Describe your thoughts on protecting investors and contributors from losing trus
ID: 127292 • Letter: D
Question
Describe your thoughts on protecting investors and contributors from losing trust in how the organization manages the investment they have made. Do you think the abuse that occurred at Enron could happen in health care? Do you think legislation such as Sarbanes-Oxley should apply to health care? Why?Describe your thoughts on protecting investors and contributors from losing trust in how the organization manages the investment they have made. Do you think the abuse that occurred at Enron could happen in health care? Do you think legislation such as Sarbanes-Oxley should apply to health care? Why?
Describe your thoughts on protecting investors and contributors from losing trust in how the organization manages the investment they have made. Do you think the abuse that occurred at Enron could happen in health care? Do you think legislation such as Sarbanes-Oxley should apply to health care? Why?
Explanation / Answer
Protecting investors and contributors from losing trust in how the organization manages the investment they have made is very important; because to run an organization we need funds and for that, we have to satisfy our investors and contributors by providing quality services that are in good books of the end users i.e. the patients. According to the Los Angeles Times the collapse of Enron Corp; is a scathing picture of corporate greed and mismanagement, that accounting abuses masked more than $1 billion in losses in a one-year period alone. The abuse that occurred at Enron could happen in health care as well because accounting abuses can happen in the healthcare industry also.
Since the Sarbanes-Oxley Act upon closer inspection, has several sections appear to be relevant to the hospital industry. For example;
Governance
Title III, section 302 is entitled “Corporate Responsibility for Financial Reports.”
This section requires that the principal officers and financial officers sign the financial report, certify that the report contains no false statements, and certify that the report is materially correct or face stiff penalties.
Healthcare leadership activities must include formal statements that:
1. The signing officers have reviewed financial reports;
2. Reports do not contain material untrue statements or omissions considered misleading;
3. Statements fairly present financial condition and results in all material respects;
4. Signing officers are responsible for internal controls and must report findings;
5. All deficiencies are in internal controls reports and information on fraud is included; and
6. Internal control changes that could negatively impact them are included (Gregory,2008).