May 07, 2012
Reporting Practices and Ethics
Ethical standards and reporting practices are incorporated into the financial reporting and management of health care. Reporting financial data fairly and factually is quintessential to this. Responsible financial planning can prevent capital loss through investments, employees, and customers. Financial reporting offers assistance in calculating: amounts, cash flow, timing, and other data essential to organizational resources.
The Four Elements of Financial Management
Within financial management there are four fundamental elements to consider: planning, organizing, controlling, and decision-making. Planning includes a step-by-step process that influences decisions in revenue and organizational goals. Organizational management must intercede between personnel and the induction of financial planning. A financial manager is accountable for decisions made during the planning process. All information assembled and forecasted will aid in informed decisions and positive outcomes (Baker & Baker, 2011).
The accrual method is effective in purchasing or sales and is utilized by management in recording and recognizing these items.
The Four Financial Statements and Their Goals
Balance sheet. An organization must keep an accurate balance sheet by recording information daily with relevant information listing the assets of the organization.
Statement of revenue and expense. This information specifies a longer period of time. This information indicates a net profit or net loss of revenue within a fiscal time frame.
Statement of changes in fund balance/net worth. This statement indicates excesses of revenue over expenses and shows taxes as well.
Statement of cash flows. The statement is compilation of other statements and summarizes them into more accessible information indicating gains and losses.
Each statement is a vital part of the entire accounting process for the health
References: Baker, J.J., & Baker, R.W. (2011). Health care finance: Basic tools for nonfinancial managers (3rd ed.). Jones & Bartlett. Curtis, P & Roupas, T. (2009) Health care Finance, the performance of Public Hospitals and Financial Statement Analysis. European Research Studies, 12 (4), 199-212. Westerback, S. (1997). Fraudulant financial reporting. Pennsylvannia CPA Journal 68 (3), 21-25