...Accounting Concepts, Assumptions, Principles, Elements Key Things to Know Objectives of Financial Reporting: 1. Provide useful information to investors and creditors for decision making (assume users have a “reasonable understanding” of business). 2. Provide information to access the amounts, timing, and uncertainty of cash inflows and outflows. 3. Provide information about resources (assets) and claims to resources (liabilities). Recognition: An item should be recognized in the financial statements when it meets all 4 of the following criteria: 1. Definition: meets the definition of an element 2. Measurability: measurable with sufficient reliability 3. Relevance: makes a difference in the decision 4. Reliability – representationally faithful, verifiable, neutral Accounting Underlying Assumptions - Basis for Generally Accepted Accounting Principles (GAAP) Entity Assumption - each business is its own “accounting” entity. Periodicity Assumption - divide economic activities into time periods for reporting. Going Concern Assumption - the company will remain in business and will...
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...Reporting Practices and Ethics Your Name University of Phoenix Health Care Financial Accounting HCS/405 Ashonta Tharps May 26, 2012 Reporting Practices and Ethics Revenue’s and expenses of any organization require the four main elements of financial management. These elements are planning, controlling, organizing and directing, as well as decision making. The reporting practices of the financial department has improved over the years with new and improved principles and general financial ethical standards being put into place. This paper will give the reader a better understanding of the four elements of financial management, acceptable accounting principles, and financial ethical standards. Any organization will have a Chief Financial Officer. These management personnel will follow these four basic elements to manage the financial process of the organization they work for. The first step is to plan the objectives of the organization and each step needed to complete their goals. The planning process is important to how the financial manager will keep track of money spent on projects and how they are accomplished. The controlling process is used to manage each step in the planning process to make sure the projects are on target and budget for completion. Managers use past reports to help them figure out what areas of the organization are in need of assistance and what the issues are. They are also used to determine what kind of assistance is needed or if...
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...Edwards Health Care Financial Accounting/HCS 405 October 17, 2011 Marjorie Romano Reporting Practices and Ethics Financial practices and ethics can play an important part of any organization including the health care environment. In order for the health care organization to be successful one must adopt an efficient financial practice and possess ethical standards. The management of finances for a health care organization may be a challenge for managers. This is why the health care manager will follow four basic elements for financial management. The basic elements include planning, controlling, organizing and directing, and decision making (Baker & Baker, 2011). Health care organizations have accounting principles generally acceptable and will comply with the financial practice and the practice of ethics to avoid fraud or abuse of the reporting practices. Elements of Financial Management Financial management has four basic elements, which assist the manager in making effective decisions for the health care organization. The first element of financial management is planning. The financial manager needs to identify the steps that he or she needs to take to accomplish the goals of the organization. However, first the manager must determine what the goal is for the organization and at that time determine what steps to follow to achieve the goal. The next element is controlling; a plan is in place that each area of the organization must follow. The financial manager must ensure...
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...practices. Reporting financial data reports is important and information must be accurate and factual. Organizations obtain and maintain financial data to aid in the audits of the amounts, control, and potential uncertainties of cash flows. Keeping the financial data current is important because majority of the time the data contains information about the organization’s equity and economic resources. Developing and analyzing ethical standards carefully allows organizations to stay in compliance with those standards formed for the health care community. Poor ethics and financial planning sometimes effects consumers. According to Nelson (2011), “Basic ethics principles that make up our common morality, including respect for patients, acting in patients’ best interest, avoid bringing harm to patients and treating patients in a fair and equitable manner, serve as the foundation for healthcare values.” This paper will contain a summary of the four elements associated with financial management, generally accepted accounting principles, and general financial ethical standards. The reader will explore Examples from two articles “Ethical Decision making for healthcare Executives” and “Ethics: A foundation for quality” that reflect ethical standards of conduct, financial reporting practices, and the significance of each example. Four elements of financial Management The four elements of financial management are planning, controlling, organizing/directing, and decision making. Planning is...
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...HCS/405 Sandra DiPietro Reporting Practices and Ethics Introduction Addressing financial reporting practices and ethical standards in health care finance can be done in various different ways. Either way this component of health care is addressed, it is important for a health care finance element, within an organization, to ensure that this is addressed correctly. A good way to explain and address the ethical standards in health care finance is by explaining the four elements of finance. These four elements include Planning, Controlling, Organizing, and Decision Making. With these four elements, addressing financial reporting practices and ethical standards in health care organizations, can be addressed, and will reflect how organizations accomplish this. Accounting Principles In health care organizations, financial reporting involves financial statements. There are four main financial statements. They are: (1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of shareholders’ equity (U.S. Exchange Commission, 2011). The third part of a cash flow statement shows the cash flow from all financing activities. It is very important for an organization to report their finances, since financial reporting will provide investors with information about the organization’s management. Financial reporting also provides information for all of management of their earnings and cash flow in which one can use...
