...Reporting Practices and Ethics Christine Crumity HCS 405 Module R4 October 10, 2011 Barbara Archer Reporting Practices and Ethics Reporting practices and ethics are the seams of health care accounting and management. It is important that the principles and practices are adhered to in order for the organization to continue operating. Health care is an organization which thrives on care and safety along with stability. It is management’s responsibility to ensure that not only care criteria are met, but financial obligations also. It is important to remember that the health organization not only serves the client, but family also when care, finance, and ethics are at hand. The function of management is to report fairly and accurately on all financial statements and obligations. Management is the key competency when it comes to ensuring that the strength of the organization is strong and all reporting practices are legal. Management will be the obligator to report to not only other management members, but the CEO or Chief Financial officer also. Management has the ability to keep staff stable, knowing that jobs are secure to financial statements or operational costs are not an issue in the health care organization they are currently employed in. If management respect their practices and obligations to report all finances fairly and accurately the organization can continue operating successfully. Management is the leaders in consistent and accurate reporting...
Words: 829 - Pages: 4
...Team Project: Financial Reporting and Ethical Practices Rakel Raigns, Jakeia Griffin, Victoria Jones, Samirah Merritt University of Maryland University College November 9, 2013 Author Note This paper was prepared for AMBA630 Economics Management Decisions, Section 9045, taught by Professor Victor Bahhouth. Executive Summary In order to avoid fraudulent reporting, the Securities Exchange Commission (SEC) has mandated that auditing for organizations must be completed by independent accountants. Today scrutiny of the accounting industry is more intense as laws are created to punish those that choose to falsify information. This paper aims to explain the importance of the Sarbanes-Oxley Act (SOX) as it relates to the internal control, Chief Executive Officers and Chief Financial Officers. We will also identify the pros and cons of the Sarbanes-Oxley Act (SOX) and changes that could be made in order to pose arguments from both sides of the act. Introduction In the early 2000’s, one of the darkest times ever experienced in the history of accounting occurred due to numerous scandals. The results of these scandals from companies lead to terrifying actions, which included the downfall of one of the largest accounting corporations, Arthur Anderson, for their help with Enron. Companies such as Enron, Tyco, and WorldCom have led to the passing of the Sarbanes-Oxley Act (SOX) due to their financial reporting scandals (Forbes, 2013). With the passing of SOX in 2002, the...
Words: 2955 - Pages: 12
...Article Review: Sarbanes – Oxley Act LAW/421 August 20, 2012 Jane Schneider Sarbanes – Oxley Act of 2002 Modern businesses have their full share of ethical dilemmas. With law and ethics, business environments can be equipped with tools to successfully handle ethical situations. Without legal and ethical discipline, a business can deteriorate in the blink of an eye. Because of the Sarbanes-Oxley Act, businesses can be controlled on the way they conduct business through the instruction of auditing, corporate governance, and financial reporting. The Sarbanes-Oxley Act came about due to the issues with Enron. Enron was an organization founded based on two companies: InterNorth and Houston Natural Gas. Enron grew rapidly in the United States and maintained strong globally. Even through Enron progressed, the executives became greedy. Days before Enron announced a $618 million loss over the third quarter, the company’s accountants told workers to destroy all audit material and keep the basic work documents. Because of this, workers suing Enron for lost retirement savings were denied all of the backup paperwork to support their claims against Enron. Enron’s accounting firm reminded employees of the document destruction process prior to the subpoenas issued by the Security and Exchange Commission. There is speculation that documents were being destroyed even after the subpoenas were issued. Accounting firms are to use a retention policy, and any intentional destruction...
Words: 691 - Pages: 3
...Full Disclosure August 8, 2012 Organizations and regulators are interested in information made publicly to investors. The form in which the information is presented in financial statements is an important aspect. The full disclosure principle is a tool used to establish how financial information is presented on financial statements. The full disclosure principle in accounting is an important part of financial statements. Full disclosure “calls for financial reporting of any financial facts significant enough to influence the judgment of an informed reader” (Kieso, Weygandt, Warfield, 2010, Chapter 24, pg. 1 para. 3). According to the Generally Accepted Accounting Principles (GAAP), organizations should present an essential statement that identifies the accounting policies embraced and complied by the reporting body (Kieso, et al.). Full disclosure statements should be the first notes compiled on the financial statements. Purposes of the full disclosure principle include: * Provide ethical and honest conduct * Provide accurate and fair disclosures and financial statements * Provide compliance and accountability The full disclosure principle must be exercised to financial officers and executives with justifiable business judgment and faith. The full disclosure principle is not easy to implement in an organization. The full disclosure principle can be costly to an organization, and the benefits are often hard to assess. Disclosure requirements have increased...
