The REA Modeling Approach to Teaching Accounting Information Systems

Abstract

The REA model was first conceptualized in a paper for the 1982 The Accounting Review as a framework for building accounting systems in a shared data environment, both within enterprises and between enterprises. The model's core feature was an object pattern consisting of two mirror-image constellations that represented semantically the input and output components of a business process. The REA acronym derives from that pattern's structure, which consisted of economic Resources, economic Events, and economic Agents. Simultaneous with its research publication, REA began to be used as a framework for teaching accounting information systems (AIS), originally at Michigan State University and then gradually at other colleges and universities. In its extended form, the REA model integrates the teaching of accounting transaction structures, commitment and business policy specification, business process engineering, and enterprise value chain construction. As of 2003, REA modeling is used in a variety of AIS courses and featured in a variety of AIS textbooks, both in the United States and internationally.