October 24, 2011
Reporting Practices and Ethics
Financial management is a fundamental part to successful healthcare financial planning.
Financial decisions are a necessary part of the day to day operations of any type or sized health care facility. These decisions are made in accordance with the facilities fiscal objectives and accounting practices. It is important that the individuals making these decisions follow proper reporting and ethical practices since these decisions affect the future of the entire facility. In order to make financial decisions it is important to understand generally accepted accounting principles, corporate compliance, ethics, fraud and abuse.
Generally accepted accounting principles are guidelines, objectives and conventions that have been set up over time to dictate how financial statements are prepared and presented (FASAB, 2010). The GAAP includes standards, conventions and the rules in which the facilities accounting department follow when summarizing reports and preparing financial statements (Baker & Baker, 2011). Third parties that use these financial reports must then rely on the information to be free from all prejudice and discrepancy without debate. If the information is false then the GAAP standards were not followed and the facility is not in compliance, therefore behaving unethically (All Business, 2011). Facilities have a moral and ethical obligation to comply with GAAP in an effort to prevent outside auditors from having difficulties when examining the facilities financial reports.
Currently healthcare facilities private, public, for-profit and not-for-profit use the generally accepted accounting practices to report their financial information. However, compliance is very difficult because accounts and reporting requirements change frequently. PricewaterhouseCoopers International Limited (2010-2011) states that... [continues]
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