone who approaches group-working scenarios with an open mind and a willingness to listen will benefit any team.

8. Problem solving skills for finance jobs

Effective problem solvers identify the issue at hand, weigh up their options quickly and make a firm decision about the best course of action. Those who excel at problem solving can really drive an organisation forward and will earn the respect of their colleagues by offering meaningful input in even the toughest situations.

It's a common misconception that roles focused on data and numbers require a detached approach – empathy should never be undervalued in finance. Clients often seek financial advice during stressful life events, and dealing with someone who has suffered a loss requires a different approach from a couple seeking their first mortgage.

An empathetic person shows that he or she cares. In displaying understanding, finance professionals will also build trust in their relationships with co-workers and clients.

It's not enough to simply tell an employer you have the soft skills they're looking for. Instead, strive to demonstrate your skillset by offering up examples from previous job roles and highlighting talents you've developed outside of the workplace. Remember, employers are always seeking the right personality for the job – not just a list of positions and qualifications.

10. Interpersonal skills

Interpersonal skills are vital in this sector, in order to communicate effectively with colleagues, clients and stakeholders on a regular basis. It may be necessary to speak to people overseas and understand how different cultures prefer to interact too. Some people are naturally good at this, while others may find it takes practice, perhaps through a training course or taking the initiative to steadily improve their communication skills and confidence, until it becomes second nature.

How to identify your own soft skills for finance:

Reflect on your reactions to tense situations at work and compare them to those of managers and co-workers you admire.

Prepare answers to interview questions that screen for soft skills, such as those about workplace experience in problem solving and collaboration.

Ask current or past colleagues to evaluate your strengths and weaknesses. They may be able to offer insights you hadn't previously considered.

Consider your strengths in relation to the job you want to apply for so you can be confident about the criteria you already fulfil and areas that you can develop on the job.

How to acquire new soft skills for finance jobs:

Make a conscious effort to improve your soft skills every day – remember, they're attributes to develop, not innate qualities.

Take up skill-building hobbies in your leisure time. Something as simple as a cooking class might prepare you to prioritise tasks and work under pressure.

Ask for help and feedback from colleagues and senior staff in your workplace.

Enrol in a course designed to build soft skills, such as those offered by Reed.

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Starting a career in finance FAQs

Soft skills are non-technical skills that are an asset in a workplace. They include how you communicate, how you solve problems, and how you manage your workload.

Soft skills are often taken for granted, but it is more than having general ‘people skills’. Listening skills, time management, and empathy are essential to the overall smooth day-to-day operation at work. As such, they are a key element in the recruiter’s search for talent.

An awareness of market forces and desire to keep abreast of the latest market movements. Having a genuine interest in your subject and learning all you can about the business and sector can reap rewards.

It’s helpful to have an analytical mind that enjoys pulling apart the stats to see the raw data – and having the courage of your convictions to draw conclusions from your analysis. See our financial blogs for related information and insight:

Finance CV Template | Reed

Accountant CV template | Example Accountancy CV | Reed

Artificial intelligence is revolutionising accountancy | Reed

An aptitude for numbers certainly helps! Some employers may ask for a relevant degree in a subject like finance, accounting or business studies. You might also work your way into the sector with a college course, an apprenticeship, or having steered a course through other work experience into finance.

To start out on the career ladder, you may need:

2 or more GCSEs at grades 9 to 3 (A* to D), or equivalent, for a level 2 course

4 or 5 GCSEs at grades 9 to 4 (A* to C), or equivalent, for a level 3 course

4 or 5 GCSEs at grades 9 to 4 (A* to C), or equivalent, including English and maths for a T level.

See our financial blogs for related information and insight:

Seven in-demand accountancy and finance roles | Reed

An internship or work experience can teach you a lot about the sector – and crucially will allow you to network, increasing your chances of finding a salaried role in the company or elsewhere. Be prepared to learn as much as you can, be enthusiastic, and if possible, familiarise yourself with the tools and technology that is increasingly changing the face of the sector.

New digital skill sets will help maximise the potential business benefits of tech innovation in automation, risk assessment, and problem solving. Knowledge of coding and programming development will become increasingly important for finance professionals as technology expedites the process away from outdated manual techniques.

