During the last decades, many countries worldwide have introduced financial accounting reforms at one or more levels of government by replacing or transforming their traditional budgetary cash accounting systems into an accrual based accounting system in order to increase accountability and financial transparency. This paper presents an overview of the current financial accounting reform towards a new accounting system, which combines cash and accrual accounting information, in the Greek public health sector. The focus is on the concept of the reformed financial accounting legislation and on the cross-sectional differences in the level of adoption and implementation of the new accounting system in Greek public hospitals. Our analysis is based on an empirical survey that was conducted via questionnaires during 2008 on a sample of 132 Greek public hospitals. The empirical examination revealed the perceived usefulness of the accrual accounting system in producing and presenting adequate accounting information to users for decision-making purposes as well as a lot of implementation problems in the early stage of hospital financial accounting reform.