Public sector accounting and financial reporting have had a long and varied history. Examples are provided from ancient civilizations in China, India, the Islamic States and then developments in Western Europe are considered. Public sector accounting was a tool for the accountability of feudal stewards to their overlords. This changed to the accountability of government ministries and public sector entities to parliament with the introduction of parliamentary democracy from the nineteenth century.

Finally there was a change of emphasis from control to efficiency with the move to New Public Management and especially the accrual basis of accounting from the very end of the last century.