Reference no: EM13763286

1. Why is it important that financial accounting systems report performance fairly and factually? What would happen if they did not?

2. I agree that financial accounting system reports are for external use and that if they are not fair and factual this could result in consequences for the company providing the reports (Baker & Baker, 2011). In this course we will be working primarily with publicly traded companies, e.g. companies that you can purchase stock in. In these instances, the shareholders, potential shareholders, and the US Securities and Exchange Commission (SEC) receives theses reports as well as other third parties. Because of this, the financial accounting system reports must adhere to the generally accepted accounting principles (GAAP) while the managerial accounting system reports are not held to the same standard. Do you see this as a strength or weakness?

3. Here's something to consider: The generally accepted accounting principles (GAAP) constrain what can be published in a financial report. This means that you cannot include cost or revenue driver information in financial accounting system reports. In contrast, managers may need to understand what is driving the costs or revenue internally - metrics such as occupied beds, number of surgeries, etc. For this reason, managerial accounting system reports are allowed to vary from GAAP. What do you think of this?

4. In this week's reading Baker and Baker (2011) make a very clear distinction between managerial and financial accounting. In my experience, it is managerial accounting that would be used to support a company's decisions as these are the reports that are used to manage the internal finances of the company (Baker & Baker, 2011). In your posting you seem to include both types of accounting along with clear reasons that managerial accounting reports need to be fair and factual. Given the difference audience for financial accounting reports why too must they be fair and factual?

5. In this learning assignment Baker and Baker (2011) outline two very different types of accounting systems. In your posting it seems as though you are referring to a managerial accounting system rather than a financial accounting system. In my experience, the reporting from a financial accounting system is developed for external recipients rather than for the company itself. How might this change in audience alter your response?

6. How do different departments in a hospital receive financial information?

7. How is financial information shared among departments where you work?

8. Based on your readings or your own personal experience, how do different departments in a hospital receive financial information?