...SaintLouis HCS/457 November 30, 2009 Victoria Odom Abstract A healthcare organization is one of the most successful business inside of a healthcare organization theres so many different profession within, from healthcare providers such as physician, nurses ,Medical assistants and so many more. .A healthcare organization also provide care, , consistency, and support.In addition to care being providing in health care Financial management is another important assets in healthcare organization. With todays econmy crisis healthcare organization face many financial issues for example, Decreasing revenues, increasing costs and terminating healthcare workers .Being a Mananager,Administrator in a healthcare organization is not a easy job because they have to ready lead in today’s climate and also position their organizations for later financial issues and potential political changes. . In order to have an effective financial management, organization, many health care organizations use the Generally Accepted Accounting Principles, corporate compliance, and the value of ethics. Accounting Principles and Ethics Articles A healthcare organization is one of the most successful business inside of a healthcare organization theres so many different profession within, from healthcare providers such as physician, nurses ,Medical assistants and so many more. .A healthcare organization also provide care, , consistency, and support.In addition to care being providing...
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...financial statements of health care organizations’ were fairly easy to compare. Historically, members of the healthcare community had applied similar sets of accounting rules without regard to their business structure. This meant that whether an organization was a for-profit, nonprofit, or a government owned, every healthcare entity was considered to be in the same industry and the accounting procedures they were forced to follow were similar, thus increasing the level of comparability between organizations. However, today’s standard setting environment requires these similar organizations to apply different sets of accounting standards based of their business model. Resulting in similar transactions being accounted for differently and reducing the level of comparability between financial statements. This has led to the need and implementations of Generally Accepted Accounting Principles. Generally Accepted Accounting Principles, or GAAP, are a framework of accounting standards, rules and procedures defined by the professional accounting industry, which have been adopted by nearly all publicly traded companies in the United States, and allow for the recording and reporting of financial information in a uniform manner (Investing Answers, 2015). The benefit to companies using GAAP is that it makes it easier to compare the financial statements of different companies. GAAP aids in health care to establish the creditworthiness of the business or organization and earn a rating of financial...
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...Paper Generally accepted accounting principles (GAAP) represent the general rules, standards, and practices that are used in accounting. GAAP are required for businesses when reporting financial records. When preparing financial statements, a company’s accountant is mandated to use these principles before they issue these statements to investors and other entities outside of the business. The objective for these standards are to assist in ensuring that ethical accounting practices occur wherein investors and creditors have the confidence that companies are truthfully reporting their financial solvency. In summary, the GAAP are responsible for ensuring that companies ethically record measurements at regular business intervals, prepare and summarize economic information in accordance to ethical standards, accurately measure economic activity, and truthfully disclose information about economic activity. Corporate compliance, ethics, or fraud and abuse Medical fraud and abuse in the healthcare industry is a rampant occurrence that significantly impacts not only healthcare in America but also the entire economy. Fraud and abuse within the healthcare industry can account for approximately 15 percent of annual expenditures. This represents up to $170 billion annually being lost because of fraud and abuse in the healthcare industry. Although the federal government has consistently passed legislation to fight against healthcare fraud, and committed millions of dollars toward preventing...
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...INTRODUCTION Generally accepted accounting principles (GAAP) are procedures, standards and accounting principles that an organization uses to complete financial statements. It is important for nurses seeking roles in the position management to understand the financial concepts and include themselves in the process of creating the organizational budget. This paper will describe the GAAP as related to healthcare and the intention of each principal. Within the healthcare setting financial statements must be audited by CPAs which makes GAAP relevant in healthcare. The most important GAAP concepts are: 1. Entity concept 2. Going-concern concept 3. Matching principle and cash versus accrual accounting 4. Cost principal 5. Objective evidence 6. Materiality 7. Consistency 8. Full disclosure Entity Concept The entity concept is the organization or person that is the focus of the financial statements. As it relates to health care a large healthcare organization that includes a university, hospital, research lab and outpatient center would be considered an entity. When preparing financial statements each building itself would be seen as an entity to ensure for accounting purposes the accounts payable and accounts receivables are accurate per entity. As the chief financial officer, this one option short that each entity remains within their budget. Going-concern concept The second goal of GAAP is that going-concern concept. This concept evaluates...
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...stabilit y and support. A healthcare facility is a place where patients have a desire to feel and see the unison and togetherness within the organization. Most health care organizations requires that the organization be consistent, and is mainly on one accord because of its needs on their patients and to supply the best care for different groups of people. A health care organization also needs a solid organizational financial management background. If the organizations processes the right financial management it let’s the people know that there is strength in the organization and it gives all who seek care a positive attitude. In order for a healthcare organization to have the right kind of financial management, reliability, and stability , there are some procedure that must be followed most use the Generally Accepted Accounting Principles, corporate compliance, and the value of ethics. When discussing General Accepted Accounting Principles (GAAP) it is describe as a set of accounting standards that are approved by many companies. GAAP principles are put together by a group that’s known as the Financial Accounting Standards Board. These rules and or principles are used to control the financial accounting of public companies. They are important for many reasons. The GAAP principles are very important to companies and for "those whose stock trades on the stock exchanges" (Raithel, 2005). The GAAP standards informs allows healthcare investors to know about...
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...The four key elements to being a successful healthcare financial manager are “planning, organizing and directing, controlling, and decision making.” (Baker & Baker, 2011) “Getting money in” represents the inflow (revenues), whereas “getting money out” (expenses) represents the outflow.” (Baker & Baker, 2011) Good financial managers are able to adjust inflow and outflow that will make the organization successful in achieving its financial goals and objectives. Healthcare planning gives a step-by-step breakdown of what objectives the organization is working towards. Controlling allows financial managers to ensure that each department within the organization is accomplishing the objectives that have been set forth company-wide. Organizing and directing allows financial managers to make effective decisions on how to carry out plans that have already been established within the organization. Financial managers must direct on a daily basis to make sure the organization runs smoothly and provide supervision and guidance where needed. Decision making gives financial managers room to make choices on various alternatives presented to them. All decisions are based on information and analysis provided, and this information provides the tools for financial managers to make informed decisions concerning the organizations strategic financial planning. Generally Accepted Accounting Principles (GAAP), provide guidelines that help organization’s record business transactions. These principles...
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...Generally Accepted Accounting Principles in Healthcare April Dierickx HSC/571 June 10, 2013 Tamica Lewis Generally Accepted Accounting Principles in Healthcare Generally Accepted Accounting Principles (GAAP) are the accounting standards used in the United States that provide an outlet for organization to record and report their financial information in a standardized manner (Richards, n.d.). This has proven to be of particular importance in the healthcare arena where many areas of finances can be ambiguous or gray. Additionally, the principles guide the reporting systems to prove or disprove the financial viability of the organization. This again is important in the healthcare industry related to achieving the goal of providing quality care to patients (Cleverly, Song, & Cleverly, 2011). GAAP focuses on five different principles of accounting. Accounting entity, money measurement, duality, cost valuation, and stable monetary unit are the five principles discussed in the following paragraphs. Principle definition and the relationship they have to the healthcare industry will be identified and correlated to healthcare practices. Accounting Entity Cleverly, Song, & Cleverly (2011), define an accounting entity as the organization for which financial statements are being formed. They discuss the difference between entities such as sole proprietorship, incorporations, and affiliations with government agencies and universities. The clear definition does not include...
