Swedish-born Jim Ohlson loves playing the numbers. No, he’s not a Lotto man. He’s someone who relishes teaching students how firms can best dig into the reams of financial figures their computers spit out yearly, monthly, daily, and make sense of it all.
“What’s rewarding to me about my field is coming up with sophisticated methods to help analysts sort out the very messy questions regarding accounting and equity evaluation that can seem impossible to solve,” says Ohlson, who has enjoyed the kind of smooth career progression from assistant professor to tenured chair that some people only dream about. He’s taught accounting at Stanford, the University of British Columbia, and Columbia Business School, has served as the L.H. Penny Professor of Accounting at Cal, and is now holds the Leonard N. Stern chair at NYU.
Ohlson became fascinated with the intricacies of accounting and econometrics as a student at Berkeley’s School of Business in the mid-1960s, and early in his studies decided to stay on to earn his Ph.D. “Financial accounting simply seemed to me to be critical to everything in an economy,” he explains. “I was also impressed with Berkeley’s distinguished faculty in this area, which included people such as Maurice Moonitz, John Wheeler, and Nils Hakansson. Given his strong bent for research, going on to pursue an academic career seemed natural. “I never thought about doing anything else,” he says.
Ohlson has risen to prominence in his field and has written a number of influential papers concerning accounting data as it relates to equity valuation. The recent Enron and WorldCom debacles have offered him an opportunity to think even more penetratingly about the role and responsibilities of the accounting field in the world economy. “In my opinion, these situations weren’t as much a question of corruption as they were a failure on the part of analysts to put enough effort into looking at their numbers carefully,” he says of the recent scandals. “The writing was clear that the companies were overvalued and that there had been financial problems for quite some time. No one should have been surprised.”
Ohlson keeps up with many of his Berkeley professors, including Hakansson and Mark Rubinstein, as well as his Swedish compatriot Johny Johansson, MBA 67, Ph.D. 72, a professor of international business and marketing at Georgetown. Having had his finger on the pulse of academe for the past three decades, Ohlson notes that business education has changed significantly over the years – and not always for the better. “Today’s curricula are of necessity more focused on direct practical utility than the kind of education I received, which was far more intellectually stimulating and challenging. We didn’t even have calculators way back then,” he notes nostalgically, “but we learned how to read, and that has stood me very well.”
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