We can think about organization as a set of contracts among people seek ing their own goals, and accounting as a means of implementing these contracts. This perspective takes" a crude look at the whole" of accounting and its function in organizations. Business firms draw their resources from many markets including the capital market. During the last two decades we have discovered how individual behavior does and does not affect markets, how information is disseminated in a market from one trader to another in the process of trading, how information production must be paid for, and the consequences of the existence of insiders in a market for aggregate efficiency as well as distributive efficiency of the firm. From these findings we can draw many lessons about regulation of accounting. We should be cautious about overestimating what can be achieved through mandatory or legal approach to accounting standards and insider trading. Problems that have afflicted many of the stock exchanges of the world during the past decade have deep economic roots that can be addressed through long term structural changes. Legal or mandatory efforts in this direction are unlikely to be effective unless they are consistent with the self-interest of the people who participate in the firm.