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...how to maintain confidentiality with private sensitive information. This aspect of financial management also prevents breaching the elements defined in HIPPA. Planning is essential because by the very nature of healthcare it is important to plan for those times when payments from insurance and government agencies are received and times when payments may not be as forthcoming. Also as healthcare is an ever changing industry it is important to plan for those changes. Organizing is integral to healthcare in order to maintain or reduce costs and give the best service to patients and others who are relying on results from the organization in order to perform their jobs. Decision making is the backbone of any organization but particularly healthcare. Ideas and changes must be weighed, for example what EHR program to choose, how to implement any changes and how to enforce regulations which must be followed in the healthcare industries. Without these four important components financial management would not be possible. Along with the four components mentioned above there are other financial guidelines which must be followed to have a sound healthcare organization. These guidelines are known as “Generally Accepted Accounting Principles or GAAP”. In addition to GAAP there are...
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...Accounting Principles and Healthcare University of Phoenix Online December 23, 2013 Generally Accepted Accounting Principles and Healthcare Accounting measures allow the public, those granting credit and investors, the opportunity to review a business’s financial performance through the review of financial statements. The financial market is grounded on the truthfulness of financial statements that allow investors to estimate the value of securities. The usage of generally accepted accounting principles (GAAP) is part of an organized and regulated method for financially educated professionals to create financial statements. GAAP outlines in detail the components necessary for large and small businesses to disclose their financial performance as accurate as possible to avoid bias (Federal Accounting Standards Advisory Board, 2013). GAAP addresses the wide range of accounting practices down to the small and specialized business. Accounting Principles “Generally accepted accounting principles (GAAP) are rules established by the Federal Accounting Standards Advisory Board (FASAB)” (Finkler, Kovner, & Jones, 2007, p.104). The development of accounting principles became emergently necessary because of the trend of major financial disasters. The stock market crash and demise of Enron were a result of faulty and deceptive accounting practices which failed to disclose the true state of the organizations. Events like these precipitated the need for GAAP. GAAP is commonly used for...
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...Generally Accepted Accounting Principles in Healthcare HCS/571 May 30, 2011 Generally Acceptable Accounting Principles in Healthcare Generally Accepted Accounting Principles (GAAP) are used to regulate the process of financial accounting and the preparation of financial statements for organizations. GAAP are essentially a set of rules, established by the Financial Accounting Standards Board, that provide a framework for formalized accounting systems that keep track of the financial health and well-being of organizations such as private and publicly traded firms, non-profit organizations and not-for-profits such as healthcare organizations (Finkler, Kovner, & Jones, 2007). GAAP are comprised of a group of requirements and rules, used to prepare the four primary statements used in financial accounting: balance sheets, statements of operation, statements of cash flow, and statements of changes in net assets (Cleverly, Song, & Cleverly, 2011). These statements help organizations to report on their overall financial health and ability to exist as a viable financial entity. There are a number of basic financial principles that make up GAAP. These include: • Entity concept • Going-concern concept • Matching principle and cash vs. accrual accounting • Cost principle • Objective evidence • Materiality • Consistency • Full disclosure Entity Concept According to Cleverly, Song, & Cleverly...
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...Reporting Practices and Ethics Megan HCS/405 30 June, 2014 Reporting Practices and Ethics The accounting staff is a very large part of the healthcare industry. Accounting staff code and bill products and different services that are offered at that location and maintaining an ethical culture is imperative. There are accounting principles and standards and procedures that are part of the General Accepted Accounting Principles (GAAP). The GAAP principles have four key elements: Planning, Controlling, Organizing and Directing and Decision Making. Ethical Components and GAAP Accounting is the backbone of any medical organization because of it enormous impact on running as a cost effective organization. Every organization runs on its own set of principles and goals, but most are certainly guided by different federal, state, and government laws. There are accounting principles and standards and procedures that are part of the General Accepted Accounting Principles (GAAP). The GAAP principles have four key elements: Planning, Controlling, Organizing and Directing and Decision Making. The GAAP principle of Planning includes ways of setting goals and guidelines for the future of the organization. The principle of Controlling involves ensuring that planned goals are on track with previous goals and also that there is room to fix any issues that may arise. Organization and directing is to make sure that the organizations full potential is being provided...
