Ch01_Accounting_Anaylsis_and_Principles

Ch01_Accounting_Anaylsis_and_Principles - Chapter 1 As the...

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Chapter 1 As the U.S. economy began to take shape in the decades after the Civil War, the era of Andrew Carnegie, John D. Rockefeller, and J.P. Morgan, regulation of companies was largely left to individual states. “The reality is that mandatory disclosure was not a particularly big deal at the state level” until well into the 20th century, says Joel Seligman, president of the University of Rochester and author of books on securities law. In the absence of government regulation, any push for greater corporate openness largely fell to stock exchanges. In 1869, the New York Stock Exchange (NYSE) required that all shares of listed companies be registered at a bank or other appropriate agency. The move was aimed at stopping the practice of companies “watering” stock by issuing shares without telling anyone—thus secretly diluting the holdings of existing shareholders. The NYSE, according to its own official history, delisted the stock of a railroad for several months until the company agreed to comply with the new rule. Accounting
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Ch01_Accounting_Anaylsis_and_Principles - Chapter 1 As the...

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