Abstract: The standard theory of measurement that evolved from Johann von
Neumann idea of the first kind of dynamics (state reduction) contains two
errors. First, it disregards the disturbance of measurement due to particles
in the environment that are indistinguishable from the measured system S.
Correction of this error leads to a new theory of observables, to the
definition of the so-called separation status of S and to the hypothesis
that Schroedinger equation must be modified for changes of separation
status. Second, it does not distinguish between ancilla A (microscopic) and
detector D (macroscopic) in the measurement apparatus. It seems that any
measurement includes detectors (even ancillas must be detected). In this
case, the interaction of D with S or A changes separation status of S or A
and justifies the state reduction. Moreover, the state reduction has then a
definite preferred frame, place and time.