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...Reporting Practices and Ethics Jennifer Randall HCS/405 November 15, 2011 St. John Sturton, MBA, CMRP Reporting Practices and Ethics Hospitals and evolving healthcare organizations face an intimidating financial situation in today’s healthcare atmosphere. “Decreasing revenues, increasing costs, and high consumer expectations present a complex challenge for healthcare administrators and medical directors who must not only manage in today’s climate, but also position their organizations for tomorrow’s storms” (Gale Group, 2004, p. 2). This paper will summarize the four elements of financial management; summarize generally accepted accounting principles and general financial ethical standards; and provide examples from articles that reflect ethical standards of conduct and financial reporting practices. Four Financial Management Elements Planning, controlling, organizing and directing, and decision making are the four elements of financial management. The purpose of planning is for the financial manager to identify the objectives and identify the steps required to achieve those objectives. The purpose of controlling is for the financial manager to review and compare current reports against previous data to ensure the plans, set by the organization, are being followed properly and efficiently. The purpose of organizing and directing is for the financial manager to ensure effective resource use and provide daily supervision. Lastly, the purpose of decision...
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...important because majority of the time the data contains information about the organization’s equity and economic resources. Developing and analyzing ethical standards carefully allows organizations to stay in compliance with those standards formed for the health care community. Poor ethics and financial planning sometimes effects consumers. According to Nelson (2011), “Basic ethics principles that make up our common morality, including respect for patients, acting in patients’ best interest, avoid bringing harm to patients and treating patients in a fair and equitable manner, serve as the foundation for healthcare values.” This paper will contain a summary of the four elements associated with financial management, generally accepted accounting principles, and general financial ethical standards. The reader will explore Examples from two articles “Ethical Decision making for healthcare Executives” and “Ethics: A foundation for quality” that reflect ethical standards of conduct, financial reporting practices, and the significance of each example. Four elements of financial Management The four elements of financial management are planning, controlling, organizing/directing, and decision making. Planning is the methodical manner in which decisions are made according to the goals of an organization both short and long term. Management must supervise and monitor each...
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...Sep 2014 Working as a financial manager comes with a lot of responsibility; and a lot of standards of practice. Just like physicians and nurses, financial managers of health care organization have a set of rules and ethical guidelines they must follow in their practices. In this paper, I will what the four elements of financial management are. There will also be a summary of generally accepted accounting principles (GAAP) and financial ethical standards. Business’s mist follow these standards in order to comply with federal agencies such as the Financial Accounting Standard Board. I will also provide examples from articles that explain how corporations comply with these standards and deal with fraud or abuse. The four elements of financial management. The key to good financial management is to be well organized and have good finical discipline. Health care is a business and having a good concept of financial management will help those businesses run smoothly. “The healthcare industry is a service industry, its essential business is the delivery of healthcare services.”(Refaat, 2014) Having a good understanding of the elements of financial management can help to explain the financial management of that service industry. The first element is planning, planning helps identify the steps that must be taken in order to accomplish the organizations objectives. The second is controlling, this is in place to help ensure that the financial manager makes sure that each organization...
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...Reporting Practices and Ethics Paper HCS/405 November 30, 2014 Financial management in health care today like any other business should be conducted ethically, professional and accurately. The four elements of financial management need to be used and put into place to help ensure the financial stability and success of the organizations will be accomplished year after year. Generally, the same accounting principles and general financial ethical standards are practiced in every health care organization and these principles need to be implemented correctly if the organization wishes to be successful. Organizations need to keep up a certain level of transparency and this can only be accomplished by accurately reporting their financial statements. Several articles are going to be discussed reflecting the reporting practices and ethical standards in health care after a brief summary of the general accounting principles, ethical standards of finance and the four elements of financial management are given. Summary: Four elements of financial management The four elements of financial management are planning, controlling, organizing and directing and decision making. (Baker & Baker, 2011, p. 5) Each element is a task that is performed by the finance manager and they go in the order mentioned above. Like in any other aspect of business, planning has to be done to help identify the objectives that need to be accomplished and establish the steps necessary to ensure that each...
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