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Reporting Practices and Ethical Standards

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Reporting Practices and Ethics Paper
Financial reporting and the ethical standards that coincide are important aspects of any health care organization. Health care facilities must report financial statements accurately and fairly. Reported financial data has a huge impact on stakeholders such as investors, patients, vendors, and employees. Health care finance managers should be well versed in the four elements of financial management, generally accepted accounting principles (GAAP), and ethical financial standards to ensure acceptable financial practices as well as the sustainability of the organization.
Four Elements of Financial Management
During the planning process, a financial manager uses the organization’s objectives to develop a systematic process by which the objectives will be met. In order for health care facilities to be successful, there is a large amount of planning involved. Of particular concern is healthcare reform. A health care facility has to plan for compliance issues that will directly affect their bottom line. This includes risk management, new information systems, or the purchase of new equipment. Controlling ensures each department within the health care facility is following prudent financial decisions that have already been set and planned. One example of controlling expenses is to approve or deny capital expenditures. Capital expenditures more often than not increase the organization’s assets. Capital expenditures are also usually included in a budget. When controlling, the financial manager must ascertain if the capital expenditure complies with budget and will increase the organization’s assets. When financial managers are organizing and directing, they are deciding how to use the facility’s finances, equipment, and human resources to meet short- and long-terms goals. One way a financial manager organizes resources is…...

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