Audit and Accounting Guide: Health Care Entities, 2018

Considered the industry's standard resource, this guide helps accountants and financial managers understand the complexities of the specialized accounting and regulatory requirements of the health care industry. Updated for 2018, this edition has been prepared and reviewed by industry experts and provides hands-on, practical guidance for those who work in and with health care entities. A critical resource for auditors, this edition includes new accounting standards and relevant GASB and FASB updates (including those related to private companies).

Updates include:
FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606)
FASB ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities
FASB ASU No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities
SAS No. 133, Auditor Involvement With Exempt Offering Documents
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (and Certain Issues Related to OPEB Plan Reporting)
GASB No. 83, Certain Asset Retirement Obligations

List of contents

1 Overview and Unique Considerations of Health Care Entities 01-13

Purpose 01

Applicability 02-06

Classification of Health Care Entities 07-08

Regulatory Environment 09-13

Health Care Reform 12-13

2 General Auditing Considerations 01-119

Overview 01-02

An Audit of Financial Statements 03-09

Audit Risk 05-09

Terms of Engagement 10-14

Business Associate Agreements 14

Audit Planning 15-18

Group Audits 19-24

Multi-Location Audits Versus Group Audits 23

Complex Transactions 24

Materiality 25-30

Performance Materiality 29-30

Qualitative Aspects of Materiality 31-32

Use of Assertions in Assessment of Risks of Material Misstatement 33-34

Risk Assessment Procedures 35-57

Risk Assessment Procedures and Related Activities 37-43

The Entity and Its Environment 44-57

Additional Audit Considerations 58-99

Analytical Procedures 58-59

Accounting Estimates 60-62

Transactions Processed by Service Organizations 63-66

Compliance With Laws and Regulations 67-77

Going-Concern Considerations 78-92

Written Representations 93-99

Independent Auditor's Reports 100-102

Single Audit Act and Related Audit Considerations 103-109

Statutory Reporting Considerations for Health Plans 110-119

Risk-Based Capital Requirements 114-115

Deficiencies in Internal Control 116

Communicating Internal Control Matters in an Audit 117

Communications With Regulators 118-119

3 Unique Financial Statement Considerations for Not-for-Profit Business-Oriented Health Care Entities 01-43

Complete Set of Financial Statements 02-05

Balance Sheet 06-08

Statement of Operations 09-28

Performance Indicator 12-17

Other Intermediate Subtotals 18-20

Discontinued Operations and Accounting Changes 21-22

Revenues 23-25

Expenses 26-28

Statement of Changes in Net Assets (or Equity) 29-32

Statement of Cash Flows 33-37

Notes to the Financial Statements 38

Subsequent Events 39-41

Example Financial Statements 42-43

4 Cash, Cash Equivalents, and Investments 01-75

Cash and Cash Equivalents 01-11

Centralized Cash Management Arrangements 03-06

Cash From Restricted Donations 07

Other Restricted or Designated Cash Amounts 08-11

Investments 12-73

Fair Value Option 17-22

Investments in Debt Securities and Certain Equity Securities With a Readily Determinable Fair Value That Are Not Recorded Under the Fair Value Option 23-35

Investments in Certain Other Financial Instruments Without a Readily Determinable Fair Value That Are Not Recorded Under the Fair Value Option 36-38

Investment Pools 39-47

Fair Value Measurements 48

Impairment of Investments 49-59

Securities Lending Activities 60

Transfers of Assets to an NFP or Charitable Trust for Investment 61-63

Regulation 64

Other Financial Statement Presentation Matters 65-73

Auditing 74-75

5 Derivatives 01-44

Introduction 01-05

General Guidance 06-07

Accounting for Changes in Fair Value of Derivative Instruments 08-12

Fair Value Hedges 09

Cash Flow Hedges 10-11

Derivatives Not Designated as a Hedging Instrument 12

Hedge Accounting Requirements 13-28

Shortcut Method 20-28

Hybrid Instruments, Host Contracts, and Embedded Derivatives 29-37

Calls and Puts in Debt 33-34

Derivatives Embedded in Split-Interest Agreements 35-37

Other Matters 38-43

Changes in Fair Value of Hedged Item 38

Termination of Cash Flow Hedge by Debt Extinguishment 39

Additional Presentation and Disclosure Requirements for NFP Business-Oriented Health Care Entities 40-43

Auditing 44

6 Property and Equipment and Other Assets 01-53

Overview 01-05

Capitalized Interest 06-11

Supplies, Rebates, and Discounts 12-13

Lessee Involvement in Fixed Asset Construction14-17

Asset Retirement and Environmental Remediation Obligations 18-20

Impairment or Disposal 21-31

Discontinued Operations 28-31

Nonreciprocal Transfers 32-34

Other Long-L

About the author

Founded in 1887, the American Institute of Certified Public Accountants (AICPA) represents the CPA and accounting profession nationally and globally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations. The AICPA develops standards for audits of private companies and other services by CPAs; provides educational guidance materials to its members; develops and grades the Uniform CPA Examination; and monitors and enforces compliance with the accounting profession's technical and ethical standards.
The AICPA's founding established accountancy as a profession distinguished by rigorous educational requirements, high professional standards, a strict code of professional ethics, a licensing status and a commitment to serving the public interest.

Summary

Considered the industry's standard resource, this guide helps accountants and financial managers understand the complexities of the specialized accounting and regulatory requirements of the health care industry. Updated for 2018, this edition has been prepared and reviewed by industry experts and provides hands-on, practical guidance for those who work in and with health care entities. A critical resource for auditors, this edition includes new accounting standards and relevant GASB and FASB updates (including those related to private companies).

Updates include:
* FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606)
* FASB ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities
* FASB ASU No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities
* SAS No. 133, Auditor Involvement With Exempt Offering Documents
* GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (and Certain Issues Related to OPEB Plan Reporting)
* GASB No. 83, Certain Asset Retirement Obligations

Product details

• Authors: AICPA
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Paperback / Softback
• Released: 31.12.2018
• EAN: 9781948306157
• ISBN: 978-1-948306-15-7
• No. of pages: 720
• Series: AICPA Audit and Accounting Gui; AICPA; AICPA Audit and Accounting Guide; AICPA Audit and Accounting Gui
• Subject: Social sciences, law, business > Business > Business administration