...Health Care Financial Accounting Simulation Kanisha Wilson HCS/405 October 20, 2013 Adrian Parker Health Care Financial Accounting Simulation Health care organizations are cutting back on expenses in order to continue to provide quality health care to the community. Cutting back can cause layoffs, the number of patients that who are treated in the health care facility, and how funds are used to keep the organization running. The Elijah Heart Center, located in New York is to have financial difficulties maintaining its hospital’s 140- bed cardiac care unit. I have been selected by the Consulting Firm of Huber and Guizot as the senior consultant to help develop and implement a turnaround strategy. Decisions made during the simulation will be discussed to help Elijah Heart Center on their financial situation. In the simulation reducing agency staff and changing the skill mix were chosen as cost –cutting options. “Whether you as a manager must either review or prepare required data, your responsibility is to recall and apply the elements of consistency, because such data will typically be used for decision making” (Baker & Baker, 2011 p. 152). Reducing agency staff was chosen because by reducing the number of agency staff would help reduce cost by saving money on premiums and contract fees paid to the staff. Changing the skill mix was chosen because it allows the health care organization to hire unlicensed assistants to help the nursing to focus on more important...
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...Financial Statements Review Financial Statements Review The following paper will address the Patton-Fuller Community Hospitals financial statements including the differences between the audited and unaudited financial statements, the effect that revenue sources had on the financial reporting for the hospital and how the hospitals revenue and expenses were grouped for planning and control. When organizations report unaudited financials it is important to realize there may be changes in the audited financial reporting that may occur after an independent review by an outside accounting firm. Additionally it is also important to realize the effect revenue sources can have on financial reporting and the importance of grouping revenue and expenses when implementing internal financial planning and controls. All of the financial information discussed in this paper is important from a financial accounting perspective for external decision makers can evaluate how well the organization has achieved their goals, as well as, a management accounting perspective to provide internal decision makers with financial information to make operational decisions to help them achieve their goals. How Did the Audited and Unaudited Financial Statements Differ? - Stormie There are two types of financial statements, unaudited financial statements are financial statements that are generated based the financial information that has been provided to certified public accountants based on the accuracy of...
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...| Week 4 Individual Assignment | Simulation Review Paper | | By: Kayte Zbikowski | 7/21/2011 | HCS/405 Health Care Financial Accounting Teacher: Mike Shin | My strategy will consist of three phases. These phases include: capital shortage, funding options for equipment acquisition and funding options for capital expansion. During these three phases I will observe the necessary financial statements and documents. From this information I will analyze the information and decide the best strategy for improvements. I will not only focus on the goals for the clinic, but long term budget goals as well. Phase I: Capital Shortage There were two options that I chose to cut costs. The two options that I chose was to reduce agency staff and changing the skill mix. I chose to reduce agency staff because “Reducing proportion of contract labor used to fill vacancies among patient care workers would reduce costs, staffing nursing units and other patient care areas. The salaries of agency contracted people are twice that of the other hospital staff. Reducing these personnel will tremendously cut down costs. Bridging a working capital shortage is one of the strategies that can help increase the hospital’s revenue if a true concrete plan can be formulated. (University of Phoenix, 2011). I chose changing the skill mix because “Changing the skill mix by hiring unlicensed assistive personnel will offer an effective means of addressing economic realities. This option...
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...Although finance and accounting are both involved with the financial aspect of a business or organization, the managers and employees in these departments deal with finances in completely different ways. Accounting deals mainly with preparing and examining financial records and ensuring their accuracy, making sure taxes are paid on time and properly, and assessing financial operations to help ensure that organizations run efficiently. On the other hand, finance deals primarily with making important financial decisions for an organization and helping “develop strategies and plans for the long-term financial goals of an organization” (Financial Managers 2012). It is also important to note that financial managers use the financial information prepared by the accounting department in order to make the best decision possible for their organization. Nevertheless, both accountants and financial managers together must operate effectively and efficiently to ensure the continued short-term and long-term financial viability of any health care organization. In this short essay I will explain the relationship between finance and accounting and how they both help ensure the financial viability of a health care organization. First, despite the fact that finance and accounting both oversee the financial aspect of a health care organization, the way in which they handle finances are very different from one another. “Accounting is concerned with financial record keeping, the production of periodic...
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...Generally Accepted Accounting Principles Tonya Krell Phoenix Generally Accepted Accounting Principles Accounting standards that record and report financial information in a consistent manner is known as Generally Accepted Accounting Principles (GAAP). There are four primary financial statements in which GAAP is used to guide the rules and requirements. The financial statements include a balance sheet, statement of operations, statement of cash flow, and statement of changes in net assets (Cleverley, Song, & Cleverley, 2011). Professionals, to prepare financial documents based on a common standard, implement the principle. GAAP is beneficial to companies as it alleviates the difficulties of comparing a company’s financial statements, establishes creditworthiness of a company, and provides financial strength ("How does GAAP aid in health care," n.d.) GAAP is reinforced by eight accounting concepts. The concepts are as follows: (a) Entity concept, (b) Going-concern concept, (c) Matching principle, (d) Cost principle, (e) objective evidence, (f) Materiality, (g) Consistency, and (h) Full disclosure (Finkler, Jones, & Kovner, 2012). This paper provides a description of each concept and how the concept relates to health care. In accounting there must be an entity that is used to prepare financial statements such as balance sheets for the health care organization. This can include the organization as a whole but typically is broken down into units or departments. Identifying...
