Is Neuroaccounting Taking a Place on the Stage? A Review of the Influence of Neuroscience on Accounting Research

In a 2012 essay, Birnberg and Ganguly asked, ‘Is neuroaccounting waiting in the wings?’ They describe how, before the turn of this century, economists began research collaborations with both psychologists and neuroscientists to understand economic decision-making on physical and neuronal levels, giving rise to a field called ‘neuroeconomics.’ The goal of these collaborations was, and still is, to use methodologies that capture physical responses to stimuli to provide new insights into the cognitive processes underlying individuals’ decisions and interactions with others and with organizations, markets, and societies.

Human neuroscience research examines how the nervous system is organized and how it produces perceptions, thoughts, and behaviors. The nervous system encompasses the brain, spinal cord, sensory organs, and networks of highly specialized neurons, or nerve cells. Collectively, these components transmit and receive electrical and chemical signals to control movements and involuntary processes such as heartbeat and breathing; process and interpret external stimuli captured by the eyes, ears, skin, nose and mouth; and coordinate higher-order cognitive processes like attention, learning, memory, motivation, self-regulation, problem-solving, and beliefs about self and others (Bloom, 2013; Hsiao et al., 2009; Kowler, 2009; National Institute of Child Health and Human Development, 2018; Posner & Petersen, 1990; Purves et al., 2004, pp. 1–28; Society for Neuroscience, 2018, pp. 10–25, 32–43).

It’s insights about and technologies that capture these higher-order cognitive processes that can help accounting scholars more deeply understand how decision-makers physically and cognitively process and react to accounting information and controls. In a forthcoming paper in the European Accounting Review, we review accounting literature to map the development of the field of ‘neuroaccounting,’ in which accounting scholars, much like their counterparts in economics, incorporate neuroscience into their work.

Our systematic narrative review has four steps.

• We identify relevant literature using standards that reduce bias in literature selection and interpretation (Siddaway et al., 2019).
• We descriptively analyze the literature, categorizing it into three clusters based on the complexity with which the research connects to neuroscience (Birnberg & Ganguly, 2012; Smith, 2009):
  • by relating accounting research questions to neuroscience research;
  • by addressing accounting questions or tasks in ways that can motivate neuroscience or neuroaccounting research; or,
  • by using neuroscience technologies to investigate accounting questions.
• We further classify literature in each cluster into two broad accounting topic areas (Demski & Feltham, 1976).
  • ‘Reporting’ captures how individuals process accounting information when making decisions, akin to the decision-facilitating role of accounting
  • ‘Control’ captures how individuals react to accounting control systems, akin to the decision-influencing role of accounting.
• For each topic, we map relationships among the studies across clusters and over time.

Overall, we observe that the literature is coalescing into a field of neuroaccounting in ways that mirror the pattern of development in neuroeconomics, indicating that neuroaccounting is indeed taking a place on the stage of behavioral accounting research. Based on our analyses, we offer suggestions for future research. Our review provides a framework for future research at the nexus of neuroscience and accounting that provides unique insights into the ‘black box’ of cognitive processing in accounting contexts.

This paper is co-authored by Dr. Ann K. Tank, Institute of Business Administration, University of Stuttgart, and Dr. Anne M. Farrell, Farmer School of Business, Miami University.

A version of the manuscript is available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3748649.

References

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Smith, V. L. (2009). Introduction: Experimental economics and neuroeconomics. In P. W. Glimcher, C. F. Camerer, E. Fehr, & R. A. Poldrack (Eds.), Neuroeconomics: Decision Making and the Brain (pp. 15–20). London, UK: Academic Press.

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