Neuroaccounting: Consilience Between the Biologically Evolved Brain and Culturally Evolved Accounting Principles
John W. Dickhaut
Chapman University (Deceased)
Temple University - Fox School of Business and Management
Kevin A. McCabe
George Mason University - Department of Economics; George Mason University School of Law
Gregory B. Waymire
Emory University - Department of Accounting
June 1, 2010
Accounting Horizons, Vol. 24, No. 2, pp. 221-255, 2010
We develop the hypothesis that culturally evolved accounting principles will be ultimately explained by their consilience with how the human brain has evolved biologically to evaluate social and economic exchange. We provide background on the structure and evolution of the brain, the measurement of brain behavior during economic decision making, and the brain’s central role in building economic institutions. We describe the emergence of modern accounting principles and argue that the primary function of accounting in evaluating exchange is to provide quantified information on the net benefits of past exchanges. We review evidence documented by neuroscientists that is consistent with the hypothesis that longstanding accounting principles e.g., Revenue Realization and Conservatism have distinct parallels in brain behaviors. Our analysis of Neuroaccounting extends Basu and Waymire (2006) to provide a new way to scientifically view accounting, which has implications for how we think about the origins and persistence of longstanding accounting principles.
Keywords: Accounting principles, human brain, evolution
JEL Classification: B15, D80, M41Accepted Paper Series
Date posted: August 2, 2010
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