Accounting norms preceded generally accepted accounting principles (GAAP), but little is known about how and why these norms emerged. We hypothesize that private-sector institutions aimed at building a knowledge base among practicing accountants fostered accounting norms before formal...

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...

We critically evaluate Sprouse's 1966 Journal of Accountancy article, which prodded the FASB towards a balance-sheet approach. We highlight three errors in this article. First, Sprouse confuses necessary and sufficient conditions by arguing that good accounting systems must satisfy the...

We critically evaluate Sprouse (1966 Journal of Accountancy), which prodded FASB towards a balance sheet approach. We highlight 3 errors in this article. First, Sprouse confuses necessary and sufficient conditions by arguing that good accounting systems must satisfy the balance sheet equation....

Braun (this issue) argues that the traditional accounting principles underlying the revenue-expense approach such as Historical Cost and Conservatism are ecologically rational in that they help organizations survive better in uncertain economic environments. More importantly, he argues that the...

We develop the hypothesis that culturally evolved accounting principles (e.g., Objectivity) have their roots in how the biologically evolved human brain evaluates the desirability of reciprocal exchange. Our analysis is communicated in two related parts. In this first essay, Part I, we provide...

We develop the hypothesis that culturally evolved accounting principles are ultimately explained by their consilience with how the human brain has biologically evolved to evaluate opportunities for exchange. The primary function of accounting in evaluating exchange is providing information on...

We experimentally demonstrate a causal link between recordkeeping and reciprocal exchange. Recordkeeping improves memory of past interactions in a complex exchange environment, which promotes reputation formation and decision coordination. Economies with recordkeeping exhibit a beneficially...