HealthSouth

HealthSouth was what seemed to be an ordinary striving medical business. Some would even say it was the most successful in its field , but unlike other corporations, it had a foul secret. All the grand success that HealthSouth was known for was a lie, a mask to hide what was going on behind the scene, hidden from the public eye. A secret so well hidden, that it went unnoticed for years. A secret so large it broke not only the law but several accounting principles. It was the rise and fall of the largest and most victorious corporation in the Health Care Corporate Field; the HealthSouth scandal. During the years 1996 to 2003 it was proven that the American corporation HealthSouth led by its CEO, Richard Scrushy, inflated and created more than…

Spire Rehabilitation Hospital is a joint venture hospital with HealthSouth and West Tennessee Health Care. The hospital will be operated by HealthSouth and all employees will be under the HealthSouth umbrella and adopting the HealthSouth mission and vision statements. HealthSouth’s mission is to be the healthcare company of choice for patients, employees, physicians, and shareholders by providing high quality care in the communities we serve. HealthSouth’s vision is to make diversity a core…

HealthSouth is a public company who has been registered under Section 12 of the Securities Exchange Act of 1934 (Title 15, United States Code, Section 781) and is required to file periodic financial reports under Section 13(a) of the Securities Exchange Act of 1934 (Title 15, United States Code, Sections 78m(a) and 78o(d)). In preparing its income statement, HealthSouth deducted the contractual adjustment from its gross revenues to get net revenues, which were reported in the periodic financial…

After HealthSouth publicly became a traded company, their earnings were being escalated falsely. Management was under a huge amount of stress because they did not meet the standards of their business financially. When the company reported their earnings, they overstated them purposely. It fell under, “Income Before Income Taxes.” (Zmuda). Falling under the motivation of the fraud triangle, their sole motive was to meet their financial needs. Since they did not, between the years of 1999 and 2002…

HealthSouth has a robust Human Resource department and invests in human capital. Being a large organization we have the capability to execute many programs that benefit our customer satisfaction, and train employees to manage difficult situations. One such program is our CPR initiative. The CPR program objectives are to build and sustain the communication skills of all HealthSouth employees with a focus on the values of comfort, professionalism, and respect. HealthSouth has a program called…

The ethical climate at HealthSouth seems to be the ends justify the means. There was a culture of making the numbers at all costs. This focus on the numbers permeated the accounting decisions made at HealthSouth, “Decisions are not made in a vacuum, but in the context of organizational relationships and expectations for behavior.” (Mintz, p. 95) This tone at the top filtered down throughout the accounting organization and made individuals more likely to participate in the fraud that was…

Problem Overview HealthSouth’s former leadership engaged in unethical behavior has placed the company and its stakeholders in a position that has impacted the company’s future viability. The following analysis will provide an understanding of the negative behavior that caused the issues currently faced by HealthSouth and recommendations on the changes necessary to correct the course of the company. Analysis Idealized Influence The leadership by HealthSouth’s founder and former leader, Richard…

initial national chain of orthopedic hospitals and outpatient centers in the United States called HealthSouth[x1]. Later in 1996, the company was found out perpetrated by its executives of accounting fraud around 2.7 billion US dollars behind the fast growth during the years. This is due to the demand of increasing the stock price and meeting analyst expectations that unintentionally put the pressures on the company’s CEOs to continuously leverage its growth. With the supported environment,…

Post-acute healthcare includes rehabilitation or palliative services that beneficiaries receive after, or in some cases instead of, a stay in an acute care hospital. (MedPAC, 2017) The services HealthSouth offers range from home nursing, personal care, childcare, allied health services or home health care. HealthSouth Corporation publicly traded and is one of the nation’s largest providers of post-acute healthcare services. (Hamilton, 2012) HealthSouth was involved in a corporate accounting…

In 1999, Richard Scrushy overstated HealthSouth’s earnings by at least $1.4 billion in order exceed the expectations of Wall Street earnings. During this time investors and lenders were more concerned with revenue than profits. Generally Accepted Accounting Principles (GAAP), stated if policies and procedures were not violated then they are considered legal, and ethically adequate. This allowed HealthSouth to meet expectations of analyst for 40 consecutive quarters, by using creative and…