Reporting Practice and Ethics Paper
Working as a financial manager comes with a lot of responsibility; and a lot of standards of practice. Just like physicians and nurses, financial managers of health care organization have a set of rules and ethical guidelines they must follow in their practices. In this paper, I will explain what the four elements of financial management are. There will also be a summary of generally accepted accounting principles (GAAP) and financial ethical standards. Business’s mist follows these standards in order to comply with federal agencies such as the Financial Accounting Standard Board. I will also provide examples from articles that explain how corporations comply with these standards and deal with fraud or abuse.
Four elements of finance management, is the key to good financial management is to be well organized and have good finical discipline. Health care is a business and having a good concept of financial management will help those businesses run smoothly. “The healthcare industry is a service industry; its essential business is the delivery of healthcare services.”(Refaat, 2014) Having a good understanding of the elements of financial management can help to explain the financial management of that service industry.
The first element is planning; planning helps identify the steps that must be taken in order to accomplish the organizations objectives. The second is controlling, this is in place to help ensure that the financial manager makes sure that each organization is following the plan that has been established. The next element is organizing, just as its name suggests, this element helps the financial manager decide how to use resources of the organization to effectively carry out the plan in an organized manner. The last element is decision making, this element is for making choices and look towards available alternatives. Decision making relies on information, and the primary tasks are to analyze, evaluate and make informed choices.
Generally accepted accounting principles, also referred to as GAAP, the general rules, regulations and guidelines that are followed by accountants to ensure that their practice is legal and ethical. “It sets out the standard for managing accounts, preparing financial statements and accounting methods and techniques. GAAP are issued and governed by the Financial Accounting Standards Board (FASB).” (Financial Dictionary, 2014) There are principles that are followed to ensure that the practice is fair and ethical, some of these practices include topics such as regularity, consistency, sincerity, Permanence of methods, prudence, continuity, and full disclosure. In order to maintain a positive reputation, accountant must also follow ethical standards as well.
One of the more important ethical practices that must be upheld by financial professionals is competency. “To be competent, accountants and financial professionals must not only have secured education and practice that prepares them for their positions, but they must also continue their education by learning new information that can affect their practices.”(Morley, 2014) Another ethical standard that should be practices by financial professionals is confidentially; just as healthcare professionals must maintain patient confidentiality, so must healthcare financial managers. “Ethical standards require financial professionals to keep that information private except when ordered to disclose it by a court of law.”(Morley, 2014)
In an article from healthcare finance news written by Jody Hatcher, he explains how ethics and integrity need to be in focus and is expected from all companies, especially healthcare organizations. He explains how maintaining ethical practices...
References: Financial Dictionary. (2014). Generally Accepted Accounting Practices (GAAP). Retrieved from http://www.financialdictionary.net/define
Hatcher, J. (2012). Bringing ethics and integrity into focus. Retrieved from http://www.healthcarefinancenews.com/news/bringing-ethics-and-integrity-focus
Makar, S. (1996, Dec). Ethical financial reporting for continued self-regulation. Ohio CPA Journal , 55(4), 69-70.
Morley, M. (2014). Accounting Principles & General Financial Ethical Standards. Retrieved from http://smallbusiness.chron.com/accounting-principles-general-financial-ethical-standards
Refaat, M. (2014). Financial Management of Healthcare. Retrieved from http://healthcaremanagementhelp.com/public/departments
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