Skip to content
Tax Talent & Culture

A deeper understanding of brain science can help address talent challenges within accounting

Natalie Runyon  Director / ESG content & Advisory Services / Thomson Reuters Institute

Natalie Runyon  Director / ESG content & Advisory Services / Thomson Reuters Institute

Can "neuroaccounting" change the way tax & accounting firm leaders understand and approach their most challenging talent problems?

A new field of study at the intersection of brain science and the tax & accounting profession is emerging. It is called neuroaccounting, and it sits at the intersection of neuroscience, cognitive science, and behavioral accounting that theorizes that human behavior, decision-making, accounting principles and the idea of conservatism, stem from the functioning of the brain.

We spoke to Marsha Huber, Director of Research at the Institute of Management Accountants (IMA), and a pioneer in this emerging area of study since 2014, about the key findings from her neuroaccounting research.

Understanding the brain & how accounting expertise is developed

In the beginning, a novice learner, such as an accounting student, has a lot of technical knowledge and neurons in the brain that contain bits of knowledge. However, these neurons have not yet developed into neural networks that enable learners to connect the dots and weave concepts together. “A novice auditor can follow checklists, but it takes a few years for the neurons in the brain to form networks to fully grasp the knowledge to the point where they can tie concepts together that they could not have done as a novice,” says Huber.

As accountants build their expertise after 10 years in the profession, the neural pathways expand and grow together. This is why an audit partner has the ability to forecast potential problems and determine mitigating plans and actions before they occur.

Huber’s electroencephalogram (EEG) studies of the brain with accounting students and their ability to identify relevant and irrelevant financial accounting terms provides proof. The novices’ brains did not recognize accounting terms that did not fit within a particular financial accounting schema. The more experienced students’ brains, however, did identify the irrelevant terms despite not being asked to do so.

Key takeaways for team managers & accounting employers

By using the insights from neuroaccounting, accounting team managers and accounting industry employers could maximize team performance and engagement among their professional workers. Some of these key concepts include:

Understand learning is nonlinear and grows in spurts — The basics of learning are irregular and vary among learners. Indeed, it takes time to learn, and the brain also learns in context. A novice may not be able to apply learning to different contexts, whereas an expert can. In addition, a learner’s knowledge grows in spurts. Learners often forget what they initially learned, but as time goes by and the brain makes better sense of things, the learner will level up.

brain science
Marsha Huber, Director of Research at the Institute of Management Accountants

Learning can occur during a class for one person, when working in a group for another, and still, working independently for someone else, according to Huber. As knowledge develops in learners, accountants can experience mini a-ha moments when new knowledge breaks through to the conscious mind from the subconscious mind. Insights tend to come when not actively working on the problem.

Increase the creation of “flow” time — Huber recommends that accounting employers create opportunities for employees to experience flow. “Because of neuroscience, we understand that being ‘in the zone’ or ‘flow’ can produce exceptional output,” Huber explains, adding that this practice and bring amazing feelings of energy and focus to work.

Activities that enable flow are having no-meeting days and taking breaks, such as siestas, in the afternoon. Employers should allow employees to block off uninterrupted time to create time for flow.

Investing in time for rest allows for incubation, where neurons can figure out better solutions and develop the neural networks of expertise. In a study that Huber conducted, she found that accounting students napped more than professionals (and other students), hypothesizing that they needed to replenish the energy they expended while learning complex content.

Learning on the job is a recipe for success for accounting professionals, of course, yet it also makes sense to remove the stigma of napping and allow for incubation and the neural networks in the brain to build expertise from the learned experiences during the day.

Understand the brain science of manipulation on accountants’ ethics and decision-making — Finally, understanding the implications of neuroscience indicates that some accountants are more prone to being manipulated than others. “Mirror neurons” in the brain unconsciously will cause some to mirror or imitate the actions of others.

This has implications for the accounting profession. Researchers studied this phenomenon in controllers. In essence, because of the way the brain thinks and functions, friendlier controllers could be manipulated more easily than unfriendly controllers. Controllers that mirrored other people were more likely to make questionable ethical decisions when pressured by others.

Managers of accountants also benefit from neuroaccounting in team assignments — Huber highlights the key takeaway of her work: That managers need to understand better how their teams are wired and play to each team member’s strengths and preferences through four profiles, which are:

      1. Clarifiers ask a lot of good questions to get the group moving in the right direction from the start;
      2. Ideators like to brainstorm and explore new ideas;
      3. Developers identify pros and cons and enjoy developing mitigation plans; and
      4. Implementers prefer to focus on execution.

To put this into practice, managers could give new problems to clarifiers to clarify challenges, then, hand the challenge to ideators to brainstorm solutions, who send potential solutions to developers to analyze pros and cons and recommend a way forward to address the problem, and finally, hand it off to the implementers to execute the plan.

As an advocate and researcher in neuroaccounting, Huber says she hopes that an increased understanding of how the brain learns will enable more efficient training practices and help to close the talent gap in finding employees for current entry-level roles in the tax & accounting profession.

“We aren’t using neuroscience to train our people at all,” Huber says. “And if we used neuroscience and understood it, people would learn better, and we would teach better.”

More insights