Neurophysiological Methods in Accounting and Finance

ABSTRACT Recent advances in neuroscience have made neurophysiological methods increasingly accessible, creating a timely opportunity to rethink how accounting and financial decisions are studied. Yet accounting and finance research has been slow to exploit its full potential. This paper argues that neurophysiological methods are not merely novel measurement tools, but theory‐enabling instruments that can reveal otherwise unobservable mechanisms underlying judgment, disclosure processing, incentives, ethics, and risk‐taking. Drawing on a systematic review of 55 high‐quality studies published in leading journals, we show how these methods uncover the roles of attention allocation, cognitive effort, emotional arousal, learning, and moral conflict in shaping accounting and financial decisions. Our analysis demonstrates that existing research remains heavily concentrated on eye‐tracking, while EEG and fMRI are still underused despite their greater potential to discriminate between competing theoretical explanations. Building on this evidence, we develop a mechanism‐based framework that integrates neuroaccounting and neurofinance and repositions neurophysiological methods from a peripheral methodological novelty to a central analytical resource for international financial management and accounting research. We further derive a prioritized research agenda that identifies where these methods can generate the strongest theoretical leverage, the clearest cross‐domain insights, and the most consequential advances for future scholarship.