You are on page 1of 136

University of Perpetual Help System DALTA

Las Piñas Campus

RISK MANAGEMENT ON FRAUD DETECTION AND PREVENTION


OF COFFEE SHOPS IN LAS PIÑAS CITY

Bueron, Louise Jill S.


Galvez, Glennizze M.
Rovillos, Kenneth Martin D.
Rubillar, Patricia Nicole T.
Sabater, Liezel E.

A Thesis Presented to the


College of Business and Accountancy
University of Perpetual Help System DALTA
In Partial Fulfillment
Of the Requirements for the Degree

Bachelor of Science in Accounting Technology

Las Piñas City


2018

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

CHAPTER 1

INTRODUCTION

Risk is something every organization deals with, even if it is uncertain as to

whether or not it will happen. To avert this from taking place, countermeasures will

be needed; this is where risk management comes in. Risk management is about

understanding the nature of such events, where they represent threats, and making

positive plans to mitigate them (Chartered Institute of Management Accountants,

2008). Risk management entails forecasting and evaluating possible risks and

coming up with ways on how to minimize the impact of it on the business. Fraud

happens to fall under the scope of risks that businesses face, as it is also uncertain as

to when this could happen. Fraud denotes a false representation of an important fact

made by an individual to another individual with the intention of deceit (Hall, 2011).

As a preventive measure against fraud it is important that the business implements

fraud prevention and detection methods to avoid, if not lessen the chances of

fraudulent acts from happening. Fraud prevention includes informing the company

on how to handle fraud, supporting the supervision of preventive controls or

suggesting when such controls are ineffective, and also testing procedures which

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

ensures adequate operations of preventive controls and their results (Dimitrijevicet

al., 2015). While fraud detection involves the process of minimizing the probability

and intensities of risks by intelligently analyzing the vast records on individual as

well as business transactions.

A vast majority of coffee shops, not just in Las Piñas City, have adopted the

practice of staying open up until the wee hours of the night; this puts a lot of

responsibility on the employees that are assigned on those shifts and demands a lot

of trust from the employers as well. Even if they are working within the normal

working hours, they still have to live up to the business owner’s faith and

confidence in them. Yet some cases of deceit may still occur within the organization:

one of these may include fraud. This study will help the selected coffee shops,

specifically those within Las Piñas City, since it is closer to our campus and we are

familiar with the location, assess the types of frauds the company may experience

and the extent of how they utilize their risk management and how effective it is in

terms of fraud detection and prevention; by means of surveillance, monitoring, IT

control, physical control, accounting records, risk assessment, segregation of duties,

supervision, and independent verification.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

BACKGROUND OF THE STUDY

Several coffee shops have been established around our campus and it’s no

secret as to why this has been a growing trend. For those needing their caffeine fix

either to re-energize from a long day or to stay up finishing some school project;

coffee shops may be considered as overpriced for majority of us students who are

on a budget and can instead opt for another one of those convenient 3-in-1 coffee

sachets but still students lounge around in coffee shops during their leisure time.

Aside from the obvious promise of free Wi-Fi, coffee shops have been considered

as a place for socializing, a place to spend leisure time with friends and it has been

claimed that the ambience of coffee shops encourages productivity (Nguyen, 2013).

As Accounting Technology students we were curious to know as to how they handle

fraud in terms of detection and prevention , how they operate on managing these

risks, policies they implement with regards to risk. Risk management aids in

determining and analyzing the risks throughout the course of business operations

for the purpose of minimizing them from occurring in the future, detecting the

possible risks and providing a coherent basis for better decision making, and

providing steps on how to manage and create solutions for it. In this case, fraud is

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

one of the risks that falls under the scope of risk management, as there is no

guarantee that it would happen but there is a possibility that it could; hence the need

to take countermeasures in avoiding it. Moreover, it also helps in analyzing the

status of the risks, the vulnerability of their fraud preventive measures and how to

develop their approach on this matter.

In 2011, a study was conducted that analyzed fraud risk assessment and

management. The purpose of this study, as described by the author, was to describe

and evaluate the historical trends of the fraud management in organizations. The

argument raised by the study was that today’s fraud risk management importance is

different because it involves not only detection, but also fraud prevention (Powell,

2011). The role of risk management on fraud is not just a one-time implementation,

instead a continuous process. Based on the outcome of the research, we would then

endorse constant development methods with regards to the risk management

strategy. In which it encompasses an even measurement of where the businesses is

and where it wants to be in terms of effectively preventing, detecting, and deterring

fraud (Deloitte, 2011).