Financial reporting refers to an organisation’s financial results that are released to stakeholders and the public for a specific period. It typically comprises balance sheets, income, cash flow and shareholders’ equity statements to show the entry and exit of monies through a company. These crucial documents are essential tools for potential investors in a business.

Financial reporting involves sale forecasting, creating a budget for expenses, creating a cash flow statement, estimating net profit, and an estimate of assets and liabilities.

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Our national coverage allows us to offer a recruitment service taylored to your needs, with accurate local market intelligence on salaries, competitors and the best professionals who can help your business thrive.

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Course ID: CTFAF

Critical thinking for accounting and finance.

No skill is more important in business today than the ability to understand, analyze, and act on information effectively and responsibly. Finance and Accounting professionals who are also savvy, sharp critical thinkers can cut through ambiguity and information overload to quickly zero in on what is really important. This session shares cognitive techniques and critical thinking tools to enhance decision-making under pressure and strengthen your impact.

Learning Objectives

Examine cognitive techniques and critical thinking tools to enhance decision-making under pressure and strengthen your impact

Major Topics

Cognitive techniques
Critical thinking tools
Decision making under pressure

Who Should Attend

Leaders in an organization who want to improve their communication and critical thinking skills

Fields of Study

Prerequisites, cpe credits, this course is available for your group as:, let's roll.

To learn more or customize this course for your group, complete this form and a BLI team member will get back with you shortly.

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Youth Program
Wharton Online

10 Truths about Smart Financial Decision Making

Google Classroom:

High school students are passionate about financial education. The demand for our Wharton Global Youth on-campus Essentials of Finance program prompted us to create a new online program for high school students this summer that we are calling Financial Decision Making

Students’ passion extends to spreading that financial knowledge. Our team often receives pitches from potential Future of the Business World podcast guests about teens’ efforts to improve youth financial skills and fight economic inequality across the globe.

Take, for instance, Isaac H., a high school student from rural Indiana in the U.S. Isaac founded Students Teaching Finance , a student-led nonprofit that teaches personal finance to K-8 kids. We’ve also met Amanda L. B., founder of The Financial Girl , which specializes in teaching teens about personal finance in public schools across Puerto Rico. And we featured Sam P. on our podcast, a high school student from Vancouver, Ontario, Canada who founded MyFLY to build and implement a financial-education curriculum in schools worldwide.

Making Smart Financial Decisions

We could add more names to our podcast pitch list! But instead, let’s pivot to meet a decades-long expert in the financial-education field. Olivia S. Mitchell , a professor of business economics and public policy at the Wharton School of the University of Pennsylvania for the past 30 years, is a leader in financial literacy, which she defines as “the knowledge and the capability to act on financial, economic principles.”

Dr. Mitchell joined Wharton Global Youth’s summer cross-program speaker series to talk about financial literacy to several hundred high school students participating in our on-campus summer programs. “I have been passionate about financial literacy for a long time,” she told them. “I believe it’s critical as members of an educated society to have the tools and the understanding of financial risk management .”

Here are 10 truths about financial decision making that Professor Mitchell shared with Wharton Global Youth students:

1️⃣ Risk management of any kind involves three steps: Identify the risk so you know what you’re facing; mitigate or reduce the risk; and finance or insure the risk. “You’ve got to make sure you are protected by amassing enough money,” noted Dr. Mitchell. “If you become unemployed, you should have six months of savings to draw on. And with insuring, you put some money into a risk pool. Buy insurance against poor health and disability. For example, if you own a home, you [buy insurance] because you want to make sure that if it burns down, you have some compensation.”

2️⃣ People get into financial trouble for many reasons, deepened by the fact that they undersave and/or overspend. They face health shocks like a disability that might leave them without income for many years, or they become unexpectedly unemployed. And more people are living much later in life. All these factors can throw people into financial crisis.

3️⃣ Financial literacy is an important part of risk mitigation. Said Professor Mitchell: “If you are financially literate, you’re going to plan better, budget better, save more, and when the time comes to retire, you’re going to pull out the right amount of money — and not too much” that you then have a shortfall when you get older.

4️⃣ More than 15 years ago, Professor Mitchell and a colleague devised three key questions to determine financial literacy ( see box ). “There are a lot more [financial] concepts, but if you can’t answer these three questions, you’re in big trouble,” said Dr. Mitchell. (Find the answers in the comment section of this article).

