Study of Financial Accounting System of Heat Exchanger Fabricator Inc

Topics: Balance sheet, Generally Accepted Accounting Principles, Financial ratio Pages: 66 (20077 words) Published: January 22, 2013
Chapter I


1. Background of the Study
The progress of men has been continuously evolving from many years ago since they first populated the world. The use of different primitive tools from stone, bone, ivory and wood proves that knowledge and skill already exist; and that were the inherent tools of men. As time goes by, these knowledge and skill are endlessly developing that led to the progress and innovation of the human race and their resources. As progress sets in and men became competent and skilled, a focus on core businesses arises and thus gave way to the dawn of the Manpower industry. Abraham Lincoln once quoted that “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration,” having said that, manpower is the lifeline of businesses and industries that cannot be neglected. It captures the importance of groups that assume collective responsibility for performing a set of tasks and in this case the labor industry, a sector that the Philippines is superior, both in the domestic and international market. No business can flourish without taking good care of human capital though complicated and problematic it may be. Every industry and business is in need of human labor that can never be replaced by automation and machineries; and even machineries and automation cannot perform its function without the human touch. Manpower business is a growing industry that covers recruitment, outsourcing (permanent or temporary), employee assessment and selection, training, outplacement and consulting. Big and medium sized companies are helped by the manpower agencies to concentrate on its core business activities that eventually result to raising productivity, improved quality, efficiency and cost reduction across the entire business cycle. And in the same scope, the manpower companies have became experts in promoting conscientious, determined and loyal workforce. Consequently, I had chosen this sector with focus on the importance of the agency and the financial accounting of Heat Exchanger Fabricator Inc. , a local manpower service industry that provides the support to manufacturing operation and other services such as maintenance, janitorial, warehousing and other related services. Good governance and accounting system of every industry are vital part of its “good housekeeping” activities that can lead to its overall success, productivity, social responsiveness, green environment and revenue. 2. Review of Related Literature

To help the researcher explore deeper into this study, related literature and publications would be taken into consideration and presented as may deem appropriate, namely: International and local articles about accounting information system and management information system And lastly, the internet which has abundant information on various subjects would be looked into. 3.1. Foreign Studies

Service industry such as Manpower commonly deals with services or labour of employees which are the means of revenue of the enterprise. The need for well-established policies and system is essential for the company to support their transactions and procedures that would enable for an efficient and effective organization. According to a study of nature and security of accounting information systems: Case of Hampton Roads, Virginia mentions that the purpose of accounting was to report accurate financial information on business ventures to interested parties and to provide information on stewardship of assets. The very development of double entry accounting was specifically aimed at controlling errors. It gives room for carelessness of people and inaccuracy of information to its users. All accounting information systems such as from the service industry form of controls are required...
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