Discuss about the Healthy Hospital for Modern Medical System.
Information system provides an attractive opportunity for dishonest employee in sensitive job position to develop and implement fraudulent schemes. Many different types of technical information scheme can be implemented to control this situation to occur and detect the errors. In some case employee plays an important role in development process to improving the system. The internal auditor with strong information system can specify the problem and correct the areas of the conflict. Healthy Hospital is a large hospital located in San Francisco, California, USA. Established in 1912, affiliated with prominent university and medical school, and developed a mile stone in excellent reputation for women and child hospital. Hospital consists of 340 in bed patient, with 420 physicians in medical staff department. It has estimated in 2010 with a budget of $ 250 M and total assets amounted to $ 300 M., the hospital provides all kinds of medical supports to the greater San Fransico Community (Levi, 2013).
Healthy Hospital is an organized operating system where is maintains unified audit practice with effective knowledge and capacity to high rate of business development. The hospital has two Certified Information System Auditors; it has all facilities of modern medical system with critical care, home health care and ambulatory. However for last few years it has increased its profit with modified account system and audit policies, which prevents in protecting the safety and security of the records. Moreover the admin & accounts staffs are working day and night to make the process more effectively the Hospital reaches successful venture. It has enable the vender to more alert to provide the best quality of services to offer them. Example can be cited to prove the use of effective business measures to its internal and external associate is use of Key Accounting System AS/400 and TANDEM software application program (Chäfer et al., 2010).
As we know each and every organization wants get success in account of business terms. It can only be possible if there is a unified account and audit process for growth and development of the firm. Similarly Health Hospital has adopted some measures to prevent the fraudulent and get the accounts corrected in systematic manner. The incident can be described to make the process more prominent like use of strong background of investigation and involved sensitive departments (i.e., Admin, Accounts, and Finance & IT). During the routine audit process the Finance or Accounts Manager exercise its knowledge and skills to develop the process of accounting. In addition to that several other accounting policies can be implemented for internal checks and controls, like sample techniques, surveys and even in depth reviews of the books of accounts with practices and policies laid by the accounting system in the audit format. Moreover the reviews of account payable, account receivables, Human Resource Management policies are also taken into account while dealing with this process (Teece, 2010).
Matt Harris was from the very beginning was eager, curious and personable to work for Healthy Hospital, he was very clever to built a good relation with his senior management ,so quickly hired as temporary accounts payable clerk. Being a temporary clerk Matt Harris as one independent contractor. As a normal process HH paid all its contractors and suppliers through account payable module of its financial information system. As time progressed Matt Harris was absorbed as full time staff. Although Matt was not working a temporary staff and was not treated as an independent contractor, his accounts payable details was not deleted he started to use undue advantages of fringed benefits (e.g. health insurance, vacation pay, disability insurance) and regular paychecks, which were process through oracle (Lokanan, 2014).
Apart from Harris, Track Downs, Elinor Linz & Steven Jones were held accountable for this fraud as his independent contractor accounts was not deleted due to negligence and moreover Track Downs had taken Harris as temporary staffs without any interviewing any other else or even request for any background check or investigation. At the same time being an assistant account payable manager Elinor Linz who had serious worked for a long time in Healthy Hospital had committed a mistake without any intention paved a way of missapproation of accounting which caused huge set back to the Healthy Hearth. In other hand if proper verification of checks, copies of report, information system reports, and cash disbursement reports can be check in regular interval the problem can be solved at the beginning.
In this context Internal Audit Manager can play a vital role in improving this situation by his knowledge and skills. In this particular case as an Audit Manager one should be always ready with solution with verification of books of accounts, all relevant data related to cash, credit and even debtors .Even it should be kept in mind the audit manager will have keep eye on day to day transaction of accounts, banking details and every entries done on the accounting packages. It will be really good if one should exercise the practice of regular accounting and weekly plan of audit, review the books on daily, weekly and monthly basis. Effective feedback session can be kept on regular basis where the working of the staffs will be analyzed on weekly basis. Apart from this other policies can be implemented by using third party vender where each and every book of accounts will be verified and audited on monthly basis, where frauds, errors and misappropriation of accounts will be detected and solved with immediate effect. It will result a good effect on the accounting process (Zwaan et al., 2011).
Audit is accounting process where it recognizes the facts and figures pertaining to books of accounts. It is a continuous process which follows the rules of Companies Act. It mainly highlights the gray areas of accounts where frauds and errors can be proved by the evidence of sufficient materials which can effective opinion with fair and true views (Bentley et al., 2013).
Prevention of error and fraud is a responsibility of the management. As an auditor can help the management in drawing attention to the weakness in the internal control system and suggest remedial measures. The reporting on the degree of reliability of financial statement is the main objective of auditing, detection and prevention of frauds and errors is only the secondary objective. However the main objective of audit is to ensure extent in specified circumstances. The auditor can be appointed for evaluating efficiently of various operation procedures or to check the property of the transaction or to examine the adherence of policies and procedures. Audit becoming social orientation day by day as it measures the performance of the business and thereby helps the society in the following ways, like utilization of the resources available and using it in systematic way. It enhances quality, improvement and safe guard the interest of the people associated with. Accelerate fair trade practice and pollution control, advancement in efficiency & productivity with broad outlook. Some typical methods of auditing are vouching, depreciation, Reserve & surplus and verification and valuation of assets and liabilities (George & Buyse, 2015).
As going through the passage one thing is clear Healthy Hospital had huge name and fame in health field with all resources available at one shot with qualified and experienced staffs, but one was clear the error occurred by simple mistake only by mere negligence. The problem can be eliminated only by presence of mind, say for example a temporary staff who had been working as independent contractor has its vender accounts with company, but later one he was absorbed as permanent staff ,then it was the duty of the accounts executive to delete the account.
At the same it is ensure that the company should check and verify the staffs before they are boarded and proper interview process will be conducted for better understanding. In this particular case the situation was troubling and people were involved in the matter, making mark in the brand. Due to fraud several questions were raised with functioning of the Finance Department, Financial policies, and human resource policies and above all the Information system. In a nut shell the effective solution can be involved by ensuing the books of account should be audited on regular basis based on Cash Books, MIS, Bank details and above all effective accounting policies. One the frauds are detected it is necessary to make certain policies which can be followed to eliminate the problem only be implementing proper sets of legal procedure, verify the books of accounts ,using sampling theory and updating the books on regular basis, improve internal control and checks, governance and protection against future fraudulent activities (Sait, 2013).
The auditor plays a vital role in verification of accounts while coordinating with regular visit to its clients ensuring the efficiency of the books are updated on regular intervals. In the same note it is mandatory that the Annual Reports are generated at the end of the financial year a par the company law. Mostly it is seen that capital loss are being enquired the company it is the prime duty of the auditor to create policy where the gap can be minimized ensuring better result. Continuous audit can be done with company for safety and security measures.
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