5️⃣ Financial illiteracy is a global challenge – with opportunity for growth in financial education. ( see graph ). Why is China less financially literate? “There’s a huge rural population in China,” observed Dr. Mitchell. “And even in the urban areas, they still only have nine years of mandatory education and kids just don’t get exposed to financial decision making.”

6️⃣ How long do you need to think about managing your money? Average life expectancy is 77 or 78 years in the U.S. and longer in other countries, like Japan. “There’s been an enormous expansion of our lifetime, which means there’s a lot more years for you to make financial mistakes or to apply your financial literacy,” noted Dr. Mitchell. Babies born today will live to 100 or beyond. And demographers say that a baby has already been born who will live to 200. “You should plan for it because if you don’t, what will happen? You’ll run out of money,” cautioned Mitchell.

7️⃣ Understand retirement investment allocations. Whatever you put into the plan and decide to save; what you earn on that money while it’s invested; and what you might earn from an employer matching plan is what you will have for retirement later in life. “This is where financial literacy becomes critical,” urged Professor Mitchell. “If you don’t understand the lifespan that you’re going to be saving and investing for, if you don’t understand risk and risk mitigation, and if you don’t understand the danger of outliving your money, you’re going to make all those decisions wrong.”

8️⃣ When it comes to retirement savings, the earlier, the better. When your financial advisor gives you a rule of thumb or your employer says that people on average should save 3% of your income for retirement, don’t believe them, suggested Dr. Mitchell. You should be saving 20% to 25% of your income. “If you assume Social Security will pay you a 50% replacement rate – replace about half of your pre-retirement income – then you will have to come up with the rest of the income stream by saving on your own,” she said. “If you start at 25 for retirement at 65, with an expected rate of return [on your money] of 3%, you will need to save 11.11% of your income. If you waited until you were 20 years from retirement because you had to pay back your student loans…and didn’t have a lot of available income to save, you would have to save more than a quarter of your income.”

9️⃣ An expected long-term rate of return of 3% is a good scenario. Economists predict that the rate may fall in the future. “Population aging and the decline in fertility means that worker productivity will not increase enough to keep rates of return high, then maybe what you’re going to get is a 1% long-term rate of return.” That will require you to save even more for retirement.

🔟 Dr. Mitchell predicts that our financial health depends on bolstering family and individual financial literacy; saving more money, working longer and insuring better; reforming banks, pensions and Social Security; and developing new risk-financing tools.

Conversation Starters

Are you passionate about financial education? Share your story in the comment section of this article.

What are your biggest takeaways from Professor Mitchell’s lecture? Has this inspired you to better manage your financial risk?

Why is financial literacy an important part of risk mitigation?

One comment on “ 10 Truths about Smart Financial Decision Making ”

Here are the answers to Dr. Mitchell’s financial literacy questions: Question 1: Of three choices: less than $102, equal to $102 and greater than $102, the answer is greater than $102.

Question 2: Less than today. “If the inflation rate exceeds the interest rate on your account, you have less purchasing power after a year and much less after two or three years.”

Question 3: False.

Critical Thinking and Problem-Solving in Finance

$ 100.00 $ 49.00

🌟🌟🌟🌟🌟 “This course has fundamentally changed how I approach financial challenges. The structured problem-solving techniques and critical thinking frameworks have made me a more confident and effective finance professional.” – Sophia K., Financial Strategist

Description

Course Description: Critical Thinking and Problem-Solving in Finance

“Critical Thinking and Problem-Solving in Finance” is an intensive course designed to empower finance professionals with the analytical skills and critical thinking capabilities needed to tackle complex financial challenges effectively. In the volatile world of finance, the ability to analyze situations, think critically, and devise innovative solutions is paramount. This course combines theory with real-world applications, ensuring participants can approach financial problems systematically and make decisions that align with their organization’s strategic goals.

Learning Objectives

By the end of this course, participants will be able to:

Enhance Critical Thinking Skills:

Understand and apply critical thinking frameworks in financial contexts.

Identify biases and assumptions that can impact decision-making.

Develop Analytical Abilities:

Analyze financial situations using a structured, methodical approach.

Employ quantitative and qualitative analysis to evaluate financial scenarios.

Foster Innovative Problem-Solving:

Cultivate creative thinking to approach financial challenges from new angles.

