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The public sector retains a separate unique approach in most countries. Services are often provided free at the point of use and there is little or no direct link between the cost of these and government income, which is mainly in the form of taxation. Thus, public-sector accounting is significantly different from that found in the private sector.

In the private sector, the accounts are designed to report the level of profits achieved and retained. In the public sector, at least traditionally, the accounts compare actual payments and receipts with those which were planned in the government's originally agreed annual budget.

In recent years the major debate in public-sector accounting has been over the changes which some countries have made from the cash basis to the accruals basis of accounting. This has also included a debate over whether the private-sector conceptual framework is appropriate for the public sector.

In most countries, even those industrialised countries that are members of the Organisation for Economic Co-operation and Development (OECD), cash accounting has been retained in the public sector. Thus, public-sector accounting is relatively simple and as a result, there are proportionately fewer accountants in the public sector. At least 10% of ACCA members work in the public sector, but in many countries they hold the most senior positions, for example, accountant- general or auditor-general.

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