William E. McCarthy

Department of Accounting and Information Systems

Michigan State University

TEL: 517-432-2913       

EMAIL: mccarthy@broad.msu.edu

Broad College of Business profile:



This web page is being revamped and reconstructed.  In the meantime, I have maintained most of the REA (Resource-Event-Agent) paper links for readers who want to see those papers and for those other web sites that link directly to the papers.  If I goofed and disabled a link of yours in the initial (quick) reorganization, please let me know. 

For those readers who come to this website seeking an overview of the REA (resource-event-agent) ontology work, I have two suggestions:

1.      The first is a talk given to the American Accounting Association in September of 2016.  This is a 30-minute video-recorded overview, based on the TED-talk  format:   http://aaahq.org/Meetings/2016/Accounting-Is-Big-Data-Conference/Video-Gallery/AIBD-Video-10-Public

2.      The second is a recorded audio-only presentation to the Ontolog Forum on the 7th of November 2013.  This was part of an Ontology Based Standards Conference Call where my presentation went from minute 16:00 to minute 47:00.  Some practitioners have found this recording useful because it gives lots of explanations for the ontological categories and it includes a simple “cookie” example.  I would suggest downloading my slides first to be advanced locally while listening to the recording (minutes 16-47).   http://ontolog.cim3.net/wiki/ConferenceCall_2013_11_07.html

The categories used in the ONTOLOG talk have been updated slightly in the new monograph to be published by the American Accounting Association (see below).  

For an overview of REA, please see the Wikipedia entry. I am not sure I agree with all that is said there (especially with regard to the penetration of REA principles in the ERP marketplace), but it is a good overview from the perspective of others.

There is also a wonderful 60-minute teaching tutorial for REA (done by Seow Poh Sun from Singapore Management University) here:  http://smu.sg/rea/


Graham Gal, Guido Geerts, and I are done with the draft of the REA monograph, and it has been submitted to the American Accounting Association for peer review.  We have actually been working on this for quite some time, and it is an excellent summary of everything we now have configured in the REA ontology. Much of this work has been reviewed at the VMBO workshops of the last 5-7 years.  We hope that this will become the starting source for REA design work.

Bob Haugen’s and Lynn Foster have a wonderful website where they have adapted the REA ontology for use in Open Value Networks (like SENSORICA).  Their ValueFlows is “a set of common vocabularies to describe flows of economic resources of all kinds within distributed economic ecosystems.  Its purpose is to enable internetworking among many different software projects for resource planning and accounting within fractal networks of people and groups. The vocabulary will work for any kind of economic activity, but the focus is to facilitate groups experimenting with solidarity / cooperative / collaborative / small business ecosystem / commons based peer production / any transitional economies, based on REA.”  https://valueflo.ws/     .

An outstanding review of REA research was recently published in May 2016:

Dunn, Cheryl; Gerard, Gregory J.; and Grabski, Severin V. (2016) "Resources-Events-Agents Design Theory: A Revolutionary Approach to Enterprise System Design," Communications of the Association for Information Systems: Vol. 38, Article 29.

Available at: http://aisel.aisnet.org/cais/vol38/iss1/29    (copies also available directly from Cheryl Dunn at justcheryl.dunn@gmail.com ).

Some of the fundamental REA papers are available below. Some of the papers have been scanned in from the original sources, so they are large Acrobat pdf files.  Others are in HTML or MS-WORD format. This list is volatile, and for those papers that have only an abstract, a full electronic or paper version can be obtained by email request from Bill McCarthy at mccarthy@broad.msu.edu.  I realize that this list of papers is far from complete, and I am trying to make access to all of the REA work easier. The available papers below constitute a very good representative set; readers who would like a more comprehensive overview may consult my UTS seminar schedule through which many papers are linked.   Of course, that seminar was some time ago, and much has happened since.  A better overview is the May 2016 paper by Dunn, Gerard, and Grabski mentioned above, and (even better) our six monograph chapters that are coming soon.  Hopefully, this AAA monograph project will make the current state of affairs even clearer. On my “to do” list is an audio voice-over of a SUFE seminar in Shanghai in July 2017. 

For those of you who work through these available papers and still have questions, please feel free to contact me via email or telephone. 





Significant REA Model papers (table listing)

William E. McCarthy. "The REA Accounting Model: A Generalized Framework for Accounting Systems in a Shared Data Environment," The Accounting Review (July 1982) pp. 554-78

William E. McCarthy  An Entity-Relationship View of Accounting Models,” The Accounting Review (October 1979), pp. 667-86.

Guido Geerts and William McCarthy, Policy-level Specifications in REA Enterprise Information Systems , Journal of Information Systems, 2006 .

