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Health Care Organizations - GAAP, Corporate Compliance and Ethics

Please help with the concepts of answering this question: How do GAAP, Corporate Compliance, and Ethics combine to prevent fraud and abuse in health care organizations?
With this question I'm describing the concepts of GAAP, ethics, corporate compliance, fraud and abuse.
Also, it needs to describe and identify the relationships of these concepts including fraud and abuse prevention.

Solution Preview

See the attached file.

Accounting, Ethics, and Compliance

How do GAAP, Corporate Compliance, and Ethics combine to prevent fraud and abuse in health care organizations?

Introduction to the Issue

A standard of corporate compliance helps organizations prevent fraud and abuse by holding them accountable for their every detected action, intentional or not. With the ever-increasing expectation for increased onus of responsibility, corporate accountability and transparency it is important more now than ever for corporate compliance and ethics to combine efforts and work to prevent fraud and abuse in health care organizations. In keeping with this demand in ethics and accountability; Generally Accepted Accounting Principles (e.g., GAAP ad CARF) and; The Health Insurance Portability and Accountability Act (HIPAA); and other related Corporate Compliance and Ethics Standards assist organizations in meeting the requirements handed down by federal regulation and legislation (O'Brien, 2006).

Discussion

The basic tenet and impetus of corporate compliance is to protect organizations from fraud, misuse and abuse, and waste that could potentiate intentionally or unintentionally, and involves a federal audit or investigation. Overall, a clearly-conceived, well-defined corporate compliance program will do much in assisting organizations and employees in the deterrence and detection of illegal and or unethical activity (O'Brien, 2006).
Explaining Generally Accepted Accounting Principles (GAAP)

Companies tend to follow different accounting rules for financial reporting and tax purposes. In the United States, GAAP are used in financial reporting and GAAP reporting and adopts the accrue-basis accounting for recording transactions. GAAP allows sales on accounts to be recorded as revenue for the period in which they occurred with the accounts receivable recorded as a temporary asset. GAAP are used in accounting to guide in recording and reporting financial information. Equipped with set principles, GAAP was developed by the accounting profession and the two laws of the Securities and Exchange Commission (SEC): The Securities Act of 1933 and the Securities Exchange Act of 1934; which gave the SEC authority to establish reporting and disclosure requirements. The Governmental Accounting Standards Board (GASB) also established and developed accounting standards for state and local governments (CliffNotes, 2012).

The Rise of Corporate Compliance and Ethics Programs

Corporate compliance programs were first and mainly developed out of an idea and calling in response to the Federal Sentencing Reform Act of 1984, which led to the creation of the United States Sentencing Commission in 1987 and subsequently the development of the U.S. Sentencing Guidelines. Because of numerous extensive wide-scaled, corporate corruptions and financial scandals in 2001 and 2002; the Sarbanes-Oxley Act [SOA], was passed in 2002 (O'Brien, 2006). Starting in 2004; The SOA required all publicly-traded companies to conduct and submit an annual report of the effectiveness of their internal accounting practices and daily operations to the Securities and Exchange Commission (O'Brien, 2006). Other provisions of the act were specific and applicable to nonprofit organizations. For example, in the 1990s, anything relating to corporate compliance, ethics, and compliance with all legal and regulatory requirements and standards were introduced in various CARF standards manuals, which by 2003 appeared in all of the organization's standards manuals and organizations directly or indirectly federally funded must conform to such corporate compliance standards.

Explaining Organizational Ethics

At its core, the heart of any effective corporate compliance ...

Solution Summary

The solution discusses health care organizations including GAAP, corporate compliance, and ethics.

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