Question

Discuss the issues raised in Case C13-7 from financial reporting and ethical perspectives.

Answer 1

Q.1 Discuss the issues raised in Case C13-7 from financial reporting and ethical perspectives.

Answer : Financial reporting :includes all financial communication from the business to outside users including press releases, shareholder minutes, management letters and analysis, auditor reports, and even the notes of the financial statements. Basically, anything that can convey financial information to the public is considered financial reporting of some kind.

ethical perspective : is the lens an individual uses to view a problem. Several ethical perspectives have been around for centuries, including utilitarianism, natural law, consideration of rights and justice, virtue ethics, and the idea of social contract.

Issues raised in case C13-7 from financial reporting and ethical perspectives :

1. ​​​​​​​ Asset Misappropriation : This term includes using organizational funds for things other than the organization. In the healthcare industry, this could include many things.For example, a hospital nurse could be using hospital supplies to take home to care for a loved one. As ethical as this may sound, it is damaging to the financial reporting side of the organization.An executive within the company could also be taking funds and embezzling for his or her own gain. Without noticing, this creates an intricate web of missing funds that can mean disaster for the organization.From an ethical standpoint, any supplies, money, or other items taken from the industry is stealing from the patients that need it most. This means creating a downward spiral of events from a monetary loss to ultimate organizational failure.
2. Disclosure Concerns :Although it is an issue to overly disclose, it is also an issue to disclose too little. If a loss happens, they may choose to hide this loss from potential investors to create a facade of success.This type of disclosure is unlawful and dangerous.An organization that is deceitful in its disclosure may lose more than one investor at a time. This creates less funding for the organization and an almost stat loss of care to patients.If an organization is honest and ethical about their loss, they may lose an investor. But, they may be able to keep the investors they currently have, putting out a rapid fire in the end.It is important for financial representatives to keep the organization’s information under wraps.Yet, certain information that could damage the relationship with an investor or lead to an event should be disclosed.
3. Executive Focusing : Another ethical concern for the healthcare industry lies in the organization becoming too focused on the executive.For example, an executive within an organization that is given too much power may use this power to pressure the financial reporting and analysis team.From accountants to billing specialist, the team may feel as if they need to fake numbers or not disclose certain information due to the ideation of the executive.These executives are then free to spend fake money on purchases outside of the organization and to gain investors to create a rise in their income and power.
4. No Direct Chain of Command :Every industry must have a proper chain of command in order to provide the best financial reporting and analysis.Organizations within the healthcare industry should strive to have command chains that are effective and highly trained. If an employee notices a problem within the organization’s reporting, it should be reported and follow this chain to ensure something is done.Within a chain of command, financial reporting and analysis issues can go unnoticed, creating further damage to the organization’s assets.