Develop the ability to devise and assess innovative financial solutions.

Improve Decision-Making:

Make informed, data-driven decisions in complex financial environments.

Understand the implications of financial decisions on overall business strategy.

Navigate Uncertainty and Risk:

Develop strategies for managing and mitigating financial risks.

Build resilience and adaptability to thrive in uncertain financial landscapes.

Informed Decision-Making: Make smarter, data-driven decisions by analyzing financial information critically.
Enhanced Problem-Solving: Tackle complex financial issues with innovative and effective solutions.
Strategic Thinking: Align your problem-solving approach with your organization’s strategic objectives.
Risk Management: Enhance your ability to assess and mitigate risks in a volatile financial environment.
Professional Advancement: Sharpening critical thinking and problem-solving skills can open doors to leadership roles and strategic positions within your organization.

Testimonials

🌟🌟🌟🌟🌟 “Transformative and Insightful”

“This course has fundamentally changed how I approach financial challenges. The structured problem-solving techniques and critical thinking frameworks have made me a more confident and effective finance professional.” – Sophia K., Financial Strategist

🌟🌟🌟🌟🌟 “A New Dimension in Financial Decision-Making”

“Understanding how to critically analyze information and think outside the box has added a new dimension to my financial decision-making. The skills I’ve acquired are invaluable in navigating today’s complex financial landscape.” – Miguel A., Risk Analyst

Module 1: Foundations of Critical Thinking in Finance

Introduction to critical thinking and its significance in finance.
Recognizing and overcoming cognitive biases and fallacies.

Module 2: Analytical Techniques in Finance

Tools and techniques for quantitative and qualitative financial analysis.
Case studies illustrating analytical problem-solving in action.

Module 3: Creative Thinking and Innovation in Problem-Solving

Techniques for fostering creativity in financial problem-solving.
Approaches to brainstorming and assessing innovative solutions.

Module 4: Strategic Decision-Making

Frameworks for making informed, strategic financial decisions.
Aligning financial decision-making with broader business objectives.

Module 5: Risk Assessment and Management

Identifying, analyzing, and mitigating financial risks.
Building strategies for resilient and adaptable financial planning.

Module 6: Navigating Uncertainty in Finance

Tools and techniques for thriving in uncertain financial environments.
Building flexibility and adaptability into financial problem-solving.

Module 7: Capstone Project

Applying critical thinking and problem-solving skills to a real-world financial challenge.
Peer and instructor feedback to refine and enhance analytical capabilities.

Elevate your financial acumen and strategic influence! Join “Critical Thinking and Problem-Solving in Finance” and become a pivotal asset in navigating your organization through complex financial landscapes. Enroll now and redefine your approach to financial challenges!

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CBSE shifts focus to competency-based assessment, changes Class 11, 12 question paper format

Revised evaluation methods prioritise critical thinking and creativity in class 11 and 12 board exams..

In an official statement, CBSE expressed its primary objective to foster an educational environment that emphasises critical thinking.

CBSE has revised its assessment and evaluation methods to implement the principles outlined in the National Education Policy (NEP) of 2020. Notably, the board exams for Classes 11 and 12 will now feature a greater proportion of competency-based questions and fewer constructed response items.

Under the updated guidelines from CBSE , the weightage of competency-focused questions, including MCQs, case-based queries and integrated source-based questions, in Class 11 and 12 exams has been raised from 40% to 50%. Conversely, the portion of constructed response questions (both short and long answer types) has been decreased from 40% to 30% for the academic session of 2024-25. The proportion of select response questions (MCQs) remains unchanged at 20%.

However, there have been no alterations in the composition of question papers for year-end or board examinations (theory) for Classes 9 and 10 for the upcoming academic session (2024-25), in accordance with CBSE directives.

In an official statement, CBSE expressed its primary objective to foster an educational environment that emphasises critical thinking, creativity and systems-based learning, departing from traditional rote memorization methods, to better equip students for the challenges of the 21st century.

