1 Introduction
It is perhaps little known that accounting and mathematics have been connected for
more than 500 years ago. In 1494, Luca Pacioli published his mathematics compendium
Summa de Arithmetica, Geometria, Proportioni et Proportionalita consisting of
615 pages. “[T]he only significant part of the book that has ever been translated to
English” was the 27-page treatise on bookkeeping,1 which defines the hour of birth
of accounting. So to speak the study of double entry accounting was developed in
concert with linear algebra.2 Beyond the joint development, which becomes apparent
in Pacioli’s book, there are several reasons why accounting offers a very good
application for mathematical techniques and mathematical knowledge. First, accounting
phenomena cannot be understood best by just observing them. For generating
predictions and interpretations [analytical] theory is required.3 Second, formalizing
economic arguments by means of a mathematical model results in a more rigorous