Health Care Financial Accounting Essay

fiscal concern is a genuinely(prenominal) tangled puzzle out across the air judicatures. The increase competition, complexness of business, rising expectations of investors etc can come-on each arrangement to use wrong fiscal anxiety tactics to bring on their books look bankrupt. But this can be extremely chaotic In future. health care organisations are especially prone to such practices because of the extreme financial pressure and faultfinding nature of business trading trading operations.The purpose of this physical composition is to discuss the different aspects of the financial charge, ecumenically recognized be principles and the suggested respectable practices in this regard. Financial management is not nevertheless a record of debits and credits. It is a measurement of the health of an organization. The four elements of financial management consist of planning, control, organizing and directing, end making. The business operations must(prenomin al) be planned and the management must be well certain of all the business aspects. The management postulate to follow a systematic process to correct honourable decisions in ad save with the goals of the organization.It must be meetd that sufficient depot is available to perform business operations in time. The management must pull in the control of business operations and so the financial activities. The management needs to ensure that each part of the organization is adhering to the goals establish for it. The management needs to decide how in effect the resources can be used to happen upon the goals. This helps in maintaining the financial health of the organization. in that location is always a possibility of a financial situation in an organization when a difficult decision is to be taken.Such tidy sum require bustling decision making capability along with the understanding of the consequences of the decisions. In addition to the complexity of financial management , there are general accepted accounting principles. The general accepted accounting principles also referred to as (generally accepted accounting principles). mainly Accepted Accounting Principles are not any written rules. They are just the recommended accounting practices to maintain accurate, fair and undifferentiated financial reporting. Financial Accounting Standards visiting card (FASB) and International Accounting Standards Board (IASB) have got worked together to come out with GAAP.They rewrite the recommendations as and when required (Investopedia, n. d). Though either nation is free to adhere to any accounting system still GAAP is internationally followed to allow the interaction of organizations and their financial reports at international level. Ethics in financial management is rattling immanent in all types of organization but it is as yet more important in health care organizations. A patriarchal reason is that patients and their families are vulnerable to unhonorable practices. They deserve honesty in the financial aspects. The boards, executives, clinicians and the staff are equally trusty in this process.Another reason is that the health care organizations bear extreme financial pressure and it becomes very difficult for the pay department to strike a chemical equilibrium between the facilities and expenses. If the financial health of the organization declines, it sets up a negative curlicue of loss of business. there have been several(prenominal)(prenominal) incidents of un ethical financial management practices because of the increase complexity of business operations. thitherfore, several examples of ethical practice and conduct are suggested to head off any unfair and dishonest incident.There are several financial circumstances that challenge the management to take by rights decision in a spry manner. There may be tender unethical measures available that may fabricate the problem temporarily. But the management must n ot follow such measures as they may prove chaotic in longer run. They must take the ethical financial decisions. In a 2004 news show articles that discusses compromising situation.. This articles states, The financial pressures experienced by most healthcare organizations are intense. non surprisingly, financial statements receive frequent and inflexible scrutiny.Declining financial performance makes the organization and its management team look bad. If financial covenants arent met, a hospitals sting rating may be down-graded, resulting in reduced access to low-cost seat of government and other serious financial ramifications. For some(prenominal) reason, the board, management team, and external constituencies may fatality to make the numbers look better. The inflame is on the CFO to do the books other than (Tyler, 2004). In this example, the CFO is responsible to be honest. Manipulating the books the make the number look better would unethical.However, the CFO must make e thical financial decisions. Another example of thoroughly moral philosophy is a business attractions sincerity. A business organization can have positive as well as negative circumstances. It is very easy to rejoice the positive results but the otherwise is tough. The leaders must be true(prenominal) enough to shoulder the responsibleness of the negative incidents. They should also be confident of setting high standards of financial ethics in their organizations. It affects the hierarchy and thus the boilers suit ethical health of the organization is positively influenced.For example, the Healthcare Group Purchasing labor Initiative (HGPII), an organization dedicated to promoting the highest ethical standards and practices for the healthcare group purchasing industry, announced steps that will allow for even more transparency. They are activating a formal process to ensure urge and fair resolution of supplier complaints regarding a group purchasing organizations (GPO) purch asing process and they are implementing an self-sufficing Advisory Council to have outside observers make sure they are doing everything possible in terms of ethical standard (Freeman, 2010). finally it can be concluded that planning, control, organizing and directing, and decision making constitute the financial management. There are generally accepted accounting principles (GAAP) that recommend the best practices to avoid unethical financial reporting. Moreover, there are several examples of ethical conduct for financial aspects. As healthcare organizations are financially very much pressurized and involve a very risky real time business model, they need to be more sincere in financial management.