Statements of Position



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The AICPA's Hospital Audit Guide presently calls for combined financial reporting for related organizations if "significant resources or operations of a hospital . . . are handled by such organizations and they . . . are under the control of (or common control with) hospitals. . . ." However, the guide does not give any guidance about or explanation of what constitutes "control" or "hospital resources." As a consequence, a variety of reporting practices are being followed in identical or similar circumstances. The financial statements of some related organizations are combined with those of hospitals, while the financial statements of others in similar circumstances are not. The related facts and circumstances are sometimes disclosed and sometimes not. Concerns are expressed that new organizations are being created and existing organizations arc being modified in a manner designed to overshadow the substance of the relationship and to avoid the requirements for combined financial statements. In these circumstances, the subcommittee believes that the Hospital Audit Guide should be modified to give more guidance in this increasingly important and complex area. Furthermore, since funds held in trust for the; benefit of hospitals by independent organizations are similar in many respects to resources held by hospital related organizations and to endowment and other restricted funds held by hospitals, the subcommittee believes it is necessary to reconsider financial reporting for funds held in trust by others for the benefit of hospitals.

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Relational Format



Charitable uses, trusts, and foundations -- Accounting; Hospitals -- Accounting


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Proposed statement of position on modification of reporting practices relating to hospital related organizations and funds held in trust by others;Modification of reporting practices relating to hospital related organizations and funds held in trust by others; Exposure draft (American Institute of Certified Public Accountants), 1978, Feb. 10



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