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The Rise of Modern Accounting and the Fall of the Public Company: The Lancashire Cotton Mills, 1870-1914

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J S Toms

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Abstract

This paper describes the main features of a system of open corporate accountability to active working and middle class investors supported by a relatively efficient capital market operating in late nineteenth century Lancashire. The economic causes and social consequences of the collapse of this system are documented and analysed with special reference to the process of accounting change. The centralisation of share ownership was associated with the rise of a clique of new directors skilled at mill flotation. This new group of shareholder entrepreneurs are shown to be the instigators and beneficiaries of the adoption of modern accounting practices.

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Paper provided by University of Nottingham, School of Management & Finance in its series SMF Discussion Paper Series with number 9801.

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Handle: RePEc:wuk:nofidp:9801

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  1. Grossman, Sanford J & Stiglitz, Joseph E, 1980. "On the Impossibility of Informationally Efficient Markets," American Economic Review, American Economic Association, vol. 70(3), pages 393-408, June.
  2. Burchell, Stuart & Clubb, Colin & Hopwood, Anthony G., 1985. "Accounting in its social context: Towards a history of value added in the United Kingdom," Accounting, Organizations and Society, Elsevier, vol. 10(4), pages 381-413, October. [Downloadable!] (restricted)
  3. Arrington, C. Edward & Francis, Jere R., 1989. "Letting the chat out of the bag: Deconstruction, privilege and accounting research," Accounting, Organizations and Society, Elsevier, vol. 14(1-2), pages 1-28, January. [Downloadable!] (restricted)
  4. Watts, Ross L & Zimmerman, Jerold L, 1983. "Agency Problems, Auditing, and the Theory of the Firm: Some Evidence," Journal of Law & Economics, University of Chicago Press, vol. 26(3), pages 613-33, October.
  5. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October. [Downloadable!] (restricted)
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