Accounting_Principles_and_Ethics_Paper

Running head: ACCOUNTING PRINCIPLES AND ETHICS ARTICLES Patricia A. Archie University of Phoenix Accounting Principles and Ethics Paper HCS 405 Healthcare Financial Accounting Instructor: Linda Frazier Date: October 13, 2009 Abstract For this paper, the writer has chosen two articles which cover the following topics: General Accepted Accounting Principles (GAAP) and corporate compliance, ethics, fraud and abuse. With this in mind the write will discuss both articles in detail. In conclusion, writer will discuss the importance of how each area of discussion relate to the importance of financial management of health care organizations. Accounting Principles and Ethics Paper According to BNET business dictionary online, accounting principles are rules, standards and guidelines that apply to accounting practices and the procedures required when reporting information. Ethics is a body of moral principles that set standards of behavior (Webster online Dictionary). These standards reflect shared values expressed in a code of ethics that members of a profession or organization agree to uphold. In this paper the writer will discuss two articles which address General Accepted Accounting Principle (GAAP) and corporate compliance, ethics, fraud, and abuse. In conclusion, writer will discuss the importance of how each area of discussion relate to the importance of financial management of health care organizations. According to Russell (2009), accountants are self- regulated professionals that are accepted to uphold a certain standard. In this article, the author outlines the purpose of GAAP, the guidelines for preparing all financial information according to GAAP, primary principles upon which GAAP is built and GAAP assumptions of how accounting principles will be upheld and used in a business. It is essential that all business entities use General Accepted Accounting Principles. The purpose of the General Accepted Accounting Principle (GAAP) is to assure consistency in accounting practices, not only within a health care company but also across all regulated companies. The primary principles that GAAP is built upon are Historical Cost Principle, Revenue Recognition Principal, Full Disclosure Principle, and Matching Principle. Each one of these principles has a very important role in the success of any health care business. According to Russell (2009), GAAP assumes that the health care facility is not going to go under anytime soon, the facility is an independent entity and separate from its owners, the facility is financially stable and the facilities operations are reported on a regular basis. According to Byassee and Saum (2000), federal and local prosecution of fraud and abuse violations has clearly accelerated over the past several years. In an article titled, Effective health care corporate compliance -- Implementing HIPAA and Other Compliance Programs the writer discovered good examples of corporate compliance, ethics, fraud, and abuse. The article is about several instances of corporate compliance, ethics, fraud, and abuse. In March, 2000, Community Health Systems reached a $31 million settlement with the Department of Justice concerning overpayments based on up-coded billings to Medicaid, Medicare and CHAMPUS programs (Byassee and Saum, 2000). Another violation discussed in the article is a violation which took place in December 1999 when a federal judge in Tampa, Florida, sentenced a Columbia/HCA Healthcare Corporation executive to two years in prison for Medicare fraud and six counts of conspiracy and making false statements on Medicare and CHAMP US cost reports. The General Accepted Accounting Principles and corporate compliance, ethics, fraud and abuse are very important in the financial management of health care organizations. As seen in the articles above, GAAP is necessary in the success of all businesses regardless of the type of business. The GAAP is used to assure consistency in accounting practices, not only within a health care company but across also all regulated companies. All corporations are held at high standards to uphold ethics standards and to prevent fraud and abuse. It is the responsibility of a corporation to develop compliance programs and to ensure that these programs are upheld. In conclusion, the writer has chosen two articles which cover the following topics: General Accepted Accounting Principles (GAAP) and corporate compliance, ethics, fraud, and abuse. With this in mind the write has discussed both articles in detail. In conclusion, writer has discussed the importance of how General Accepted Accounting Principles (GAAP) and corporate compliance, ethics fraud and abuse. relate to the importance of financial management of health care organizations. Reference Page Accounting Principles. In BNET Business dictionary online. Retrieved October 13, 2009, from http://dictionary.bnet.com/definition/accounting+principles.html. Byassee, J., & Saum, T.B. (2000). Effective healthcare corporate compliance-Implementing HIPPA and other compliance programs. Healthcare Industry. Retrieved October 13, 2009, from http://BNET.com/healthcareindustry. Ethics. In Webster dictionary online. Retrieved October 13, 2009, from http://webster.dictionary.com/definition/ethics. Russell, Michael (2009). Generally accepted accounting principles- A primer. Ezine Articles. Retrieved October 13, 2009, from http://ezine.articles.com/'expert=Michael.