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...Financial Accounting Systems Tracy Pankey HCS/571 August 20, 2012 Professor Debra Vaughn Financial Accounting Systems The profession of nursing has enveloped itself into the development of gaining the skill and knowledge of health care financial systems within the health care arena. With government regulations and measures needed to improve the health care reform, it is expected that all members of the health care organization become actively involved in terms of the aspect of financial accounting. Accounting information is useful in determining organizational performances both in the past and is a great predictor in terms of future financial viability. The purpose of this paper is to explain generally accepted accounting principles (GAAP), describe each principle, its intent, and how it relates to health care. In an effort for health care organizations to maintain financial soundness, the preparation of financial statements is a key factor in terms of identifying and correcting accounting errors. A popular accounting method used among many organizations and firms is the generally accepted accounting principles (GAAP). For example, Finkler, Kovner, & Jones (2007) stated “GAAP are rules established by the Financial Accounting Standards Board (FASB). Certified public accountants (CPA) are experienced in accounting and the performance of audits. CPA’s examine financial records, seek to identify errors found in the financial documents, evaluate the organization’s...
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...In recent years financial accounting and reporting in the United States health care organization has revolved. Currently health care organizations that includes public and private, for profits and non for profits adhere to generally accepted accounting principles. The generally accepted accounting principles are a mixture of respected criteria that govern the field of accounting, which consist of rules that accountants must comply by. In this paper first it is going to explain the principles of accounting. Next, give an aspect to the value and important of corporate compliance when using generally accepted accounting principles. In addition, address the importance of cooperate compliance and its relationship with ethics, fraud, and abuse The general accepted accounting principles (GAAP) is a set of accounting principles, standards, and procedures that health care organizations uses to compile financial statements. The general accepted accounting principles also steers health care organizations in recording business transaction. However, general accepted accounting principles are not rules, but are six sets of principles for a health care organization to follow for recording. .The first principle is economic entity, which allows accountants to keep the sole proprietors business transaction separate from the owner’s personal transactions. The second principle is accrual basis, which is a method of book keeping that accountant uses to record financial events on the bases of cash...
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...things. Health care makes up one sixth of the U.S. GDP it is the largest source of the nation's public expenditures. With large amounts of revenue going in and out of hospitals and facilities and health care reform accounting can be challenging. To help ensure fair and accurate financial reporting, there are practices and ethical standards that must be followed when accounting for finances in health care. This paper will provide the four elements of financial management and standard accounting principles and ethics. Financial Reporting Practices The Financial Accounting Standards Board was established in 1073. It is the designated organization in the private sector that establishes standards of financial accounting for nongovernmental entities. The standards established are officially recognized as authoritative by the SEC and the American Institute of Certified Public Accountants. The FASB also has accounting standards for health care entities. "The AICPA Health Care Expert Panel developed technical guidance on the application in consolidated financial statements of a recent accounting standards update for health care entities" (Financial Reporting, 2012, para 2). In May 2012, the FASB decided to revisit the question of whether management should assess whether there is doubt about an entity's ability to continue. According to Financial Reporting (2012), "The decision can as a result of FASB's recent decision not to pursue going-concern-type disclosures." Accounting and reporting...
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...Financial management is very essential for health care organization’s to succeed and accomplish goals. As a financial management has a major aspect on how it incorporates the ethical standards and proper reporting practices. To report practices and ethical standards in health care finance assist financial managers in conducting. They conduct effect analysis of the organization’s revenues, expenses, assets, and much more. In the next few paragraphs in the paper will be discussed is the four elements of financial management, the accepted accounting principles, and a few general financial, ethical standards will conduct. Plus, there would be examples of conduct and financial reporting practices in the health care organizations from other articles that will be discussed. The four elements of financial management are planning, controlling, organizing and directing, and decision making. The first element, planning is to set up the health care organization goals and objectives. Then to see what steps have to take and which steps would be more effective to achieve the goal. The second element is controlling; as a financial management will need to consist of verifying whether the department is following the plans, instructions issued, and the principles established. The third element is organizing and directing; which this can be a process that follows planning and controlling element in the health care organizations. While organizing established how resources can be effective...