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...Health Care Finances University of Phoenix HCS 405 Health Care Financial Accounting July 11, 2012 Reporting Practices and Ethics The financial management of health care organizations have the obligation to integrate financial reporting practices with ethical standards that directly reflects and affects health care patients, providers, policymakers, and the society. This paper will review articles that reflect ethical standard practices related to health care financial management and will cover the four financial management elements crucial to the health care organization. These four elements of financial management are the generally accepted accounting principles (GAAP), which are the planning, controlling, organizing and directing, and the decision-making (Baker & Baker, 2011). Planning The financial manager determines the short term and long-term objectives of the organization to create plans to meet organization’s objectives. When planning, the goal of the financial manager is to develop and outline strategies, to seek the input of everyone involved in the process and to ensure everyone supports, and understands their role in the execution the plan. Controlling The purposes the financial officers of controlling are to implement the plans, and are executed by organizational standards to avoid overspending the organization’s budget. Additionally, the financial manager oversee that each area of the organization takes action to...
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...Financial management is the management of any business finances or an organization in order to achieve the business financial objective (Jones & Bartlett, 2010). There are many financial decisions that are made on a day to day basis for any transactions to occur (Jones & Bartlett, 2010). These decisions are made according to the organizations fiscal objectives (Jones & Bartlett, 2010). But we all may have one question and that question is “How well are health care organizations’ finances and are these health care organizations financial records accurate? The four elements of financial management are recognized as planning, controlling, organizing and directing, and decision making (Jones & Bartlett, 2010). These are decisions are made on what kind of task is being performed. Some organizations strain over three of the elements which are planning, controlling (organization and directing is part of the controlling element), and decision making (Jones & Bartlett, 2010). 1. Planning can be defined as: The financial manager identifies these four elements as steps for an organization to accomplish their objectives. The planning process is to identify and take the initial steps to accomplish those objectives (Jones & Bartlett, 2010). 2. Controlling: Financial manager will take control and making sure that each part of the organization is following the plans that have been put into place (Jones & Bartlett, 2010). 3. Organizing and directing: This is a decision made by the financial...
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...Practices and Ethics The health care environment, in which financial realities and financial ethics play an important role in health services decision making, it is vital that managers at all levels understand the basic concepts of health care finance and how these concepts are used to enhance the financial well-being of the organization. In this paper, we will discuss the four elements of financial management, to include the accepted accounting principles and financial ethical standards. We will provide an example of ethical standards and financial reporting practices. Health Care Financing is a systematic framework for the evaluation of healthcare systems, as well as perform interdisciplinary research focusing on the relationship between economic development and healthcare (Baker & Baker, 2011). Financial Management Health care organizations accommodate services to consumers and also their financial status is also important to providing services. In any organization, financial management is very important toward an organization’s success. Financial management consists of four elements that work toward an organization financial practices and ethical standards (Dye and Sridhar (2008). Four Elements The first two elements of financial management works hand-in- hand are organizing and controlling. Financial managers use four basic financial statements to keep record of the organization’s financial status, balance sheet, the statement of revenue and expense, statement...
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...GAAP, Ethics, Elements financial Mgmt Rayna Harris HCS/405 January 22, 2012 Sandra Di Pietro When seeking healthcare patients not only demand but deserve the best care possible from the staff and the organization that they are intrusting with their care .As patients we expect and deserve honesty and integrity from the healthcare leaders, management, and personnel within that healthcare organization. Ethics in healthcare With setting the standards of healthcare personal on the highest level, financial administrative are the final authority on financial statements, and in order for theses leaders to make good and sound decisions they must be able to trust what is written on the financial statements. A chief financial officer acts like a judge who has the final authority and must be held to the highest ethical standards (Tyler, 2004). Most healthcare organizations experience intense financial pressures. Their financial statements are under persistent and frequent scrutiny, and things such as declining financial performance can make any healthcare organization look bad. When financial contracts are not met the organization bond rates become lower thus resulting in low-priced funds and other serious financial consequences. If this happens all eyes are on the chief financial officer, board associates, and the administration team and in turn may want to do the books differently to make the numbers look better. Financial officers may be asked to bend the rules some times...
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...Reporting Practices and Ethics Cassandra Pinkston HCS/405 March 4, 2012 Conway Brew Reporting Practices and Ethics Financial reporting is becoming a major problem within the healthcare organizations and the lack of morals and ethics is behind the problems with unethical financial reporting. Within the healthcare organization one must display morals and ethical standards when making ethical decisions. When reporting finances in healthcare financial managers should practice good ethical decision making by considering ethical principles such as; justice, autonomy and beneficence . The study of healthcare financial management can be so captivating and rewarding if practiced correctly. There are four elements of financial management that has been recognized and if used properly with good ethical business decisions could make financial reporting easy. The four elements of financial management are; planning, controlling, organizing and directing and decision making (Baker, J. J., & Baker, R. W., 2011). Planning is when the financial manager of a company takes the initiative to identify what steps needs to taken to reach the organizations main goal and once the steps have been identified the manager will set out to reach their goals (Baker, J. J., & Baker, R. W, 2011). Once the financial manager have identified the steps that needs to be take he/she must make sure each area of their organization is following that plan and this is considered controlling the plan that has...