William E. McCarthy “The REA Modeling Approach to Teaching Accounting Information Systems  ISSUES IN ACCOUNTING EDUCATION, Vol. 18, No. 4, November 2003, pp. 427-441

Julie Smith David, Gregory J. Gerard, and William E. McCarthy  "Design Science: An REA Perspective on the Future of AIS"

Guido Geerts and W.E. McCarthy  Using Object Templates from the REA Accounting Model to Engineer Business Processes and Tasks”

Guido Geerts and W. E. McCarthy “An Ontological Analysis of the Primitives of the Extended_REA Enterprise Information Architecture”

Julie David, W. McCarthy, and B. Sommer ”Agility: The Key to Survival of the Fittest in the Software Market”

William E. McCarthy. "Semantic Modeling in Accounting Education, Practice, and Research: Some Progress and Impediments," Published in: Conceptual Modeling: Current Issues and Future Directions, Editors: P. P. Chen, J. Akoka, H Kangassalo, and B. Thalheim. Springer Verlag, Berlin and Heidelberg, 1999, pp. 144-53

Guido L. Geerts and William E. McCarthy, "Modeling Business Enterprises as Value-Added Process Hierarchies with Resource-Event- Agent Object Templates," in Business Object Design and Implementation J. Sutherland and D. Patel (eds.), 1997, Springer-Verlag, pp. 94-113

Guido Geerts and William.E. McCarthy  An Accounting Object Infrastructure For Knowledge-Based Enterprise Models,”  IEEE Intelligent Systems & Their Applications (July-August 1999), pp. 89-94.  Earlier version presented in Ontological Engineering -- Papers from the 1997 AAAI Spring Symposium (A.Farquhar and M. Gruninger, eds.) ISBN: 1-57735-042-1 (AAAI press).

Cheryl L. Dunn and William E. McCarthy “The REA Accounting Model: Intellectual Heritage And Prospects For Progress,” The Journal of Information Systems (Spring 1997), pp. 31-51

Guido L. Geerts, William E. McCarthy, and Stephen R. Rockwell "Automated Integration Of Enterprise Accounting Models Throughout The Systems Development Life Cycle" Intelligent Systems in Accounting, Finance, and Management, Volume 5 (1996), pp. 113-128

Guido L. Geerts and William E. McCarthy "Augmented Intensional Reasoning in Knowledge-Based Accounting Systems"  The Journal of Information Systems (an early version of  this paper was presented at the Twelfth International Workshop on Expert Systems and Their Applications, June, 1992, Avignon, France)

Guido L. Geerts and William E. McCarthy "The Ontological Foundations of REA Enterprise Information Systems"

Robert Haugen and William E. McCarthy "REA: A Semantic Model for Internet Supply Chain Collaboration"


Integrating Information Technology into Accounting Research and Practice, Guido Geerts et al., 2013, Accounting Horizons 


William E. McCarthy, Accounting Craftspeople versus Accounting Seers: Exploring the Relevance and Innovation Gaps in Academic Accounting Research . Accounting Horizons , Vol. 26, No. 4, 2012, pp. 833–843


More papers to be linked in late 2017 (sorry for delay)



Here are some other REA links:


·         The Value Management and Business Ontologies Workshops in Stockholm (2009), continuing through Trento (2016) and Luxembourg (2017). These sites have additional linkages to intervening workshops.  These workshops have been one of the main forums for discussion of REA ideas.  The 2016 workshop in Trento (run by Nicola Guarino) was coupled with a new workshop on Value Management in Services last year.  VMBO-2018 will be held in Amsterdam on 26-27 February 2018.

o   http://www.loa.istc.cnr.it/vmbo2016/

·         Pavel Hruby's REA site:

o   http://reatechnology.com/ 

·         The First International REA Research Conference in Copenhagen, Denmark on 22-24 April 2004.  There are a number of position papers available at http://www.itu.dk/people/kasper/REA2004/index.html . 


·         Proceedings, presentation slides, and pictures are available from the 2nd International REA Technology Workshop, held at Santorini Island, Greece in June of 2006


·         A good theoretical overview (somewhat dated) with links to papers is my UTS seminar schedule from January 2004.


·         Kip Twitchell -- who along with Rick Roth pioneered some events-based REA principles within the IBM SAFR (Scalable Architecture for Financial Reporting) system and the earlier GENEVA system of PwC – has started a series of web videos on business events ideas.  The overview segment is here, but other simple explanation segments are being added. 


·         There is a possibility that we may have some on-line REA presentations during later 2017, coordinated by Wim Laurier.  Let me know if you are interested in participating.


REA Standards Activities


The second version (2015) of the open-edi accounting and economic ontology (ISO/IEC 15944-4) is now available from ISO.  You may download a copy free at this website:

2007 version: http://jtc1sc32.org/free_standards.html 

2017 version: http://standards.iso.org/ittf/PubliclyAvailableStandards/ .


REA work within the United Nations Trade Facilitation Group (UN/CEFACT) is due to resume soon.  There is also ongoing work in OMG that I hope to pinpoint and update on a continuing basis when I move further along on the website update project.  At present within ISO, we are also working on a new blockchain and open value network standard for open-edi that will build on REA and 15944-4. That group is meeting in Montreal in November 2017.

My courses at Michigan State University


In my teaching at MSU, I use a lot of the REA research work, especially in ACC-821. For my prospective students, here are my teaching ratings for the last five years.  The ratings for ACC-825 actually combine both sections, because the MSU system lists them as one. For 2017-2018, this is my schedule (unfortunately full at present):

  • Fall 2017 – Accounting Information Systems (ACC-821) –section 1
  • Fall 2017 – Object-Oriented Accounting Systems with JAVA programming (ACC-825) – sections 1 & 2
  • Spring 2018 – Advanced Enterprise Accounting Systems (ACC-823) – section 1

For those undergraduates aspiring to take our accounting MS degree systems track, my advice is to apply early as our slots fill quickly.