Meanwhile, the National Council of Educational Research and Training (NCERT) has announced the release schedule for new textbooks aligned with NCF-SE 2023. Textbooks for Class 3 will be available by April 2024, followed by those for Class 6 in mid-May 2024. NCERT also disclosed that 1.21 crore copies of the 2023-2024 editions for various classes have already been distributed, with ongoing production to meet demand. Additionally, buffer stock for Classes 4, 5, 9, and 11 is prepared. Digital versions of all NCERT textbooks are freely accessible on the NCERT portal, DIKSHA, and the ePathshala portal and app, as stated in an official communication posted on X (formerly Twitter) by NCERT.

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18 Most Common Things Americans Keep in Their Basement

Posted: February 22, 2024 | Last updated: February 22, 2024

<p>While basements are depicted in movies as scary, in reality, they are actually our favorite spots to store a lot of household items. Are you thinking of what to keep in yours? Here are 18 things you’ll find in most basements across the U.S.</p>

While basements are depicted in movies as scary, in reality, they are actually our favorite spots to store a lot of household items. Are you thinking of what to keep in yours? Here are 18 things you’ll find in most basements across the U.S.

Storage Boxes

With the amount of empty space it has, the basement has been the perfect place for many to keep storage boxes. This is especially true when the boxes are empty or when they contain items that are seldom used. By doing this, you avoid cluttering living areas and get a specialized space to organize small items.

<p>“While the things around your home may grow in sentiment over the years, they probably aren’t growing in value. Unless you collect fine art or antiques, most of your stuff is, well, just stuff.</p><p>Your millennial kids may hesitate to take it in because they can see that a bit more clearly. Without any sentimental value or monetary value, it may not be a very appealing idea,” writes <a href="https://www.thesimplicityhabit.com/millennials-dont-want-your-stuff/">The Simplicity Habit</a>. We are living in smaller homes closer to urban areas and opting for experiences over stuff.</p>

Old Furniture

Instead of throwing out that chair or dining table that doesn’t fit the aesthetic anymore, people have found the basement as their safe haven. The basement allows you to keep furniture for future use or preserve it to be sold in the future for more value, like Grandma’s rare antique piece.

<p>After buying all those Thanksgiving gourds or that amazing Christmas tree, we don’t just throw them away. With the basement, many get to keep their fragile, expensive decorative pieces intact for the next holiday season without having to clutter up livable rooms in the home. “Basements are usually a great place to store any sort of extra boxes or plastic totes since the temperature in basements is usually cooler than in the main level of your home or in closets,” Senior Helpers <a href="https://www.seniorhelpers.com/ca/san-rafael-marin/resources/blogs/where-to-put-holiday-decorations-away-besides-the-attic/#:~:text=Basements%20are%20usually%20a%20great,care%20while%20traversing%20the%20stairs.">says</a>.</p>

Holiday Decorations

After buying all those Thanksgiving gourds or that amazing Christmas tree, we don’t just throw them away. With the basement, many get to keep their fragile, expensive decorative pieces intact for the next holiday season without having to clutter up livable rooms in the home. “Basements are usually a great place to store any sort of extra boxes or plastic totes since the temperature in basements is usually cooler than in the main level of your home or in closets,” Senior Helpers says .

Seasonal Clothing

Just like with holiday decorations, a lot of people use the basement to store special clothes they probably wear once a year. This can be that Dracula costume worn for Halloween or special adornment pieces worn during New Year celebrations. When properly stored, the basement keeps these unused clothes safe from pests and dust.

Sports Equipment

Whether it’s to store a skateboard, a baseball stick, or a small goalpost, the basement is perfect. Sports equipment has no use in the house, and the basement serves as a good location to rid living spaces of them, allow quick retrieval, and even protect these pieces against theft. CNN advises storing them in duffel bags for better organization.

<p>In order to survive as long as possible in a zombie apocalypse, you should regularly check and maintain your survival gear. Also, remember to store your equipment properly to prevent damage. <a href="https://www.forrent.com/blog/apt_life/zombie-proof-apartment/">ForRent.com</a> recommends looking around your home for gear that you can use to defend yourself.</p>

Camping Gear

Going on hikes and adventures into the wild are recreational activities people have come to love. However, these aren’t everyday events, and you can’t just keep those hiking poles or tents in your bedroom. Instead, the basement has become the preferred location, helping to also protect equipment from weather damage and safeguard against pests.