The purpose of this study is to know the relevance of risk management in

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

fraud prevention and detection; it aims to know what and how the existing practices

are being implemented in the selected coffee shops of Las Piñas City, the frequency

of their risk management practices and how to improve in these areas.

OPERATIONAL FRAMEWORK

This conceptual framework shows the inputs and outputs of the study, with the

aid of the data obtained from the respondents in the questionnaires, we can assess

the demographic profile, types of fraud and the extent of practice used in the risk

management of fraud detection and prevention of the selected coffee shops. After

analyzing the necessary data we will evaluate the efficiency and effectivity of the

businesses’ fraud detective and preventive measures against fraud by means of risk

management and how to maintain the effective practices and to identify in which

aspect requires improvement and provide possible solutions.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Demographic profile of
Types of fraud
selected coffee shops

Risk Management

Fraud Detection

Fraud Prevention

Risk management for Risk management for


fraud detection fraud prevention
 Segregation of
 Surveillance Duties
 Monitoring  Supervision
 IT Control  Independent
 Physical Control Verification
 Accounting
Records
 Risk Assessment

With the aid of a descriptive survey we will obtain necessary data for our

research. For instance, on what types of fraud are the selected coffee shops subject

to experience, these include: asset misappropriation, vendor fraud, accounting fraud,

and payroll fraud. We would then assess the extent of their risk management for

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

fraud detection in terms of surveillance, monitoring, IT control, physical control,

accounting records and risk assessment. Another assessment would be on the extent

of their risk management for fraud prevention in terms of segregation of duties,

supervision, and independent verification.

STATEMENT OF THE PROBLEM

The purpose of this research study is to assess the risk management on fraud

detection and prevention of selected coffee shops in Las Piñas City. Specifically, it

aims to answer the following questions:

1.) To know the profile of the selected coffee shops based on their:

a) Years of existence

b) Annual income

c) Number of employees

2.) To know the types of fraud the business is may have experienced in terms

of:

a) Asset misappropriation

b) Vendor fraud

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

c) Accounting fraud

d) Payroll fraud

3.) To know the extent of the practices of risk management for fraud detection

that is being implemented by the selected coffee shops based on:

a) Surveillance

b) Monitoring

c) IT control

d) Physical control

e) Accounting records

f) Risk assessment

4.) To know the extent of the practices of risk management for fraud prevention

that is being implemented by the selected coffee shops based on:

a) Segregation of duties

b) Supervision

c) Independent verification

5.) To know the significant difference in the extent of the practices of risk

management for fraud detection when grouped according to the profile.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

6.) To know if there is a significant difference in the extent of the practices of

risk management for fraud prevention when grouped according to the

profile.

OBJECTIVES OF THE STUDY

The researchers consider the following as the objectives:

1.) To determine what is the demographic profile of the selected coffee shops in

terms of:

a) Years of existence

b) Annual income

c) Number of employees

d) Fraud experience

2.) To determine what type of fraud did the company encountered in terms of:

a) Asset misappropriation

b) Vendor fraud

c) Accounting fraud

d) Payroll fraud

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

3.) To determine as to what frequency of the following risk management for

fraud detection is being practiced in terms of:

a) Surveillance

b) Monitoring

c) IT control

d) Physical control

e) Accounting records

f) Risk assessment

4.) To determine as to what frequency of the following risk management for

fraud prevention is being practiced in terms of:

a) Segregation of duties

b) Supervision

c) Independent verification

5.) To determine if there is a significant difference in the frequency of the

practices of risk management for fraud detection when grouped according to

the profile.

6.) To determine if there is a significant difference in the frequency of the

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

practices of risk management for fraud prevention when grouped according

to the profile.

HYPOTHESIS

Based on the research objectives and questions, the hypotheses have been

developed as followed:

Null hypothesis (H01): There is no significant difference in extent of the

practices of risk management for fraud detection when grouped according to the

profile.

Alternative hypothesis (Ha1): There is a significant difference in the extent of

the practices of risk management for fraud detection when grouped according to the

profile.

Null hypothesis (H02): There is no significant difference in the extent of the

practices of risk management for fraud prevention when grouped according to the

profile.

