INTRODUCTION 1.1 The Objective of This Book 1.2 Some Historical Perspective 1.3 The 2007-2008 Market Meltdowns 1.4 Efficient Contracting 1.5 A Note on Ethical Behaviour 1.6 Rules-Based v. Principles-Based Accounting Standards 1.7 The Complexity of Information in Financial Accounting and Reporting 1.8 The Role of Accounting Research 1.9 The Importance of Information Asymmetry 1.10 The Fundamental Problem of Financial Accounting Theory 1.11 Regulation as a Reaction to the Fundamental Problem 1.12 The Organization of This Book 1.12.1 Ideal Conditions 1.12.2 Adverse Selection 1.12.3 Moral Hazard 1.12.4 Standard Setting