The antebellum expansion of the corporate form of business to support the development of a railroad transportation network in the United States is a precursor to the types of reporting problems identified in the principal‐agent literature of recent years. The case of the Mobile and Ohio Railroad, a major interstate carrier of the mid‐19th century, demonstrates financial accounting and reporting issues that management and capital providers faced in evaluating company performance, especially in times of complex political and economic change, rapid technological advancement, and the hostilities of war.

Quality of earnings issues, studied in this early corporate circumstance, afford a rich comparative setting for discussion of similar contemporary situations. This case, complete with original data sets and information, supports instructional objectives that seek to increase your experiential base and understanding. This experiential approach serves to improve your abilities to identify and critically examine similar aspects of contemporary 21st century accounting challenges, including earnings management and the application of cash‐flow‐based performance measures, such as earnings before interest, tax, depreciation, and amortization (“EBITDA”).

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