March 21, 2011
HCS/ Healthcare Financial Accounting
Todd A. Brown
Reporting Practices and Ethics
Crime and corruption is unfortunately a reality and financial management is not an exception. Unfortunately there are people out there that do not adhere to the general accepted accounting principles or ethical standards. When not following the standards theft, embezzlement, and fraud occur. Financial managers of an organization need to follow the four basic elements of financial management in order to prevent unethical behavior from occurring as well as making sure the organization reaches maximum financial success.
Depending on the purpose of each task there are four basic elements of financial management. These basic elements are: planning, controlling, organizing and directing, and decision making. Planning consists of identifying the organization’s objectives and the steps that need to be taken to achieve the objective. Planning could also be described as identifying the problem and what needs to be done to fix the problem. The controlling step includes making sure the plans established in the planning step are being followed through with throughout the organization. Managers often accomplish this task by reviewing reports from before and after the plan was put into effect to see the areas of the organization that are not being effective with the new plan and show management which areas need extra attention. When in the organizing and directing stage of financial management, management needs to make sure all of the organization’s resources are being properly utilized to the fullest extent. Daily review of the efficiency of the organization’s resource use will ensure maximum efficiency when the plan is finalized. The decision making stage should actually be happening throughout the financial management process. Management needs to be able to evaluate and analyze each bit of information in order to make informed
References: Baker, J. J., & Baker, R. W. (2009). Health care finance: Basic tools for nonfinancial managers (3rd ed.) Potter, M. (2010, January 11). Battling the Medicare Fraud 'Epidemic". NBC News. Retrieved from http://fieldnotes.msnbc.msn.com/_news/2010/01/11/4377390-battling-the-medicare-