Ethical standards in financial reporting are vital. Elements of financial management and Generally Accepted Accounting Principles have been set to guarantee that this takes place. Financial management entails ethical standards and reporting practices. Monetary managing is the supervision of a business or organization’s finances in order to reach financial goals. The main intention of financial management is to generate capital for the organization, produce a progressive cash flow, and deliver a suitable recurrence in funds.
This paper will discuss the four elements of financial management that are critical to any health care organization as well as the generally accepted accounting principles related to health care, and summarized articles associated with health care financial management. The four elements of financial management are planning, organizing and directing, controlling, and decision making. Every element is part of a role that the financial manager must take in order to ensure the success of the business. The planning portion of financial management is to recognize goals and classify the steps that are essential for achieving these goals.A financial manager recognizes the procedures that must be completed to achieve the organization’s goals.
The organizing and directing element of financial management makes sure current resources are used and provides daily supervision. The financial manager determines how the resources of the organization will be used in order to successfully carry out plans that have been established. The controlling element of financial management is to ensure procedures are being followed. Financial managers ensure all ranges of the hospital are following the procedures that have been recognized by cooperating with all managers inside the organization.Reviewing present reports and associating them with reports from the past can further assist managers with ensuring all areas of the organization are following the same plan (Baker & Baker, 2011). Numerous managerial agencies have been well-known to make every effort to produce an ethical and reliable standard in the financial practices.
These agencies are the United States Securities and Exchange Commission, the Financial Accounting Standard Board, and the Public Company Accountant Oversight Board.Various organizations use the Generally Accepted Accounting Principles structure also known as GAAP. United States Generally Accepted Accounting Principles are criterions that regulate how United States accountants conduct and format their reports. It is a must that all accounting records are observed by people outside the organization for transparency purposes. If business all across the world were to construct their own accounting reporting procedures, comparing financial statements would be ineffective, and it would make it easier to hide important information (Baker & Baker, 2011).Generally Accepted Accounting Principles are the actions and values that businesses use to accumulate financial reports and illustration how and where their money is being controlled.
GAAP is a combination of dependable principles created by the policy boards, which are old ways of summarizing and recording accounting data. Although the principles are not backed by law, the United States Securities and Exchange Commission (SEC) require businesses to use them in their financial reporting (Baker & Baker, 2011).Many professional organizations have said that competence is one of the main ethical standards a finance professional needs maintain. Financial professionals must have tenable education and practice that will prepare them for their job.
They must also continue education by taking in new data that may have a positive effect on their practices, and they must stay up-to-date with GAAP in order to be competent ("Accounting Tools", 2013). The Association for Accountants and Financial Professionals in Business forbids financial professionals from using patient’s information to gain unethical or illegal advantage.When working with a patient’s financial information, professionals will have admittance to an ample amount of personal information. Not only will they have access to financial information but they will also have access to employee’s names and contact information, as well as corporation’s names and locations.
Ethical standards require financial professionals to keep information secluded unless ordered by a court of law ("Accounting Tools", 2013). Three anesthesiologists at the Vanderbilt Medical Center in Nashville, Tennessee are claiming that the hospital has been methodically billing Medicare falsely for almost ten years.The former employees claim that Vanderbilt Medical Center encouraged them to schedule immediate compound operations at another location, and to bill Medicare requires physicians to be present for each operation at a teaching hospital. The Vanderbilt Medical Center also used their information management software to perform most of the fraudulent actions by using the remote access features to schedule other physicians to be in more than one place at one time ("Healthcare Finance News", 2013). An ethical foundation is needed in a healthcare setting possible more than any other environment.
This industry has the potential to affect the lives of patients. Patients and the members of their family want and deserve exceptional health care service, the latest medical technology, and most importantly safety. Even though Generally Accepted Accounting Principles provides very effective procedures that will correct abuse and cut down on the mismanagement of accounting systems and procedures, at the end of the day, the ethics and integrity of a caregiver is also a personal accountability.
