Effective audit activities since SOX provides a guideline on how the

Effective audit activities since sox provides a

This preview shows page 3 - 5 out of 8 pages.

Effective audit activities- since SOX provides a guideline on how the organizations should manage their operations, the financial conduct is done in an organized and transparent manner. The accountant is aware of the repercussions of incomplete financial records; hence they are keen on their operations. Financial reports transparency. The fact that SOX provides guidelines on how health care institutions should record and manage their financial records and the regular auditing activities ensure the transparency in the financial reports. This means that financial frauds are eliminated or reduced in the healthcare financial systems. Besides the SOX helps in establishing business standards and procedural, financial statements disclosure. SOX Effectiveness in Regulating Ethical Behavior of For-Profit Health Care Organizations The SOX have been effective in regulating the ethical behavior of both the for-profit and non-profits health care institutions. The fact that SOX provides that the organizations have to adhere to the code of conduct and business ethics, it provides a guideline through which the organization improves their ethical behavior. The SOX encourages the employees to disclose any
Image of page 3
SOX REGULATIONS 4 unethical behavior that is prevailing in an organization and any financial irregularities. For instance, there are healthcare institutions that may indulge in substandard services or substandard medicines in inpatient management to reduce the operational costs, maximize the company's profit margins ( Banerjee, Humphery-Jenner, & Nanda, 2015) . For such instances, the SOX provides guidelines to report such incidents, whereby companies may be sued for patient exploitation. The Sarbanes-Oxley Act helps in ensuring the implementation of ethical behavior in an organization leading to proper organizational management and unique corporate culture. Here are some of the benefits that for-profit health care organizations get by adhering to the SO provisions. Easy conflict management within an organizational setting, accuracy I financial reports, formulation of a strong code of conduct, efficiency in internal control, self-regulation, improved corporate governance, and proper ethical behavior in the organization. The SOX guidelines have helped the organization in reducing billing frauds, patient complaints, and impulsive advertisements. The HealthSouth Fraudulent Scandal and the GAAP Violated The accounting irregularity at the HealthSouth's Corp was quite significant and multifaceted. The fraud activities have been concealed and developed over the past seven years until its realization. Therefore, to notice this financial irregularity, it required the effort and, to some extent, luck. Despite the complexity and magnitude of the fraud case, the irregularity was common to other cases in publicly traded companies.
Image of page 4
Image of page 5

You've reached the end of your free preview.

Want to read all 8 pages?

  • Winter '17
  • saurav yadav

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors