Carrie "Shellie" Cobbs
Health Care Financial Accounting
October 27, 2013
Health Care Reporting Practices and Ethics
Financial management in health care is a major role for an organization. The success of an organization depends on the financial reporting practices and the ethical standards incorporated by the institution. Understanding the four elements of financial planning, generally accepted accounting practices (GAAP), and how to practice financial ethical standards to ensure accurate and fair reporting is the responsibility of the health care organization. Holding employees and management to a standard of working within these acceptable guidelines to avoid fraudulent …show more content…
As defined by the Business Dictionary, financial management is “The planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization ("Business Dictionary," 2013, p. 1). These four steps are also outlined in Health Care Finance: Basic Tools for Nonfinancial Managers as the “recognized elements of financial management: (1) planning, (2) controlling, (3) organizing and directing, and (4) decision making” (Baker & Baker, 2011, p. 5). These four steps are the accepted steps in the finance arena. Planning is the first step in financial management. Planning occurs at the beginning of the financial management process to identify the goals and objectives that the health care organization requires fulfilled. Financial managers require careful planning when beginning a project to contain costs and to reach the final objective. The second step in financial management is control. Controlling happens when the staff fulfills the objectives to achieve the guidelines set forth by financial management. The third step in financial management is organizing and directing. Organizing allows financial management to decide how to use the resources from the health care organization in the most effective ways to gain the financial benefit desired by the health care organization. Directing allows financial management the ability to follow through the entire four-step process …show more content…
Adhering to the regulations set forth in the generally acceptable accounting principles and the general financial ethical standards aim to make the accounting professional responsible for their accounting practices. There are many situations, in which the allure of money, it seems easy to collect from the leaking accounts of a health care organization, has won over the ethical thoughts of a financial manager. The financial manager should have the best intentions toward the health care organization to help stop the flow of bad accounting practices and to retain the revenue for the use of the health care organization.