healthcare finance (ashford university)

Prior to beginning work on this discussion, read Chapters 2 and 3 of the textbook on the four elements of financial management. Additionally, you will need to read the What is GAAP? (Links to an external site.) web page and review the An Overview of Management Accounting (Links to an external site.) website.
In your initial post, describe a real-world example of each element by applying it to the operations or planning of a business where you have worked. Next, choose one of the elements and give an example of how you would apply it as the manager for a health care facility (i.e., primary care physician’s practice, a specialty practice, long-term care, clinic, hospital, etc.).
Your initial post should be between 250 and 300 words and cite the textbook and/or the required resources listed/linked in the directions using APA format as outlined in the Ashford Writing Center (Links to an external site.)’s Introduction to APA (Links to an external site.) resource.

WHAT IS GAAP?
Generally accepted accounting principles, or GAAP, are a set of rules that encompass the details, complexities, and legalities of business and corporate accounting. The Financial Accounting Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved accounting methods and practices.
U.S. law requires businesses that release financial statements to the public and companies that are publicly traded on stock exchanges and indices to follow GAAP guidelines, which incorporate 10 key concepts:
• Principle of regularity: GAAP-compliant accountants strictly adhere to established rules and regulations.
• Principle of consistency: Consistent standards are applied throughout the financial reporting process.
• Principle of sincerity: GAAP-compliant accountants are committed to accuracy and impartiality.
• Principle of permanence of methods: Consistent procedures are used in the preparation of all financial reports.
• Principle of non-compensation: All aspects of an organization’s performance, whether positive or negative, are fully reported with no prospect of debt compensation.
• Principle of prudence: Speculation does not influence the reporting of financial data.
• Principle of continuity: Asset valuations assume the organization’s operations will continue.
• Principle of periodicity: Reporting of revenues is divided by standard accounting time periods, such as fiscal quarters or fiscal years.
• Principle of materiality: Financial reports fully disclose the organization’s monetary situation.
• Principle of utmost good faith: All involved parties are assumed to be acting honestly.

Because GAAP standards deliver transparency and continuity, they enable investors and stakeholders to make sound, evidence-based decisions. The consistency of GAAP compliance also allows companies to more easily evaluate strategic business options.
WHAT ARE THE BASIC PRINCIPLES OF ACCOUNTING?
Beyond the 10 principles, GAAP compliance is built on three rules that eliminate misleading accounting and financial reporting practices. These rules create consistent accounting and reporting standards, which provide prospective and existing investors with reliable methods of evaluating an organization’s financial standing. Without these rules, accountants could use misleading methods to paint a deceptive picture of a company or organization’s financial standing.
These three rules are:
1. Basic accounting principles and guidelines: These 10 guidelines separate an organization’s transactions from the personal transactions of its owners, standardize currency units used in reports, and explicitly disclose the time periods covered by specific reports. They also draw on established best practices governing cost, disclosure, going concern, matching, revenue recognition, professional judgment, and conservatism.
2. Rules and standards issued by the FASB and its predecessor, the Accounting Principles Board (APB): The FASB issues an officially endorsed, regularly updated compendium of principles known as the FASB Accounting Standards Codification. The compendium includes standards based on the best practices previously established by the APB. These organizations are rooted in historic regulations governing financial reporting, which were implemented by the federal government following the 1929 stock market crash that triggered the Great Depression.
3. Generally accepted industry practices: There is no universal GAAP model followed by all organizations across every industry. Rather, particular businesses follow industry-specific best practices designed to reflect the nuances and complexities of different areas of business. For example, banks operate using a different set of accounting and financial reporting methods than those used by retail businesses.
HISTORY OF GAAP
Without regulatory standards, companies would be free to present financial information in whichever format best suits their needs. With carte blanche to portray a company’s fiscal standing in the most ideal light, investors could be easily misled. The Great Depression in 1929, a financial catastrophe which caused years of hardship for millions of Americans, was primarily attributed to faulty and manipulative reporting practices among businesses. In response, the federal government, along with professional accounting groups, set out to create standards for the ethical and accurate reporting of financial information.
According to Stephen Zeff in The CPA Journal, GAAP terminology was first used in 1936 by the American Institute of Accountants (AIA). Federal endorsement of GAAP began with legislation like the Securities Act of 1933 and the Securities Exchange Act of 1934, laws enforced by the U.S. Securities and Exchange Commission (SEC) that target public companies. Today, the Financial Accounting Standards Board (FASB), an independent authority, continually monitors and updates GAAP.
Today, all 50 state governments prepare their financial reports according to GAAP. While a little less than half of U.S. states officially require local governments to adhere to GAAP, the Governmental Accounting Standards Board (GASB) estimates that approximately 70% of county and local financial offices do anyway.
WHO CAME UP WITH GAAP?
While the federal government requires public companies to file financial reports in compliance with GAAP, they are not responsible for its creation or maintenance. Instead, a few independent boards serve as authorities on these principles, continually updating them to accommodate changing business practices and evolving organizations. For example, goodwill and interest rate swap standards are among several recent changes to provide alternatives for private companies. Below, we have created an overview of the boards that oversee GAAP pronouncements.
Financial Accounting Foundation (FAF) – This organization was formed in 1972 as the administrative corporation that oversees the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) . The FAF is responsible for appointing board members and ensuring that these boards operate in a fair and transparent manner. Members of the public are invited to attend FAF organization meetings in person or through live webcasts.
FINANCIAL ACCOUNTING STANDARDS BOARD
On the recommendation of the American Institute of CPAs (AICPA), the FASB was formed as an independent board in 1973 to take over GAAP determinations and updates. The board is comprised of seven full-time, impartial members, ensuring it works for the public’s best interest. In addition, the board is monitored by the 30-person Financial Accounting Standards Advisory Council (FASAC). FASB is responsible for the Accounting Standards Codification, a centralized resource where accountants can find all current GAAP.

