Auditing in Healthcare Organizations: Essay Sample on Financial Performance and Assurance

Introduction

The success of an organization is highly bounded on its auditing system, which forms the base for financial performance. Through auditing, third parts are informed and assured of financial management in an organization. Like other organizations, health centers need to conduct regular auditing to determine its financial performance in accordance with output (Egusquiza, 2008). Engaging both internal and external audits provide a more precious way of providing financial information. In an external audit, Bend Clinic is required to hire an independent accountant who will conduct an analysis and provide a fair financial statement in accordance with company performance (Egusquiza, 2008). The process provides health supporters with an assurance that all financial activities are conducted in a fairway (Bostan, 2016). In an internal audit, the health center should have an accountant who assesses the performance in accordance with the standards, policies, and metrics of the organization (Poulymenopoulou et al., 2013). In this case, an internal audit evaluates and provides an independent assurance regarding the internal company performance. As such, internal audits assist an organization in dealing with some minor aspects, thus improving its survival and success (Bostan, 2016). As such, both audits differ on the base that internal audit focuses on issues related to healthcare business practices and hazards, whereas external audit concentrates on financial record and provide their option regarding the financial statement.

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Despite both the internal and external audits having some differences, there numerous aspects that clearly illustrate their similarities, especially on how there are performed. Firstly, both audits carry out testing routines, whereby they analyze the financial performance of an organization (Matos et al., 2015). As such, they examine and evaluate the nature of transactions an organization conducts to determine how money is distributed (Poulymenopoulou et al., 2013). Additionally, both audits rely on the organization system as they seek active cooperation in all levels of analysis (Egusquiza, 2008). Furthermore, the audits are conducted in a formal manner, which is based on professional disciples, and hence, it much follows expert standards.

Like any other approach, auditing is guided by regulations and rules. As such, auditors are required to observe and comply with the laws and principles before conducting the process. On the bases of standards, the audit is required to acquire sufficient and appropriate information, which has a direct influence on the determination of materials amount and disclosures in the financial statements (Matos et al., 2015). Additionally, an auditor is required to follow the procedures in accordance with the health financial law. As such, the law requires the auditor to engage in a fair process, thus avoiding issues such as conflict of interests, which impact the nature of disclosure (Bostan, 2016). Both internal and external auditors should have a professional background in accounting, which effectively assists in analyzing all health financial information.

Healthcare Audit Data

In a revenue cycle audit, an auditor examines the data on the gross profit margin, and the amount of development the health center has experienced a particular period. In this case, the auditor in the health center should examine the account receivable to determine the financial performance of the health center (Matos et al., 2015). Additionally, the revenue cycle audits examine the health center cash flow to determine its future performance (Bostan, 2016). The approach assists in determining the maximum capacity the health center may engage, thus avoiding activities that may subject it to financial stress due to overspending.

On the financial report provided by the health center, there are numerous components of account receivable. The unpaid balance is a component of account receivable, which represents the amount the health center owes other parties (Matos et al., 2015). The unpaid balance is divided based on the sections of the days the services were provided (Bostan, 2016). Additionally, services provided in another crucial component of the account receivable. The report indicates different services that the health center received at a given price by different groups (Egusquiza, 2008). The percentage illustration provides a clear indication of the amount owed by the organization at different levels.

When determining which data is appropriate for benchmarking, it is crucial to consider administration and management stability. The metric determines the foundation components of a firm that defines the quality of services provided. The financial level is another crucial aspect that determines the data for benchmarking as it illustrates the capability of a firm to perform in a particular market (Matos et al., 2015). As such, finance acts as a standard system that regulates the kind of services to engage (Poulymenopoulou et al., 2013). Additionally, the expected outcome is another crucial aspect that impacts the kind of data to use for benchmarking. In this case, the outcome impact the behaviors and thinking that an organization deploys when comparing the performance (Bostan, 2016). The effectiveness of the application of benchmark elements is another crucial aspect that influences the kind of data to use. These elements impact the quality of the benchmark report, and this impacts its definition and illustration of the data (Egusquiza, 2008). Additionally, the validity of the data is another crucial aspect that an organization must consider. Therefore, the information to use for the process should have been collected from the right channels. The approach promotes the accuracy and precious data, thus providing a clear way of explaining the data.

When working with benchmark data, it is crucial to consider numerous aspects that guide in setting the parameters. The size of the data is a crucial aspect that guides the setting of parameters as it illustrates the conceptual approaches that are supposed to be used during the benchmarking process (Matos et al., 2015). Cost is another crucial aspect that the researcher is supposed to consider before setting the program as it influences the nature of data to deploy (Bostan, 2016). In most cases, organizations embrace a cost-effective approach by application of aspects such as computer-based technologies. Performance measurement is another crucial aspect that should deter the setting of parameters (Egusquiza, 2008). In this case, the kind of evaluation approach that will be deployed in the program should determine the nature of data to use.

Healthcare Audit Billing Compliance

As an approach to improving the efficiency of the billing compliance plan, it is crucial to focus on the code of conduct. The component should guide the staff on what they are supposed to do to comply with the rule and regulations (Matos et al., 2015). Training is another crucial element that provides skills and knowledge on how to implement and evaluate the program (Poulymenopoulou et al., 2013). Through training, it is easier for an organization to identify the corrective action toward the plan (Bostan, 2016). Additionally, it is essential to focus on cultural compliance, which makes the approach more practical as they accommodate different groups. In the health center, the billing compliance plan ensures that clinical services are effectively document based on their code bill (Bostan, 2016). As such, it is easier for health management to effectively follow various programs within the health center.

References

Bostan, I. (2016). Investigating the effectiveness of programs on health financing based on audit procedures. Iranian journal of public health, 45(8), 1074. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5139965/

Egusquiza, D. (2008). Understanding the internal auditing of the revenue cycle. Idaho L. Rev., 44, 455.

Matos, K., Heimer, F.E., Martin, C.A., Michalski, R.R., Roach, D., & Teplitzk, S.V, (2015). Practical guidance for health care governing boards on compliance oversight.

Poulymenopoulou, M., Papakonstantinou, D., Malamateniou, F., Prentza, A., & Vassilacopoulos, G. (2013, June). A conceptual security framework for personal health records (PHRs). In ICIMTH (pp. 129-131).