Neuroaccounting: Consilience Between the Biologically Evolved Brain and Culturally Evolved Accounting Principles

Accounting Horizons, Vol. 24, No. 2, pp. 221-255, 2010

Posted: 2 Aug 2010

See all articles by John W. Dickhaut

John W. Dickhaut

Chapman University (Deceased)

Sudipta Basu

Temple University - Department of Accounting

Kevin A. McCabe

George Mason University - Department of Economics

Gregory B. Waymire

Emory University - Department of Accounting

Date Written: June 1, 2010

Abstract

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, M41

Suggested Citation

Dickhaut, John and Basu, Sudipta and McCabe, Kevin A. and Waymire, Gregory B., Neuroaccounting: Consilience Between the Biologically Evolved Brain and Culturally Evolved Accounting Principles (June 1, 2010). Accounting Horizons, Vol. 24, No. 2, pp. 221-255, 2010. Available at SSRN: https://ssrn.com/abstract=1652426

John Dickhaut

Chapman University (Deceased)

Sudipta Basu

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States
215.204.0489 (Phone)
215.204.5587 (Fax)

Kevin A. McCabe

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

Gregory B. Waymire (Contact Author)

Emory University - Department of Accounting ( email )

Goizueta Business School
1300 Clifton Road
Atlanta, GA 30322
United States
404-727-6589 (Phone)
404-727-6313 (Fax)

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