The field of Management Accounting, often referred to as Managerial Accounting or Corporate Accounting, includes the financial and accounting tasks required to operate a business. Managerial accountants work within companies and organizations to direct internal financial processes; monitor costs, sales, spending and budgets; conduct audits; identify past trends and predict future needs; and assist company leaders with financial decisions.
Management accountants are often confused with financial accountants; while both provide valuable services to an organization, there are key differences between the two roles. Managerial accounting primarily involves completing tasks and producing reports that inform company leadership about financial decisions related to general company operations. Financial accounting’s central focus is informing external groups – such as banks, boards of directors, stockholders and tax agencies – about the company’s financial status.
Someone entering the managerial accounting field should be skilled in risk management, budget planning, strategic planning and financial data analysis. These accountants also have a detailed knowledge of generally accepted accounting principles (GAAP), strong communication skills and a forward thinking approach to their work.
CAREERS IN MANAGEMENT ACCOUNTING
Management accountants find employment opportunities in a variety of work settings and industries. Professionals in this field are in demand in public and private companies, nonprofit organizations and government offices. Each company designates specific job titles and responsibilities based on their business model and needs.
The primary duties of a management accountant vary according to an organization’s size, compliance and reporting requirements, and total revenue. Review the following career profiles for expectations of management accounting positions representing entry-, mid- and senior-level employment.
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SPECIALIZATIONS
Budget Analyst
Budget analyst positions are found at a wide range of companies and organizations, as well as at all levels of government. They often report to accounting or finance managers. Job titles with similar responsibilities include cost estimators, budget accountants and management analysts.
• Responsibilities
• Job Stats
• Education and Experience Requirements
• Additional Qualifications Recommended
Responsibilities
• Organize financial tasks
• Develop budgets
• Monitor cost and revenue trends
• Inform project managers of budget details
• Make strategic planning and resource allocation recommendations
Financial Analyst
Financial analysts work in a wide range of industries from international businesses and insurance companies to credit institutions and nonprofit organizations. They often report to a senior accountant or financial manager. risk analysts, staff accountants and portfolio managers have similar roles and responsibilities.
• Responsibilities
• Job Stats
• Education and Experience Requirements
• Additional Qualifications Recommended
Responsibilities
• Make cost management decisions
• Invest funds
• Improve financial practices
• Provide detailed data analysis and reports that track budget trends and forecast future needs.
Accounting Manager
Accounting managers work in a range of settings, from retail and healthcare to education and nonprofits. This role usually reports to a senior-level position, such as a finance director or a corporate controller. Job titles with responsibilities similar to those of an accounting manager include: accounting supervisor, accounting manager and senior accountant.
• Responsibilities
• Job Stats
• Education and Experience Requirements
• Additional Qualifications Recommended
Responsibilities
• Prepare financial statements and balance sheets
• Assist with auditing requirements
• Ensure compliance with financial regulations
• Oversee the organization’s accounting processes
• Supervise and train staff accountants
Controller
Controller positions are found in business settings, nonprofit organizations and government agencies. The range of responsibilities varies based on the size of the company and its accounting office. The duties and expectations are similar to those found in other positions, such as finance manager, director of accounting, corporate controller and comptroller.
• Responsibilities
• Job Stats
• Education and Experience Requirements
• Additional Qualifications Recommended
Responsibilities
• Oversee all accounting functions
• Maintain financial data
• Supervise accounts payable and receivable transactions
• Audit financial documents and processes
• File tax returns
• Establish internal accounting policies and procedures
• Create financial reports
Chief Financial Officer (CFO)
CFOs are top-level executives found in small and large companies, with varying responsibilities based on the size of the staff and budget, as well as the nature of the organization’s programs, products and services. Similar roles and job titles include treasurer, director of finance and vice president of finance.
• Responsibilities
• Job Stats
• Education and Experience Requirements
• Additional Qualifications Recommended
Responsibilities
• Lead all financial operations
• Fundraising and investing
• Risk management
• Budget planning
• Ensure regulatory compliance
• Report to the board of directors
• Participate in high-level decisions about asset allocation and strategic planning
• Provide oversight for human resources, accounting and other offices within an organization