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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 flow and cash position. The third principle is revenue, and recognition, which financial accountant’s uses to recognize debit and credits. The fourth principle is relevance, which is a process in accounting that makes a difference in a decision making because it provides relevant information on either predictive, or feedback, value or both. For example, when a hospital issue a financial

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