Miss Mayuri Vekaria

Research project: Earnings management in NHS organisations

Abstract

NHS is the world's largest integrated healthcare system that aims to treat patients based on their need rather than their ability to pay. NHS England is facing one of its worst financial challenges due to high inflation rates, rising energy costs, elective care backlog, staff pay and ongoing Covid costs are among the several causes of significant cost pressures on NHS organisations. With providing good quality healthcare, free at point of use, remaining accountable for public funds, meeting statutory obligations and requirements to report budget breakeven, the management of NHS organisations face immense pressure. These pressures can lead to earnings management practices to be adopted, in order to report favorable financial results. However, altering financial statements can significantly affect resource allocation and contracts with suppliers and partners. This study investigates the use of earnings management in NHS financial reporting and the extent to which it can affect user decisions.