Culture, Accounting, and Ethical Issues: Healthcare Administration

Healthcare Administration: Culture, Accounting, And Ethical Issues

Cultural Diversity

The causes of prejudice

Prejudice is described as the generalization of a group of people, based on negative attitudes that stem from stereotypes and non-factual beliefs. Although the reasons for prejudice may vary, Samovar, Porter and McDaniel (2009) explain three major motivations: societal pressures, social identities and scapegoating. Societal sources refer to rules and regulations that may be put in place in a given society to maintain one group's dominance over others. Social identities, on the other hand, are people's connection to their cultures and beliefs. Any groups that are deemed a threat to this connection are treated as enemies and are often at the receiving end of prejudice. Sometimes, different groups, such as gays and African-Americans are used as scapegoats to express anger and discontentment over various issues in society (Samovar, Porter and McDaniel, 2009). This allows one group to blame social, environmental, and economic conditions on another - due to the belief that the minority group is responsible for their suffering.

The difference between overt or blatant racism and institutional or subtle racism

Racism is the subordination of a given group or individuals, based on their skin color, place of origin or race. Racism can manifest itself either overtly or institutionally. Overt or blatant racism is expressed in the open and consists of public acts that support the superiority of certain races over others. Institutional racism is more subtle and it refers to policies and procedures of different institutions such as hospitals, schools, and corporations that limit the access of groups that may be seen as inferior, to products and services or progress. I was once a victim of institutional racism, when I was denied a chance to interview for an internship, simply because the vacancies present at that company were meant for some race - of which I was not a member.

Principles of accounting

What is your opinion of Randy's reasoning?

Randy was wrong to omit the asset and liabilities from the balance sheet. Financial statements are supposed to show a true and fair view of the business. More specifically, the balance sheet should indicate the financial position of the business at the end of that financial period. By omitting the asset and its related liability, different users of the financial statements will not know the true financial position of the business.

Explain the circumstances under which Randy's decision would be acceptable under GAAP and circumstances under which it would definitely be unacceptable

An error of omission can only be accepted if it was genuine and if the ownership of the property has not been transferred. Under GAAP, it can be omitted if the business uses cash basis of accounting, where it will be recorded in the next financial period after cash has been paid.

According to the matching principle that supports accrual basis of accounting, expenses and revenues have to be reported in the same period that they relate (Warren, Reeve and Duchac, 2013). The revenue recognition concept also supports that the liabilities that arise from Randy's asset have to be reported whether or not cash has been paid.

Generally, it is unacceptable for Randy to omit the information as his reasons are not genuine. Since the ownership has already been transferred to him, it is required that the asset bought features in the asset category and the liabilities included as accrued expenses. However, since it is a small business, the cash basis of accounting is more suitable as there are minimal payables and receivables (Warren, Reeve and Duchac, 2013).

How to approach Randy about the subject

Randy should first be made to understand the various method of accounting in order to determine the most suitable method for his business and warned of the consequences of intentionally omitting information from financial statements as it gives a wrong representation of the company. If he still continues with this trend, it should be classified as financial statement fraud and should be reported to the auditor of the business who will take the necessary action. As a third party, it is my responsibility to report fraudulent action as I have the right to access accurate and true financial statements for investment purposes.

Healthcare Law, Ethics & Policy