Words: 622 - Pages: 3
...| ACCOUNTING CHANGES | | | Sabrina Whitehead | Dr. M. Austin ZekenAccounting Undergraduate Capstone Acc 499 | 4/26/2012 | | Discuss the primary reason for the restatement and the impact to the financial results for the Company. Dell computers has delivered technology solutions for more than twenty-six years and has transformed countries, communities and the private sector to help achieve their goals at work, home and school. Michael Dell created PCs Limited but later changed the name to Dell Computer Corporation in 1984, as a freshman attending the University of Texas. The young entrepreneur purchased computer parts from wholesale distributors, installed them in his version of the IBM, and then began selling the custom-built person computers from his dorm room. After one year of successful business Michael Dell left college and incorporated his business and the Dell Company went public, selling stock market shares for $8.50 per share. After years of financial accomplishment in 2006 the Securities and Exchange Commission (SEC) made inquiries of Dell internal accounting and Dell Inc. was investigated after a review of past accounting and reporting practices and company eventually disclosed wrongful conduct for deferring revenue coming from software sales, errors and irregularities which took place from 2003 through 2007. The investigation concluded that a number of adjustment were improper, including the creation and release of accruals and reserves...
Words: 1261 - Pages: 6
...Case 2-5: Eating Time 1. Frame the ethical issue: Should Kevin Lowe “eat time” by taking work home and not record the time? 2. Gathering all the facts: * Kevin Lowe is a new staff accountant at Stooges LLP * Kevin took 50% longer to complete audit work than his predecessor. * Stooges LLP is on a fixed budget for these audits. * Bo Chambers and Moe Chambers are partners supervising Kevin. * Bo and Mo explicitly say that they do not want Kevin to cut down on the work he does. * Bo and Mo will not directly tell Kevin to “eat hours”. * Bo and Mo do explicitly say that it is up to Kevin to decide how to increase his productivity. * Bo and Mo also imply that completing work within budget is an important element of performance evaluations. * All major accounting firms have explicit policies against “eating hours”. * “Eating hours” has been a pervasive problem in the accounting industry for many years. * By “eating hours” Kevin will be contributing to inaccurate budgeting for his audits. 3. Identify the Stakeholders and obligations: * Kevin Lowe – a. Perform his job professionally and competently. b. Honestly report his hours as specified in work rules as a staff accountant. c. Do his best at Stooges LLC and try to get promotions and raises. * Bo and Moe – d. Manage staff and workload to achieve budget goals for the audit. e. Provide good ethical leadership to the audit team. f...
Words: 1933 - Pages: 8
...facing the accounting profession with the convergence towards a globally accepted accounting reporting structure and a global ethics structure. Today’s economy is becoming globally smaller and more importantly the economy from all fronts is becoming more co-dependent on one another from a domestic and international perspective regarding finance, raw materials, IT, and labor talent. Some of the challenges facing the accounting profession as move towards a global standard is how do we ensure the information are reliable? Many companies in various parts of the world have different reasons/motives for how financial information is compiled and distributed due to things such as government or other political/social reasons and influences. Another large issue facing accountants would be what is acceptable in Country A may be unacceptable from an ethical standpoint to Country B. An example of this, IGAAP is less stringent than U.S. GAAP regarding certain disclosures, therefore, how will the information be disclosed in order for investors and creditors to make informed decisions. From an ethical standpoint will companies chose to use IGAAP because it is less stringent and the disclosure will be less disclosed than it is today. Finally the idea of enforceability, in certain countries, will the Commission actually have authority to hold companies accountable for misleading, fraudulent or inaccurate disclosures or unethical behavior. What jurisdictional powers will be given and will the...