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...xxxxxxxxx HCS/490 – Health Care Consumer: Trends and Marketing June 21, 2016 Professor Jack Heinen Financial management is a critical part of running and operating any business, and the health care industry is no different. In order for any health care industry to remain profitable and financially organized, it is extremely important for them to have someone designated to make sure that the finances are always current and monitored. It is also crucial that the organization utilizes the four elements of financial management. The four elements include planning, controlling, directing and organizing, and decision-making. Almost every industry that collects revenue sees some kind of financial fraud or abuse, and in the health care industry this has happened in many different ways. Making sure that there are accounting principles and ethical standards in place are an important way to try to avoid such chaos. The four elements of financial management are critical tools to help the financial manager keep a close eye on the finances from the start of a project to the very end. Planning is always the first element or step, and after assessing the business, the financial manager creates goals and objectives, based on the aims of the business. When making the plan, the financial manager will include the necessary steps to get there, what that will entail, and the end goal. Controlling is the step that comes after planning. Controlling...
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...Introduction Planning, controlling, organizing and decision making make up the four elements of financial management Baker (2011). Standards and guidelines of financial reporting are known as generally accepted accounting principles (GAAP) ("Accounting Principles & General Financial Ethical Standards", 2014). Financial ethics and standards determine the success of an organization. The VA is accused of the death of over 1000 waiting for care and budget mismanagement (“Bad VA care may have killed more than 1,000 veterans, senator's report says,” 2014). The alleged deaths could have been avoided through the use of GAAP. The FBI has uncovered millions of Medicare fraud rings (“More Than 20 People Arrested Following Investigations into Widespread Health Care Fraud in D.C. Medicaid Program ” 2014,). The Four Elements of Financial Management According to Baker (2011), the four elements of financial management are: planning, controlling, organizing and decision making. Planning is the stage of identifying the organizations objectives and steps to obtain the objectives. Controlling allows management to measure data from previous and current reports to determine changes within the organization as needed. Organizing is the stage in which management coordinates each aspect of the plan, such as; who, what, when and where. Decision making is management’s final role in making an educated decision based on the other four elements of financial management. Through planning, controlling, organizing...
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...key to understanding finance is learning the four elements of financial management and their relationship to one another. It is important that all financial records are up to date because this helps keep track of how an organization, so they know if they have a profit or a loss. There are four elements of financial management are planning, controlling, organizing and decision making. The first one is planning it allows an organization to set goals and guidelines to ensure success and accomplishments in set goals. The second element of financial management is controlling. Controlling allows an organization to ensure that all rules and regulations within the organization are being followed. The third element of financial management is organizing. Organization is important because it guarantees that the organization is working at its best and it is organized while directing the medical office to work and fix problems that may come. The last element of financial management is decision making. All decision relies on information, and evaluation. Decision making works along with the planning, controlling and organizing by gathering information and helping to make a decision. Financial management is important in healthcare financial plans. Companies can not function without the proper financial planning. Generally Accepted Accounting Principles (GAAP) gives guidelines for organizations to follow in regards to their financial report. Misconduct, fraudulent behavior and abuse happen...
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...Practices and Ethics This paper will include a summary of the four elements of financial management, a summary of the generally accepted accounting principles, and a summary of the general financial ethical standards. The four elements of financial management are controlling, planning, directing and organizing, and decision making. The generally accepted accounting principles are generally known as GAAP, and are the basic accounting principles and guidelines. A few articles will be examined and examples that mirror ethical standards of conduct and financial reporting practices will be cited. The articles are Medicare Fraud: California Is Well-Represented on Federal List of Health Fraud Fugitives and Medicare Fraud Arrests. The Four Elements of Financial Management The four elements of financial management are controlling, planning, directing, organizing, and decision making. These four elements are the duties a financial manager must perform. Planning is where the objectives are recognized and the steps that must be taken for accomplishing these objectives are established. In the controlling element the financial manager must make sure each department in the organization is following the plans for accomplishing the set objectives. To ensure all plans are being followed, the financial manager will study the current reports and compare them with older reports. During the organizing component, the financial manager decides how the organizations resources will be used most...
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...Financial Planning or Financial Plan is defined as, “a comprehensive evaluation of an investor’s current and future financial state by using currently known variables to predict future cash flows, asset values and withdraw plans” (Investopedia, 2015). Many companies and organizations cannot run without having the proper financial planning, by keeping records up to date, following the Generally Accepted Accounting Principles (GAAP) and general financial ethical standards as well as the four main elements of financial management. Finally, by addressing financial reporting practices and ethical standards within healthcare finance, fraud and abuse can not only be monitored but the integrity and responsibility of that medical clinic or hospital can continue their reputation at a high stance. Fundamentals of Financial Management There are four main elements of financial management; planning, controlling, organizing and decision making. In the planning element, financial managers have to classify the many steps that need to be taken in order to accomplish and complete an organizations objectives. The main purpose of planning comes down to identifying the steps in accomplishing these objectives. When financial managers oversee each area of an organization, making sure they follow the steps that have been established in plans is the controlling element. Organizing includes the financial managers decisions on how to appropriately use the resources of a company to make sure plans...
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