Accounting Standards
Financial reporting practices and ethical standards in health care finance constitute the foundation of every successful organization. Healthcare organizations and other industries in the general market adopt Generally Accepted Accounting Principles (GAAP). The main objective behind this is to boost the organization's value by maintaining the integrity within and to leverage public trust. This paper summarizes the elements of financial management, GAAP and ethical standards in healthcare finance.
Elements of Financial Management
Financial management as a holistic process constitutes of four recognized elements: controlling, planning, organizing and directing, and decision-making (Baker & Baker, 2011). The formulation of the four elements was mainly through consideration of the purpose behind each task. This paper discusses the four elements in detail.
Planning is a crucial division of financial managements. Every organization sets objectives to guide their performance, meeting such objectives require the company's financial manager to take stepwise procedures. The manager of financial operations within the organization pinpoints the procedures that must be followed in pursuit of achieving such targets. Planning plays, the capital role in identifying the organization's business objectives and the steps needed to accomplish the objectives.
Organizations formulate plans and objectives, which regularly need management. The element of controlling drives the financial manager to ensure that each plan runs as stipulated by the organization, for the organization's operations. An example of control method is the comparison of current and previous reports. This process highlights the areas that the company or organization may need upgrade due to ineffectiveness. The main purpose of controlling is to ensure the implementation of plans to the latter (Baker and Baker 2011).
The division of organizing and directing assists the financial manager in making critical decisions on the utilization of organization's resources to the most...
Directing entails the manager ensuring that the organization's results run efficiently. The purpose of this element of financial management is to ensure regular supervision and controlled utilization of available resources.
The element of decision-making is a daily process in every organization's managerial staff in their practices. Financial managers often make choices from several alternatives given to them. Decision-making binds to the consequent elements of planning, organizing and control. This depends on information with its core tasks constituting analysis and evaluation. The analyzed and evaluated information is mainly of a financial nature. Decision-making holds the purpose of making informed choices.
Generally Accepted Accounting Principles
Health care organizations have over the years adopted the general code of ethics. The organization's management employs these ethic codes in the interpretation of the organization's financial transactions. Such transactions involve the preparation of financial reports and statements. The accepted principles include consistency, relevance, reliability, and comparability. The concept of consistency stipulates that financial information be collected and reported in the same manner recurrently. Conceptual relevance requires that information contains a purpose and should provide credible support to the financial statements and reports. Reliability means that the reported information truly reflects the organization's statement of account. Comparability: the reported information is comparable with those from other organizations within the industry (Bradford, 2007).
Financial Ethical Standards
Confidentiality: accounting professionals are privy to financial information that is sensitive in nature. Such information could be utilized for purposes like financial gain, countering other entities'. The accepted accounting ethical standards restrict such confidential information only to the authorized parties. Certified Public Accountants and other…
