HFMA test 5: Internal Control with Correct Solutions 2024

HFMA test 5: Internal Control with Correct Solutions 2024 Administrative controls are characterized by: - Answer -Administrative Controls Administrative controls are characterized by: An organizational plan leading to management's authorization. Assigned responsibility for achieving organizational goals. A starting point for accounting controls. Sarbanes-Oxley Act of 2002 (SOX) This act was established to: - Answer -Sarbanes-Oxley Act of 2002 (SOX) This act was established to: Regulate corporate governance. Help prevent future abuses. Restore public faith in federal oversight of public company governance. SOX primarily applies to public companies, but has two exceptions that address all companies: - Answer - SOX primarily applies to public companies, but has two exceptions that address all companies:Whistleblower----SOX offers protections for those who report suspected illegal corporate activities (otherwise known as whistleblowers).Intentional retaliation against a whistleblower could result in fines and up to 10 years of imprisonment. Document Destruction---SOX Section 802 amended federal laws to provide for fines and possible imprisonment of up to 20 years if an individual:Knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record or document with intention to impede, obstruct, or influence a federal governmental agency or department investigation SOX and Not-for-Profit - Answer -SOX and Not-for-Profits SOX is not mandatory for not-for-profits, with the exception of the Whistleblower and Document Destruction provisions. However, external lenders and the public will expect not-for-profit entities to demonstrate effective governance, internal controls, and provide transparency of its operations. It is in best interest for not-for-profit entities to consider complying with many SOX provisions. SOX & NP Hospital - Answer -Not-for-Profit Hospitals Not-for-profit hospitals are well advised to examine their own best practices to ensure that they can do the following: 1) Justify their tax-exempt status more clearly. 2) Review executive compensation. 3) Assess membership on boards and committees. 4) Increase awareness of finances and financial controls. 5) Evaluate compliance with certification requirements