History-Based Accounting Reform: Using Mathematics Perspective to Identify and Solve Some Main Problems in Accounting Education and Standards

Abstract

Manuscript Type: Perspective Research Issue: Perceived as a pure social science, prominent accounting scholars agree that the current accounting development overemphasizes on rules, and this has wide negative impacts on accounting education and research. Thus, accounting reform is necessary even though it is still unclear the direction of the reform. Research Findings/Insights: The basic thesis of this study is that accounting is an application of mathematics because accounting was documented in the mathematics book and written by Luca Pacioli as a mathematics professor. Firstly, this study shows the inappropriateness of current accounting teaching methods. Specifically, this study shows that the use of debits and credits is purely the application of mathematics. Secondly, this study identifies the limitation of the definition of financial statement elements, and proposes the alternative redefinition of the elements. Thirdly, this study shows that the use of a mathematical perspective helps accounting profession to solve current accounting issues. Finally, this study proposes the development of three pillars, i.e. mathematics, rules, and art, in a balanced manner to do accounting reform. Theoretical/Academic/Policy Implications: This study provides a “new” perspective that the accounting development is based on the history of accounting itself, i.e. accounting as an application of mathematics. Using the mathematical perspective, not only do accounting scholars improve the accounting education but also we innovate accounting research agenda. In addition, this study offers insights to accounting standard boards interested in developing a global uniform of financial accounting standard that effectively work.