Financial Reporting Practices and Ethical Standards of Health Care Finance

Financial Reporting Practices and Ethical Standards of Health Care Finance

Financial Reporting Practices and Ethical Standards of Health Care Finance

Whether a nonprofit or for-profit organization, financial management is complex, but by following the four basic elements of financial management accurately and following the generally accepted accounting principles, disclosing the financial status of an organization is easier. It is the responsibility of the financial management team to be accurate, current, and integrate finance reporting with the standards set forth by the code of ethics and mission statement of the facility. An organization has the responsibility and needs the integrity to disclose accurately the financial status to its shareholders and to the public. Reporting inaccurate information can create ethical as well as long-term monetary problems. That is why releasing an accurate financial statement is quintessential with maintaining the organization’s code of ethics and mission statement that are the foundation of any facility. This report with further explain the four elements of financial management, the generally accepted accounting principles (GAAP), and why following the general financial ethical standards is so important to an organization.

Financial management is overseeing cash flow of an organization. To manage the in-flow and outflow correctly, there are four elements of financial management to follow: 1) planning, 2) controlling, 3) organizing and directing, and 4) decision making. Planning is the first step of a good financial manager. It is identifying the objectives of the organization and devising steps to reach those objectives. Decision making is used during the planning phase because financial managers need determine the most important steps needed to make the organization run smoothly and efficiently while staying with the organizational guidelines (Baker & Baker, 2011).

The second element goes hand-in-hand with...