healthcare environment
Respond to your classmates below in regard to the Enron case and how they explained how the case can be used as a training tool in the healthcare environment. Use the textbook for all four class responses and use the library resource for the first two classmate responses ONLY nothing else!!!! Focus on Chapter 1,7, and 8 for all four responses.
Þ Epstein, L. & Schneider, A. (2014). Accounting for Health Care Professionals [Electronic version]. Retrieved from https://content.ashford.edu/
Þ Giroux, G. (2008). What Went Wrong? Accounting Fraud and Lessons from the Recent. Scandals Social Research. Vol. 75(4), p1205-1238. Retrieve from http://eds.a.ebscohost.com.proxy-library.ashford.edu/eds/pdfviewer/pdfviewer?vid=7&sid=72202a65-776c-4e6e-aa39-6740198c145c%40sessionmgr4008
1. 100 words.Falsified accounting procedures is a dangerous game to play that can ultimately be the downfall of a company. Having these falsified accounts can make a company look good on paper (favorable profitability analysis), thus making them more attractive to future investors. This was part of the scandal that Enron was involved in. Financial analysts always rated Enron as a strong buy, encouraging people to buy more stock in the company. At its peak, Enron stock shares were selling for $90 a share. Once Enron declared bankruptcy, thousands of employees lost their jobs and retirement funds. Top executives did not. “Despite the total collapse, many of the executives would cash out their options and be paid additional millions” (Giroux, G., 2008, Page 5). Towards the end, the shares were $1. I think that many stockholders saw the high price of shares at Enron’s peak and so they also wanted to invest. But once the shares started selling for less and less, it was obvious that the company was not doing as well as they had let on.
I think that one of the lessons to be learned from Enron is to stick with what you know and not take on too many additional enterprises without thorough knowledge of the area. This cost them huge amounts of money that they had to cover up. “Enron acquired other companies to move into electric utilities, finance, risk management, and, toward the end, a telecommunications company. Why is not easily explained; Enron had not any experience in any of these areas” (Giroux, G., 2008, Page 15). Most of these additional enterprises were not successful and properly thought out. There are so many different branches of healthcare and a healthcare corporation could be risking a lot by sticking their hands into too many different pots. Shannon
2. 100 words. The Enron Corporation established in 1985 following a merger between a Houston Natural Gas Company and Omaha-based InterNorth Incorporated. Between the late 1990s and early 2000 Enron was considered one of the world’s biggest energy businesses located in Texas. By late 2000, Enron began to face some financial difficulties. It was reported that the company leadership uses Mark-Market instead of regular accounting methods to falsifying documents and to mislead regulators of the company’s real asset and net worth. At its best in August 2000, Enron stocks were trading at over $90 and a market value of about $70 billion with revenue of over $100 billion (Giroux, 2008, p. 1208). Eventually, the company collapse and file for chapter 11 bankruptcy in 2001. Enron Financial statement manipulation was unethical and not only affected the company and its shareholders but employees as well. Enron leadership uses the mark-to-market accounting method to record the current market price of an asset or a liability on financial statements. The healthcare environment can use Enron as an example to better training its staff on the outcome of a Falsified accounting document and how it can ultimately affect the company and the legal implication for doing so. Falsifying accounting procedures can also hurt the company and its shareholders in Enron’s case leadership falsifying the company accounting led to the dismantling of the company. Stephany
Respond to your classmates below in regard to comparing the advantages and disadvantages of organization forms. Include why most large public health care organizations use the corporate form?
3.100 words..There are three different types of organization forms, those are; sole proprietorship, partnership, and corporation. A sole proprietorship is a business with one owner, this is leaving all the responsibility on the owner. It is easy to form a business with only one owner; however, it does make it harder to transfer the business to someone else. A partnership is a business that has two or more owners. Those owners are all responsible for the business. If the business endures hardship, all the owners will feel those effects and vice versa. The last is a corporation, there are different types of corporations; such a for-profit and non-profit. A corporation releases the owners from any liability of the business. Corporations are easily transferable.
Large health care organizations choose corporations for a number of reasons. At the top of that list would be little to no liability for owners and that they are easily transferable. Many large public health care organizations are bought and sold several times. There are also tax breaks for corporations that do not apply to sole proprietors or partnerships. From employee taxes to double taxations on the business itself and the tax on dividends to stockholders. COLE
4.100 words..There are many different organizational forms used got healthcare organizations. Four of the main business structures are sole proprietorship, partnership, corporation and LLC. Sole proprietorship normally has one owner. In most businesses sole proprietorship’s are responsible for their own everything. They require small responsibilities such as handles their own debt and owning certification of business names which can be done at local courthouses for a small fee and same day services. Partnership is a organizational form that merges together multiple parties. Usually their co-owners for the most part without any legal action that needs to take place. This type of organizational form is quite rare in the healthcare field in today’s time because each partnership is held accountable for one another’s actions. Corporation is another organizational form. In my opinion, most healthcare organizations use this form because it cannot exist unless certain rules take place. As stated from, Accounting for Healthcare Professionals, Epstein, L. & Schneider, A., 2014,”it permits otherwise unaffiliated persons to join together in mutual ownership of a business. Funds can be accumulated and concentrated into one organization. Most corporations allow shareholders to vote in proportion to their shares, with one vote per share.” The way the rules are set up for this organization makes it fair for every individual involved. LLC, limited liability companies are similar to corporation because it provides a protection of liability. The only key that LLC holds over other organizational forms is that their legal and accounting needs are not as expensive. WILSON