Development of simulation in accounting and finance


Many scholars and practitioners agree that businesses face increasing levels of uncertainty and risk across various domains. Simulation is often applied to manage risk and uncertainty. Moreover, the method benefits from advances in the availability of computing power. Thus, the external environment in recent years has been conducive to simulation research in the closely related disciplines of finance and accounting. We investigate in how far these trends have affected the research output and take stock of the current literature and analyze which trends drove the research agenda. We conduct a quantitative literature review via a citation and co-citation network analysis. Throughout the analysis we contrast the differences between how simulation is applied in accounting and finance and find supporting evidence to the claim that the use of simulation in finance research is more widespread than it is in accounting research. Through our citation analysis we find that the research output has expanded at a faster pace than the output across disciplines as measured in the total number of publications and that simulation is used extensively both as an instrumental as well as a conceptual tool. Contrary to expectations we find that conceptual use is more common in finance than in accounting.