<p><span>He’s convinced that clothes magically clean themselves. Laundry day is a foreign concept, and he’ll happily live out of his “floordrobe” before considering doing a load.</span></p>

Laundry Appliances

That large, 24-pound washing machine may take up too much space in your kitchen or bathroom, making the basement perfect for it. But this isn’t the only reason laundry appliances are stored there. Per Moose Basements , “There will be a lot less damage if your washing machine leaks in the basement rather than the kitchen or elsewhere. If your washing machine leaks from the upper floor down, then the damage can be extensive and cost a lot in repairs.”

<p>Yes, we cook throughout the week, but it’s not every day you use the BBQ grill or drink coolers. Many use the basement to store unused kitchen equipment for the next time it’s needed. Even certain appliances, like deep freezers used for long-term food storage, find themselves in the basement, so the kitchen isn’t jam-packed.</p>

Unused Kitchen Equipment

Yes, we cook throughout the week, but it’s not every day you use the BBQ grill or drink coolers. Many use the basement to store unused kitchen equipment for the next time it’s needed. Even certain appliances, like deep freezers used for long-term food storage, find themselves in the basement, so the kitchen isn’t jam-packed.

<p>Why buy new when slightly used will do? Tools are built to be tough, so even if they’ve hammered out a few projects before, they’re likely ready for many more. You can often find them for a steal at yard sales, online classifieds, or estate sales. It’s about making smart choices for your toolbox and your bank account.</p>

Home Improvement Supplies

People don’t just keep unfinished supplies in basements to save them for future use or stack new supplies there for future projects. Basements are also great locations to keep hazardous items like paint, nails, nail guns, and ladders far from the reach of children and pets.

<p>An emergency multi-tool in the car is a symbol of being prepared for the worst. It’s about having the means to take action during critical moments, whether it’s cutting a seatbelt or breaking a window in an emergency. Keeping such a tool shows foresight and a commitment to safety, not just for oneself but potentially for others in need as well.</p>

Tools and Toolboxes

Not only do Americans store tools and toolboxes in the basement, but some have turned it into a full-blown workshop. The basement is a perfect place to store dangerous tools (for security reasons) and also a secluded, private, and quiet place to work on DIY projects, as Popular Mechanics explains .

<p>Lawnmowers and trimmers are also commonly seen in many basements across the U.S. Rather than being kept outside, storage in basements saves these tools from harsh weather conditions, vandalism, or theft—all achieved while maintaining convenient access to them.</p>

Lawn Care Equipment

Lawnmowers and trimmers are also commonly seen in many basements across the U.S. Rather than being kept outside, storage in basements saves these tools from harsh weather conditions, vandalism, or theft—all achieved while maintaining convenient access to them.

<p>Washing plates is an everyday chore, and some of us may not like how often we have to buy new soap. Going for a cheaper option solves this costly problem, right? Well, it only means you get soap with a lower concentration, which forces you to use more to get that nice lather. You’ll only be going through your dish soap even faster.</p>

Spare Household Supplies

Everyone buys those extra packs of tissues, dishwashers, or garbage bags so we don’t have to run to the store every time we need them. Living areas easily get cluttered up by these, so the basement is a lot of people’s preferred location for storage. This way, emergencies are easily taken care of with a quick run downstairs.

<p>Children will inherit the Earth from us, and that means it’s them who will have to deal with the environmental damage we leave behind. The production and disposal of electronic devices contribute to environmental issues like resource depletion and plastic pollution, so it’s essential to teach them to reduce their consumption and recycle when possible.</p>

Broken Electronics

Many people use the basement to store appliances that have gone bad pending disposal or repairs. Instead of placing them outside (defacing your curb) or keeping them in a room (cluttering the living area), basements are great for saving damaged appliances for proper recycling.

<p>Shelves filled with books painted many boomers’ walls, each title marking a phase, a memory. Gen Z, while housing vast digital libraries, continues to value the aesthetics, nostalgia, and tactile pleasure of physical books.</p>

Books and Magazines

Unless you have a fancy bookshelf to keep books on, their storage can be a headache. This is especially true considering that disposing of a book is probably the last thing on an avid reader’s mind. Basements are saviors in this aspect. However, avoid placing books close to walls or in hot areas to avoid fast degradation, as Real Simple shares .