Words: 1818 - Pages: 8
...to Do The ethic case study was about an anonymous caller who is the controller of a privately-held, small, start-up company. The company was experiencing a severe cash shortage and was required to present the quarterly financial statements to the local bank, in order to begin receiving funds for the line of credit again. She had concerns that the senior executives of the company provided the local bank with misstated financial statements. The caller was later informed that the accounts payable clerk was instructed to record sales transaction generated by the Chief Executive Officer (CEO) of the company. As a result, the sales and receivables accounts were overstated in the financial statements. Before returning to work Monday morning, the caller decided to contact her former accounting professor, Dr. Mitchell seeking advice on how she could possibly handle the situation. After listening to the anonymous caller’s situation, if I were Dr. Mitchell, I would first advise the caller to conduct a meeting with the senior executives of the company, in order to explain her concerns in reference to the submission of quarterly financial statements to the bank that overstated the sales and receivables account. Also, I would advise the caller to reiterate the consequences to the senior executives during their meeting, warning them of what could happen if their illegal procedures were noticed; such as pay a large fine or serve jail time. However, after having the meeting if the senior executives...
Words: 2050 - Pages: 9
...1. What is the importance of identifying a number of alternative solutions to good decision making? A couple points to make: 1. Good decision-making starts with gathering the facts. You should seek out all available information. If you don’t you are handicapping your decision-making ability. 2. Understanding your alternatives is the key to “economic” decision-making. Decisions aren’t made in a vacuum. You have to consider your “opportunity costs” or what you are giving up when you choose one option over another. For example, what is the cost of going to college? The answer is NOT just the tuition. It is also the money you would have made if you would have been working instead of going to class. Understanding the pros and cons of each alternative is the basis for making a strong decision. One caveat: Sometimes marketers and other salespeople will try to take advantage of you by giving you a false set of choices. A car salesman may show you a $50k car and then show you a $35k car and claim it to be a good value relative to the first car. But he did not show you the first car to give you “more alternatives.” He showed it to you to warp your perception of “good value.” It is a best practice to identify at least three alternative solutions that will meet the requirements to solve the problem. Requiring a minimum of three alternative solutions forces the integrated project team to identify solutions that may not be obvious. It helps to prevent automatically adopting...
Words: 2285 - Pages: 10
...important to acknowledge some of the mistakes made by some companies that led to the creation of this Act. The Sarbanes-Oxley Act was originally enacted in the wake of the Enron scandal, but then pushed to congress after a series of high-profile financial scandals followed Enron, including WorldCom and Tyco that rattled investor confidence and the level of confidence that the public held in corporate America (Rouse). Enron Corporation was one of the largest energy companies in the world, marketing primarily electricity and natural gas but also provided financial risk management for its clients. Enron’s demise began in 1997 when it bought out a partner’s stake in a company (JEDI) and in turn sold that stake to another company (ChewCo) which was created, owned, and operated by Enron (Rouse). This began the multi-layered strategy of transactions that allowed the company to hide debts, report inaccurate accounting errors, making the company appear much stronger and financially sound than it was in reality (Rouse). The Sarbanes-Oxley Act was created in 2002 by Senator Paul Sarbanes and Representative Michael Oxley and signed off by President Busch and introduced and enforced major changes to the regulation of corporate governance and financial practice. The Sarbanes-Oxley Act is arranged into eleven 'titles' (www.soxlaw.com). As far as compliance is concerned, the most important sections within these eleven titles are usually considered to be 302, 401, 404, 409, 802 and 906, which...
Words: 1240 - Pages: 5
...The Sarbanes-Oxley Act of 2002 Abstract This paper addresses financial analysis standards legislated in the Sarbanes-Oxley Act of 2002 (SOX). The focus will be on how the legislation enhanced the role of auditing and auditing firms, the impact of whistleblower legislation, and the recent Supreme Court decision. The paper attempts to show that though there continues to be opposition to SOX’s financial reform legislation, there is a case to be made in support of SOX. The research relies on historical data, such as the Enron scandal, and the recent decision by the United States Supreme Court decision that deems SOX as constitutional, to support that legislation is a necessary requirement in today’s global corporate environment, in which some of the largest corporations have proven that, left to their own devices, they will gravitate toward corporate malfeasance. The Sarbanes-Oxley Act of 2002: WorldCom. Enron. Adelphia. Global Crossing. What do all these companies have in common? They will always be synonymous with the following: financial fraud, corporate malfeasance, internal corruption, and the reason behind the passage of the Sarbanes-Oxley Act of 2002 (SOX). Not since the Crash of 1929 and the subsequent passage of the Securities Act of 1933 and the Securities Exchange Act of 1934 (Bumgardner, 2003, para. 2), had the country seen such a push for financial reform. Triggered by investigations into corporate fraud by some of the largest and most successful corporations...
