This subject examines the nature of financial accounting theory, its construction and application to accounting regulation. It examines the conceptual framework of accounting, measurement theory and accounting measurement systems and provides students with an understanding of the regulatory and reporting environment in Australia. In relation to accounting and research, this subject explores such areas as positive accounting theory, capital market research and behavioural research. International accounting and harmonisation, challenges or standard setters and emerging issues are explored in the contemporary issues part of the subject.