Accounting, transparency and accountability is still a quotidian topic in public finance, macroeconomics and public law, administration.
The IPSAS was the starting point for the development of EPSAS, and this process is expected to significantly shape the accounting practices of the EU member states. The accounting system can consist of two doubleentry bookkeeping subsystems, a cash-based public (budgetary accounting) sector accounting system and an accrual-based financial accounting system (financial accounting).
IFRS requires the use of accrual-based accounting for not-for-profits and the public sector. Cash-based reporting is too open to misinformation and outright fraud. The Canadian province of Quebec received an adverse opinion on their financial statements in the 1980s or 1990s because they went back from an accrual-based system to cash-based reporting.
The response by Mr Wright is apt. To avoid misrepresentation of information and fraudulent manipulation of the accounting numbers was all that the founding fathers of the IFRS hence the accrual based financial accounting stand to correct universally.
I think that accrual accounting it's better than cash accounting but the budget still continue being a fundamental piece of management in public sector. So in this case i'm in favour to have a dual system where acrrual accounting remain the fundamental piece of management and decision taking. Cash accounting would be a complement to accrual accounting. Please check the works of Prof. Van Helden, for me, is one of the best researcher in this field.
I will also vote for accrual-based accounting system. This way the reporting of the public sector entities will be concise to a some degree with the reports from the private entities and could be used for some validations, check-ups and even comparison (when applicable). However public entities must continue to report a cash flow statement which I suggest to be more complex and descriptive from the one according to the IAS 7.
Depending the type of analysis that you want we need both. But in the line of a modern and suitable accounting systems it's obvious that accrual accounting give you a better financial-economic view of the operations of the institution. The problem of cash based accounting is the final report that only show what you have payed or what you have earned hiding the economic and financial impacts of operations in a long-term perspective. Think in cases of PPP for exemple.