This chapter introduces the idea of thin political markets through a striking narrative on the evolution of current corporate accounting rules for mergers and acquisitions (M&A). The narrative illustrates how certain groups – in this case, investment banks and companies routinely engaged in M&A – are able to subtly structure the rules in ways that advance their own interests while potentially compromising accounting’s role in facilitating investment allocation in the market economy. Next, the chapter provides a brief history of accounting rulemaking institutions in the United States since the 1930s, when the development of generally accepted accounting principles (GAAP) was first regulated. This description also introduces readers to the key players in accounting rulemaking today – including, especially, the Financial Accounting Standards Board (FASB), which sets corporate accounting rules in the United States. The chapter then provides a detailed roadmap to the rest of the book.
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