Michele R. Morris
December 18, 2010
Todd A. Brown
Reporting Practices and Ethics
Financial practices and ethical finance are important in the health care industry. Both are important to produce a successful health care organization. Here we will discuss the four elements of financial management, generally accepted accounting practices, and general financial ethics standards.
There are four elements of financial management (Baker &Baker, 2011). The first is planning. Financial planning is when one identifies the steps that need to be taken for an organization to reach its objectives. The second element is control. This means controlling each area of an organization, making sure there is a plan in place, and making sure that plan is being followed. The third element is organizing and directing. When organizing, one would decide how resources need to be used to be most effective. Directing allows one to know everything is running smoothly and effectively. The last element and probably the most important is decision making. The decision making process is used at every level of financial planning. Without decisions being made financial planning would be at a stand-still.
There are two types of generally accepted accounting practices (Baker &Baker, 2011). The first is financial accounting. Financial accounting is used by third party or people outside of an organization. For example, this type of financial reporting would be used for Medicare, Medicaid, Insurance companies, and stock-holders.
Next we have managerial accounting. Managerial accounting is used within an organization. This is generally used to track daily expenses and transactions. This information is important when trying to determine where a company stands financially (Baker &Baker, 2011). [continues]
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