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...with financial reporting. In health care today organizations must use ethical and financial practices that are superb to guarantee a successful organization. In today’s health care, finance is very important allowing for a successful organization. In the health care industry like any other business those in the health care industry must adopt a standard for ethical and financial practices to help increase the value of the organization. Having high financial standards and ethical values this helps to improve the consumer confidence of all that utilize the services of that particular organization. When individuals are looking for health care they will not utilize an organization that is known for having a high death rate, but rather one where the death rate is low. The health care industry is one of the toughest industries within the United States. Those who work in the health care industry are responsible for the decisions that pertain to a person’s life and how the money within the organization will be spent. They are also responsible for the cost of medical services utilized within the community. A declining economy has helped to make the health care environment at times difficult and challenging for patients, physicians, policymakers, and society. It is important that health care organizations have a code of ethics to ensure that all departments are doing what is expected of them and also that those in the finance department are following the highest standards of financial and...
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...Generally Accepted Accounting Principles Introduction In the past, the 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...
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...Determining Financial Viability The relationship between finance and accounting are very similar but they definitely have their differences. “Accounting and finance are the methodical or precise recording, reporting, and assessment of financial deals and transactions of a business. Accounting is an essential part of finance. Accounting produces information about the operations of a business. The end-product of accounting is composed of financial declarations such as balance sheets, income declarations which include the profit and loss accounts, and the declaration of changes in financial position which includes sources and uses of funds declaration” (Difference Between Accounting and Finance). Accounting and finance both need each other. A company needs both. To determine financial viability within a heath care organization, they need a functioning finance and accounting departments. In a health care organization, there needs to be a high functioning finance department. There needs to be an innovative way to run a health care facility. “The current economic situation, together with the uncertainty of healthcare reform, has fueled the demand for efficient and effective facilities” (Elting, D. 2009). Financial departments have to run an efficient department to assure that they are not faced with high debts that could cause a healthcare to shut down. With all of the changes occurring in healthcare there needs to be a financial team that can try and run a...
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... Reporting and Ethical Practices Financial and accounting professionals must follow the ethical standards that regulate the type of business they conduct, who they conduct business with, and how they use their skills to conduct their business. These ethical standards are defined by professional finance organizations and the Financial Accounting Standards Board. This article will discuss reporting and ethical practices for any financial and accounting organization. It will include a summary of generally acceptable accounting principles and general financial ethical standards, as well as, summarize the four elements of financial management. This article will conclude by discussing researched articles on financial reporting practices, ethical standards, and financial management within the health care organization. Generally Accepted Accounting Principles (GAAP) and Financial Ethical Standards According to "Business News Daily" (2014), “Generally Accepted Accounting Principles (GAAP) is a combination of guidelines, comprehensive rules, and generally accepted standard practices utilized throughout the accounting industry to prepare and standardize financial statements, such as balance sheets, income statements, and cash flow statements” (Generally Accepted Accounting Principles (GAAP): Standards & Rules for Accountants). In 1999, the American Institute of Certified Public Accountants (AICPA) designated the Federal Accounting Standards Advisory Board (FASAB) as the...
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...Determining Financial Viability Accounting and finance are closely related to a certain extent in which both deal with the financial aspects of a company. Accounting and finance work together in creating “a company’s budget or working capital analysis” (Wise-Geek, 2012, p. 1). Accounting involves recording of an organizations operations of a business as well as showing the information in the outline profit and loss accounts, which demonstrates the gain or loss of the organizations throughout the year. In addition, accounting includes provisions of a balance sheet replicating the monetary positions of a business at a specific time period. It should provide clear and precise figures about the proprietary and financial condition in a specific entity. Finance is a wider view and uses information, which is obtainable in the accounting area such as “profit and loss, balance sheet, and cash flow statement” (Parikh, 2011, p. 1) to decide upon financially linked judgments, for instance how to increase funds for upcoming plans of a business. These statements provide a valuable amount of information for a company. The statistics retained in these statements assists financial directors with analyzing past performance as well as future inclinations of a business. Both accounting and finance must be used together to make effective decisions for a company therefore, finance uses past statistics from the accounting aspect to formulate future decisions. In order to determine financial viability...
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...Practices and ethical Standards in Health Care Finances University of Phoenix HCS 405 Health Care Financial Accounting July 11, 2012 Reporting Practices and Ethics The financial management of health care organizations have the obligation to integrate financial reporting practices with ethical standards that directly reflects and affects health care patients, providers, policymakers, and the society. This paper will review articles that reflect ethical standard practices related to health care financial management and will cover the four financial management elements crucial to the health care organization. These four elements of financial management are the generally accepted accounting principles (GAAP), which are the planning, controlling, organizing and directing, and the decision-making (Baker & Baker, 2011). Planning The financial manager determines the short term and long-term objectives of the organization to create plans to meet organization’s objectives. When planning, the goal of the financial manager is to develop and outline strategies, to seek the input of everyone involved in the process and to ensure everyone supports, and understands their role in the execution the plan. Controlling The purposes the financial officers of controlling are to implement the plans, and are executed by organizational standards to avoid overspending the organization’s budget. Additionally, the financial manager oversee that each area of...
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