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The chapter discusses the recent multifaceted developments in public sector financial management and in particular the contribution of the permanent study group (PSG) XII in the debate regarding the reforms and the innovations occurring at all governmental levels and different public sector organizations. Guiding the reader through the journey of the PSG, the chapter outlines the key challenges that future studies dealing with public sector financial management will be called to envisage. In parallel, it focuses on the harmonization of governmental accounting systems towards IPSAS or EPSAS and national accounts in Europe by shedding light on the existing situation and the imminent trends.

Public sector organisations (PSOs) today are urged to act within an extremely complex ‘web of accountability’. Discharging hier-archical and legal accountability is no longer sufficient: satisfying the information needs of superordinate bodies and obeying disclosure requests as mandated by laws and regulations are both seen as merely complying with obligations. The chapter aimed to discuss the role of new public sector reporting tools from two different perspectives. First, how they can impact the provision of information to and creation of opportunities for dialogue with various stakeholders, including citizens, public sector entities, supervising organ-isations and financial institutions. And second, how they can change the defined strategies and management activities, thus affecting routines, pro-cedures and reports.

The chapter discusses Financial Sustainability (FS) in relation with governance setting for service delivery adopted by Local Governments (LGs). The changing corporate governance setting in public entities and their relationships with other entities that are co-makers in service delivery requires a wider vision of FS, encompassing all entities involved. The chapter aims to analyze how specific accounting tools and techniques can assist in the control of an LG ’s FS based on the governance setting adopted for service delivery. More precisely, a standard accounting tool or technique to detect fiscal distress would not be effective for all LGs. Through the analysis of five case studies, the chapter demonstrates that promoting FS requires the adoption of accounting tools and techniques consistent with the governance model adopted.