As an office manager of a physician clinic, you may experience fraud from a variety of sources. Internal controls help reduce the risk of these fraudulent events.
Accounting scandals and fraud, both in the United States and internationally, have ignited the debate over current laws, regulations, and accounting principles. The relative merits of generally accepted accounting principles (GAAP), a rules-based approach to accounting, and International Financial Reporting Standards (IFRS), a principles-based approach, have been under scrutiny. Recently, the Financial Accounting Standards Board (FASB) announced that it intends to introduce more principles-based standards to improve general accounting principles and practices.
Respond to the following:
• What are the primary factors that contribute to fraudulent activity?
• Consider the difference between fraud and abuse.
• Identify a real-world example of a fraudulent event in health care.
• What happened in your chosen example and what could be the legal ramifications?
• Which internal controls failed to address your chosen example? Explain.
