Mr McArtney says he heard someone yelling "Stop!", before he stopped and turned around to see a police dog running straight at him.
He put his hands in the air, only to have it latch on to his left leg.
"He says that the police officer did not reach him for another 30 seconds, during which time he was yelling for someone to get the dog off him, and that he had only 'wanted a p***'," the IPCA report says.
Mr McArtney received multiple wounds on his lower left leg and thigh which required 16 stitches.
Officer A, however, tells a different version of events.
He says that while he was running towards Mr McArtney with his police dog, he yelled a challenge: "This is the police, I have a dog, stop or I will let the dog go!"
Officer A says that Mr McArtney ignored the challenge and continued to hurry away from him.
He then decided that it was necessary to prevent the "burglar" from escaping.
When he was approximately 40 metres away, he released his dog with the command 'rouse'.
In releasing the report, IPCA chairman Judge Sir David Carruthers said it was a "regrettable incident".
"The authority acknowledges that this incident was traumatic for Mr McArtney, his friends and family and has caused him on-going discomfort and inconvenience," Sir David said.
But the officer was cleared of any wrongdoing by the IPCA who said his actions were "reasonable in the circumstances" and "the only tactical option available to the officer in the circumstances".
"Although the authority found the officer had control over his dog at all times during the incident the Authority recognises the regrettable nature of the injuries sustained by Mr McArtney as a result," Sir David said.