<p>From sporting medals to academic awards and childhood photos holding dear memories, the basement has also been used by many to store important keepsakes. Considering these pieces are usually held throughout one’s lifetime, the basement saves them from light, dust, and moisture. Some people even use it as a showroom to display them like art.</p>

Memorabilia

From sporting medals to academic awards and childhood photos holding dear memories, the basement has also been used by many to store important keepsakes. Considering these pieces are usually held throughout one’s lifetime, the basement saves them from light, dust, and moisture. Some people even use it as a showroom to display them like art.

<p>If you’re a gym rat, like many other people, the basement is a perfect space to store your large and heavy equipment. People also convert it into their complete in-house gym. Basements as workout spaces are great because the temperature here can be cooler and there are no noise distractions that stop you from getting your workout in.</p>

Exercise Equipment

If you’re a gym rat, like many other people, the basement is a perfect space to store your large and heavy equipment. People also convert it into their complete in-house gym. Basements as workout spaces are great because the temperature here can be cooler and there are no noise distractions that stop you from getting your workout in.

<p>Small plastic toys, like Lego bricks and bath toys, can be unhygienic breeding grounds for bacteria and mold, especially when left damp. <a href="https://www.nytimes.com/wirecutter/guides/how-to-clean-lego/">The New York Times</a> says you won’t harm the plastic so long as you use a cool wash and won’t damage your dishwasher so long as you use a net bag to keep small pieces from being washed into the machine’s mechanism.</p>

Toys and Games

Not only do basements come in handy for storing bulky outdoor toys, but they also help people save play items for future children. You get to keep toys as long as you want without unnecessarily filling up your living area. Some even use basements as entertainment rooms for video games and other leisure getaways.

$<p>Many people buy instruments and then never use them. These unused instruments often end up in yard sales. You can get really good deals on musical instruments such as guitars and keyboards at yard sales and pay just a fraction of what you would for something new.</p>$

Musical Equipment

A lot of the popular musical instruments used in homes are large—and we’re talking about the pianos, keyboards, and guitars. They unnecessarily take up a lot of space when they aren’t in use, so a lot of people also store them in basements. Some even use basements as practice areas, so they don’t have to move heavy instruments around.

<p><span>It’s easy to say hindsight is 20/20, but what advice would you </span><i><span>really</span></i><span> give your younger self? Here are 20 things that most people did when they were young that they regret today. </span></p>

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How to develop critical thinking skills in finance & accounting

Stephen Moir

When it comes to finance and accounting roles, employers are increasingly looking for problem solvers, not a number-crunchers. Over recent years, we have seen an increasing demand for people who can analyse and interpret data and think critically.

Why are critical thinking skills important?

How to develop critical thinking skills

How to apply critical thinking skills in your current role

Changing roles to develop critical thinking skills

How to demonstrate critical thinking skills at an interview

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Financial knowledge and decision-making skills

Building financial knowledge and decision-making skills

Importance of financial knowledge and decision-making skills

Development of this building block

Early childhood (ages 3–5)

Instructional strategies

Learning activities

Resources for teaching financial knowledge and decision-making skills

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WHAT IS CRITICAL THINKING?

ANALYZING DATA HELPS CRITICAL THINKING

THE DATA ANALYSIS PROCESS

Identify Data Analysis Opportunities

Specify the Objectives of the Analysis

Analyze the Data and Investigate Anomalies

Evaluate the Results

Formulate a Remedial Action Plan

WHAT ARE YOUR NEXT STEPS?

CASE STUDY: FRAUDULENT FINANCIAL REPORTING

Financial Statement Analysis

Analysis Of Sales Transactions

The Remedial Action Plan

About the Authors

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KEY SKILL SETS FOR MANAGEMENT ACCOUNTING

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My Top Four Finance Soft Skills

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The Value of Soft Skills in Finance

Cognitive vs. Non-Cognitive Skills

Cognitive Skills: Memory, Logic and Reason

Non-Cognitive Skills: Empathy, Passion and Adaptability

The Growing Demand for Soft Skills in Finance

Which Skills are in Demand?

Critical Thinking: An Essential Skill in Finance

Communication Skills: Bridging Gaps in the Financial Sector

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Top 10 soft skills you need to work in finance

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1. Communication skills needed in finance

2. Negotiation skills needed in finance

3. Influencing skills for finance jobs

4. Critical thinking

5. Flexibility

6. Resilience

7. Collaboration

8. Problem solving skills for finance jobs

10. Interpersonal skills

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