Words: 3735 - Pages: 15
...The media should include ethical standards before and after publishing news. Nevertheless, there are situations in which the media publishes offensive and vulgar information. In those situations, the media does not include principles because they are not compatible with financial gains. However, the media should always inform with integrity, objectivity, independence, and transparency. Codes of Ethics are a way to guarantee the media follows principles and ethical standards. A Code of Ethics sets out principles and guidelines built on core values. For example, the Code of Ethics of Australia’s Media Entertainment and Arts Alliance establishes that “MEAA members engaged in journalism commit themselves to honesty, fairness, independence, and respect for the rights of others” (MEAA Journalist Code of Ethics). People who participate in the media must put the principles into practice and apply them when they search, receive, distribute and comment the information. Consequently, the media...
Words: 900 - Pages: 4
...governments seek to intervene in situations where market failure occurs. Market failure may arise due to monopolies, barriers to entry for new businesses, and information gaps. Public interest theory makes three assumptions. First, interest of consumers is translated into legislative action through operation of the internal marketplace. Secondly, agents will seek regulation on behalf of public interest. The third assumption being that government has no independent role to play in the development of regulation. In 2002 the Sarbanes-Oxley Act was created in America to enforce greater regulation and compliance for financial reporting and corporate governance. This Act was created in response to corporate scandals involving larger companies like Enron and Tyco International, and thus public interest theory suggests the government’s response was as a result of market failure due to inaccurate auditing and accounting procedures. The premise of private interest theory is that governmental bodies and political leaders use their power to coerce businesses through taxation, regulation, and subsidies. The Basic assertion of privation interest theory is the law of diminishing returns which exists between group size, and costs of using political process. A second assumption is government officials are rationally self-interested. Politicians seek re-election therefore it is in their self-interest to sell their right to coerce to enhance electoral success. It could be argued that the establishment of...
Words: 1740 - Pages: 7
...to various professions and their code of conduct. Ethics encompass a set of understood rules to guide the direction of a business, company, corporation, or organization. Ethics are essential and tremendously depended on in the profession of accounting. According to the Merriam-Webster dictionary, accounting is defined as, “The skill, system, or job of keeping the financial records of a business or person.” The system of accounting records financial transactions and analyzes, reports, and verifies the results. Accountants perform these tasks by establishing these reports through a system known as bookkeeping. The three common reports that are generated by accountants are balance sheets, income statements, and cash flow statements. Each of these reports serve a crucial purpose to the success of a corporation. The balance sheet summarizes a company’s assets and liabilities. The income statement reports a company’s gross proceeds, profit or loss, and expenses. The cash flow statement analyzes the flow of incoming and outgoing cash within the business or organization. Management accounting differs slightly from financial accounting and public accounting. Investopedia defines the term ‘Managerial Accounting’, also known as ‘cost accounting’, as “The process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization’s goals.” Managerial accounting...
Words: 2682 - Pages: 11
...of strong methods for organizing risk management responsibilities and activities. To achieve business objectives and continued competitive advantages, Riordan must structure risk management responsibilities and activities using a formalized process. The Enterprise Risk Management (ERM) process will ensure identified risks are properly assessed, controlled, and monitored throughout the company to reduce Riordan’s exposure to legal liabilities. This compliance plan outlines the ERM process for Riordan following the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework recommendations on critical aspects of organizational governance, business ethics, internal control, enterprise risk management, fraud, and financial reporting. Enterprise risk management deals with risks and opportunities that affect business value, negatively or positively, is defined as follows: “Enterprise risk management is a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives”...
Words: 2414 - Pages: 10
