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Accounting and Taxes: Real-Life Learning in Professor Michelle Hanlon's Classroom

Finance Forums 2013Michelle Hanlon

When Michelle Hanlon, Howard W. Johnson Professor and Professor of Accounting, joined the faculty of MIT Sloan in 2009, she wasn’t sure what to expect. But after spending time on campus, she had a revelation: “I thought the mission of improving the world was just a slogan. But MIT and MIT Sloan live this every day—it’s true, we are trying to improve the world and make a difference.”

Hanlon currently teaches two courses at MIT Sloan, 15.518 Taxes and Business Strategy and 15.516 Financial Accounting. Students enter the courses with mixed expectations—however, they inevitably leave with a deep understanding of both the importance of these fields and what makes them so fascinating to study.

In 15.518 Taxes and Business Strategy, taken by students from nearly all of MIT Sloan’s master-degree programs as well as the undergraduate program, students often report back to Hanlon that her class has been incredibly valuable for them, both professionally and personally. Students can better understand tax issues and policy debates, and they have a solid base of knowledge to work with when they start their own companies. As she acknowledges, “We all pay taxes... . How tax policy is set by governments touches almost every aspect of business and, indeed, everyday life.”

In 15.516 Financial Accounting, a course that is part of the Master of Finance curriculum, students often don’t fully realize the importance of accounting when they start the class. “At some point during the term, it sinks in that the accounting reports are a primary method of communicating the performance of a business to its stakeholders and that those reports really matter. The performance conveyed in the reports alters investors’ and creditors’ views of the firm. Often more shocking to students, though, is just how far-reaching the effects can be if a company does the accounting incorrectly and thus how important it is to get the accounting right.”

Listening to Hanlon talk about her students and her courses, it is immediately clear that she makes taxes and accounting interesting. Her work and what she teaches have deep implications on the lives of her students. Hanlon often shares her research and experiences testifying to congressional committees to give her students a broader view. Because students from across programs enroll in her Taxes and Business Strategy course, they are exposed to a wide range of perspectives that come from bringing undergraduates and senior management professionals together in one room.

Reflecting on MIT Sloan’s mission, Hanlon shared a perspective she has gained from her students: “When students come to me to talk about tax planning as they start new businesses, they genuinely believe that they can make a difference in the world—and make the world a better place with their companies and products.”