August 19, 2013
Reporting Practices and Ethics Paper
In all organizations accounting is essential because it is the root of business. Whether someone is working the front desk, management, or with patients everyone plays an important role in the generating of daily, monthly, quarterly, and annually financial statements by accountants with services that are being performed to consumers as well as performance from each of the staff. According to Sowell (2012), “balanced budget requirements seem more likely to produce accounting ingenuity than genuinely budget.” In other words accounting is all about correctly maintaining the finance of an organization, and concentrating on both revenues and expenditures. Those who work in the financial department need to make sure that there is more money coming in than money going out. The following includes proper reporting practices in a medical facility, the four elements of financial management, and the accounting principles and general financial ethical standards.
The four elements of financial management are described as the four steps of the control process. When managers regularly follow the four step control process their department is more effective and productive (Lombardi, Schermerhorn, & Kramer, 2007). The four steps of the control process are planning, organizing, leading, and controlling. The first step is planning which sets directions and assigns resources. The second step is organizing which guides staff and materials together in working conditions. The third step is leading which the manager inspires the staff to best make use of these resources. The fourth step is controlling which is when the manager checks to make sure that everything is running right (Lombardi et al., 2007).
Generally accepted accounting principles are guidelines that regulate how U.S. accountants conduct and format their reports which are determined by the FASB. For transparency purposes the accounting records need to be seen by several people outside the facility (Morley, 2012). If each organization composed its own accounting reporting methods the comparing of financial statements would be ineffective, and it would be easier to hide money (Morley, 2012). Organizations such as the U.S. Securities Exchange Commission and the American Institute of Certified Public Accountants acknowledge the FASB’s authority to set standards. This law makes certain that no money is taken without being taxed and all revenue is reported. When it comes to general financial ethical standards, financial professionals have an obligation to be a competent accountant, have a secured education, and a practice that prepares them for their positions. They are also obligated to continue their education to learn new information to help their positions (Morley, 2012). Financial professionals are also obligated to their employers, co-workers, consumers, shareholders, the profession, and themselves to continue the highest standards of conduct, and help their peers to do likewise (Association for Financial Professionals, 2012). Competency, confidentiality, and integrity are