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KEYNOTE ON THE REA-INVENTION OF DOUBLE ENTRY BOOKKEEPING BY WILLIAM E. McCARTHY

Moving Accounting Back to the Center of Enterprise Information Architectures

KEYNOTE
Friday 21 September 2012

William E. McCarthy is a Professor of Accounting & Information Systems at Michigan State University. He has published extensively in both the accounting and computer science literature, and his paper on REA accounting systems was awarded the first and only Seminal Contribution to the Accounting Information Systems Literature Award in 1996.

foto McCarthyHe has been an editor for The Journal of Information Systems and The Accounting Review, and in 2008, he was awarded the highest honor given to accounting professors internationally – The Outstanding Accounting Educator Award. At Michigan State University, he has won numerous departmental and college teaching awards, and in 2001, he was awarded MSU’s highest distinction – The MSU Distinguished Faculty Award.

The Venetian method of double entry bookkeeping was first codified by the Franciscan monk Luca Pacioli in 1494, and for centuries it remained as the core of information systems for economic ventures and business firms. It was an invention that predated Copernicus, Galileo, Kepler, and Newton, and even today, most accountants consider it the best pure form for business information architectures. They trust it profoundly, both for tracking corporate accountability and for providing decision-relevant information, even though many of its conventions were engineered in an era of quill pens and paper-based information processing capabilities.

In 1982, McCarthy summarized in a theoretical fashion the inadequacies of double entry conventions in a computerized and shared data environment, and over the next 30 years, virtually all of what he foresaw has proven to be true. In the age of enterprise-wide information architectures, ubiquitous interoperability and connectivity environments, pervasive source-data and workflow automation, and escalating complexity of both products and financial instruments, that accountant trust in the efficacy of 500 year old bookkeeping methods has been proven to be misplaced.

In this keynote address, McCarthy will review those original arguments in the light of technological progress in enterprise computing environments, and he will discuss the progress in his remedies for those deficiencies in the newly updated Resource-Event-Agent (REA) accounting and economic ontology. REA will be seen here as a method for restoring economic accountability structures back to the core of enterprise information architectures by combining them with the operational, policy and scheduling needs of non-accounting domains like marketing, manufacturing, logistics, and management.

Keynote on The REA-invention of Double Entry Bookkeeping - Moving Accounting Back to the Center of Enterprise Information Architectures (Friday 21 September 2012) by prof. William E. McCarthy, Professor of Accounting & Information Systems, Michigan State University
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6th International Conference on Research and Practical Issues of Enterprise Information Systems

logo IFIPThe CONFENIS 2012 Conference is a joint effort of the Economic Council for East Flanders, the Ghent University and the IFIP TC8 Working Group 8.9 on Enterprise Information Systems.

The sixth International Conference on Research and Practical Issues of Enterprise Information Systems, CONFENIS 2012, will be held in Ghent, Belgium, September 19-21, 2012. CONFENIS, The Enterprise Information Systems International Conference on Research and Practical Issues of EIS, is a primary international event of the IFIP TC8 Working Group 8.9. This event provides an opportunity for academicians and practitioners throughout the world to gather, exchange ideas, and present original research in the field of enterprise information systems. Scientists and professionals are invited to address the current research topics in the area or the research frontier at this unique international forum.
Accepted papers will be published as full or short papers in a Lecture Notes in Business Information Processing (LNBIP) volume by Springer. Chairman of the conference is prof. dr. Geert Poels, Professor in the rank of Senior lecturer, Department of Management Information and Operations Management, Ghent University.

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