William McCarthy, professor in the Department of Accounting and Information Systems at Michigan State University’s Broad College of Business and original designer of the Resource-Event-Agent, or REA, accounting model, will be inducted as the 128th member of the Accounting Hall of Fame in August 2026.
The honor will be conferred by the American Accounting Association during its 2026 Global Connect meeting in Las Vegas, Nevada. The recognition marks a career that has reshaped the conceptual foundations of accounting systems and bridged the disciplines of accounting, computer science and information systems in ways that continue to influence both scholarship and practice.
McCarthy’s groundbreaking work began with his doctoral dissertation at the University of Massachusetts, where the conceptual foundations of REA first took shape. Those ideas were refined through rigorous review and ultimately published in two landmark papers in the Accounting Review during his time as an assistant professor at Michigan State University. The second paper, published in July 1982 and titled “The REA Accounting Model: A Generalized Framework for Accounting Systems in a Shared Data Environment,” became the seminal exposition of REA. Its subtitle signaled a bold vision — one centered on interoperability and ontology — that would define McCarthy’s research trajectory for decades.
The REA model is both predictive and normative. As a predictive model, it anticipated the evolution of file-based accounting systems of the 1970s and 1980s toward enterprise-wide databases enriched with semantic meaning and interoperability — an evolution realized with the rise of enterprise resource planning, or ERP, systems in the late 1980s and 1990s. As a normative model, REA provided a conceptual alternative to traditional general ledger structures, advocating instead for enterprise value-creation architectures. This approach influenced firms in the 2000s, most notably reflected in the design philosophy of the Workday ERP system.
Throughout the late 1980s and 1990s, McCarthy expanded REA’s scope with the collaboration of a distinguished group of MSU doctoral students, including Howard Armitage, Graham Gal, Paul Steinbart, Eric Denna, Steve Rockwell, Cheryl Dunn, Julie Smith David, Greg Gerard and Guido Geerts. When Geerts joined the MSU faculty in 1994, he and McCarthy further advanced REA across both the granularity plane — modeling supply chains, value chains and workflow — and the temporal plane, incorporating commitments, contracts and policies. In the early 2000s, McCarthy’s expertise drew him into international interoperability and database standards initiatives. These efforts culminated in significant contributions to standards such as ISO/IEC 15944-4 and ISO/IEC 15944-21, and they extended REA’s application to open value networks including Sensorica, Holochain and ValueFlows.
REA now stands as a fully articulated, interoperable and ontological alternative to double-entry accounting. Rather than embedding debit-credit judgments at the point of transaction capture, REA defers them to database views derived from event-level data, preserving traditional financial reporting options while more faithfully representing economic reality and entrepreneurial logic. A comprehensive catalog of REA’s present and future development components was published in 2022 as an AAA research monograph, “The REA Accounting Model as an Accounting and Economic Ontology” by McCarthy, Geerts and Gal.
“Since I started at MSU in 1978, my research has always been directed toward building better enterprise information systems by embedding microeconomic reasoning within semantic structures from database theory and top-down AI,” said McCarthy. “This marriage of accounting and computer science has been increasingly enabled by advances in computational power over the last 40 years, thus moving toward the point of commercial viability and overcoming many of the centuries-old weaknesses of accounting done with pervasively embedded double-entry structures.”
In addition to his research accomplishments, McCarthy is widely recognized as a master teacher. Over four decades at MSU, he has earned numerous instructional and curriculum awards, including multiple departmental Salmonson Awards and college-level Withrow and Lewis awards. Nationally, he received the AAA Innovation in Accounting Education Award in 2003, the AAA Outstanding Service Award in 2007, the AAA Outstanding Accounting Educator Award in 2008, and the prestigious American Accounting Association/J. Michael and Mary Anne Cook/Deloitte Foundation Prize in 2019. He was also honored with the MSU Distinguished Faculty Award in 2000.
In the classroom, McCarthy often challenges students with a guiding principle (adapted from Alan Kay) that captures his lifelong ethos of innovation: “The best way to predict the future of accounting systems is to design them yourself.” His induction into the Accounting Hall of Fame recognizes not only a transformative scholar, but a visionary educator whose ideas continue to shape the future of accounting.
