This module aims to increase students’ knowledge of financial accounting theory and its relevance to accounting practice. The module examines market for accounting information; processes and effects of regulating financial reporting; the incentives which drive managers’ choices of alternative accounting policies; unregulated financial reporting with specific focus on environmental, social and governance (ESG) reporting, capital markets’ response to accounting information; the critical perspectives of accounting and also considers a number of other important issues in financial reporting. Upon successful completion of this module, students should develop a good understanding of the role of financial accounting theory and its importance for accounting practice and reporting.