It provides high level of care to the patients for recovery from conditions like stroke, orthopaedic and neurological disorders, brain injury, spinal cord injury, cardiac and pulmonary conditions. HealthSouth Corporation was found to be involved in corporate accounting scandal. The Founder, who was also the Chairman and CEO of the company, was accused of influencing the employees to manipulate the figures in the financial statement and exaggerate the earnings for meeting the expectations of the stockholders. He was the first executive to be caught in the Sarbanes Oxley Act for manipulating the financial returns of the company (Will, Handelman, & Brotherton, 2012). Richard M. Scrushy was accused of conspiracy, money laundering charges, securities fraud and charges of overstating the company’s earnings by approximately $ 3 billion (Forbes, 2013). The federal investigators stated that the company intentionally overstated the earnings in the financial statement for meeting the estimates of the analysts. At the same time the company had to make efforts to hide the accounting fraud attempt from auditors. Now, the question that was raised was whether the auditors failed in finding the fraud activity or they overlooked the company’s fraud. SOX Regulations in Public Healthcare Organizations There are strict regulations imposed by the SOX Act on the public companies (Greene, 2009). It includes: Creation of Public Company Accounting Oversight Board for overseeing the entire process of accounting of the organizations. Limitation in the types of services that will be provided by the accounting firms to the public companies (clients). Increase in the disclosure requirements for the public companies. Requirement of top executives in the public companies who will take the responsibility of all the contents in the financial statements. Requirement of excellent analysts for disclosing the probable conflicts of interest. Added rigorous punishments for various misdeeds and frauds. These provisions have been imposed to public companies for controlling the regulations of corporate governance and business ethics. This will prohibit them from violating the GAAP rules and manipulating the financial statements of the companies for their own benefit. SOX Regulations in For-Profit and Not-For-Profit Healthcare Organizations There has been increase in the scrutiny for both for-profit as well as not-for-profit organizations by the regulators, donors, bondholders and the rest of the external stakeholders. It is because there have been an increased suspicion among the investors and other external stakeholders about the proper maintenance of corporate governance and business ethics in the healthcare organizations. It has been found that for Not-For-Profit companies including the hospitals as well as other different healthcare organizations, there have not been very strict disclosure requirements as mandated in case of the public For-Profit organizations. This is a problem faced by the bondholders, investors and other stakeholders who want to judge the quality of corporate governance and management in these Not-For-Profit organiz
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Accounting and Auditing Enforcement Name of the of the Professor University Date Table of Contents Table of Contents 2 Introduction 3 SOX Regulations in Public Healthcare Organizations 4 SOX Regulations in For-Profit and Not-For-Profit Healthcare Organizations 4 SEC Investigation 6 The Role of HealthSouth Corporation’s Auditors 8 SOX Regulations 8 Recommendations 9 References 10 Introduction The public healthcare company that have been chosen in this study is HealthSouth Corporation…
The SOX act of 2002, an abbreviation of Sarbanes-Oxley Act, is an accountancy law that set new laws and enhanced standards for all public company boards within the United States, its management, as well as the firms in public accountancy.
n, have been adopted by over 100 countries across the globe and now even the United States, which previously adopted Generally Accepted Accounting Principles or GAAP, are considering the adoption of IFRS as their reporting standards across the country. (Deloitte, 2009)
On top of shortening the lead-time, it has also improved overall accuracy and efficiency of the delivered information. Its biggest impact on accounting in the past five years has been the ability of organizations to
The size of the scandal was about $ 1.7 billion (Sophie, 2013). It was done by manipulating figures at the time of acquisition of a British medical equipment firm. Olympus paid around one third of the price as consulting fees. The entire fraud was done to
Therefore, it is essential to review the information required for the perpetual alignment of the business operations with the underlying altering market needs especially within a business environment where even small companies face the effects of the
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