Alternative hypothesis (Ha2): There is a significant difference in the extent of

the practices of risk management for fraud prevention when grouped according to

the profile.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

SCOPE AND LIMITATION

The limitation of our study is the consistency of the result of this research that is

limited to the respondent's personal thoughts and insights with relation to their

management. The scope of the study is the personnel working in coffee shops in

Las Piñas. For each of the aforementioned coffee shops there will be approximately

3 respondents each, resulting in a total of 30 respondents. For the purpose this

research we will be using a descriptive research as it is used to describe a

population with respect to important variables. With regards to the sensitivity of this

study that involves business policies and practices, we adopted the use of

quantitative data collection methods since this is easier to present, summarize, and

compare. Our study adopted the non-probability sampling type, specifically random

sampling.

SIGNIFICANCE OF THE STUDY

The significance of the study is to be able to improve risk management so that

fraud will be detected and prevented and to provide possible solutions. Those who

will benefit from this study include:

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

A. The owners of the selected coffee shops. This is beneficial for the owners to

know the status of how the business is in terms of safeguarding it from any

potential loss, by the evaluation of how well their risk management is and

how effective it is in preventing and detecting fraud, and to be able to avoid

it from recurring in the future.

B. The management of the selected coffee shops. This is beneficial for the

management so that they can pinpoint or reevaluate on any overlooked or

ineffective practices in fraud prevention, reassess how well they manage

their risks and to provide solutions on how to improve.

C. Potential investors. This is beneficial for the potential investors because

given the chance that they invest in certain businesses, particularly in coffee

shops, they will be informed of the appropriate risk management that needs

to be carried out for the purpose of avoiding the chances of fraud from

happening in a business; the various possible kinds of frauds the business

could experience and ways to prevent it. This increases their confidence in

the business in hindering or minimizing the possibility of fraudulent acts

from taking place.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

D. Customers. This is beneficial for the customers of the aforementioned coffee

shops because they can be rest assured that the said coffee shops have

undergone an investigation or study that involves their fraud risk

management, and they can have the confidence to know that the

organizations are assessed with better risk management and business

practices.

E. Students. This is beneficial for the students because it provides relevant

information regarding risk management and how this influences the

prevention and detection of fraud, but particularly in selected coffee shops,

it can be used as a reference when it comes to further studies on the related

topics.

F. Future researchers. This is beneficial for the future researchers who desire to

further this study and create a more in-depth or updated research on this

matter.

DEFINITION OF TERMS

Accounting fraud. Accounting fraud is intentional manipulation of financial

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

statements to create a facade of a company's financial health. It includes falsifying

financial statements by overstating its revenue or assets, not recording expenses and

under-recording liabilities.

Accounting records. These are certain information about a business, and each

is used for a different purpose, but each type is also linked to another record in your

set of financial statements.

Asset misappropriation. It is a kind of fraud that encompasses creating false

invoices or manipulating accounts, false expense claims, stealing information, or

any kind of deception for personal gain.

Fraud. This essentially involves using deception to dishonestly make a

personal gain for oneself and/or create a loss for another. The term commonly

includes activities such as theft, corruption, conspiracy, embezzlement, money

laundering, bribery and extortion.

Fraud detection. It refers to the act or process of discovering, finding or

noticing deception such as theft, corruption, conspiracy, embezzlement, money

laundering, bribery and extortion from occurring in an organization.

Fraud prevention. It refers to the act or practice of trying to stop deception

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

such as theft, corruption, conspiracy, embezzlement, money laundering, bribery and

extortion from occurring in an organization.

Independent verification. This is to make sure the employees are following

the rules and not shortcutting internal controls. Internal control verification analyzes

internal accounting controls.

IT control. It is a procedure or policy that provides a reasonable assurance that

the information technology (IT) used by an organization operates as intended, that

data is reliable and that the organization is in compliance with applicable laws and

regulations.

Monitoring. It is performed through application of both ongoing evaluations

and separate evaluations. The internal control system needs to be capable of

determining that the controls in place are relevant and effective in addressing new

risks. A monitoring process must be capable of addressing the need for revisions in

the design of controls based on changing risk. For this study, this is the process by

which the quality of internal control design and operation can be assessed. This may

be accomplished by separate procedures or by ongoing activities.

Payroll fraud. It is the theft of cash from a business via the payroll processing

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

system.

Physical control. This refers to the controlling of physical access such as the

obvious practice of locking doors, desks, and file cabinets so that unauthorized

personnel cannot gain access.

Risk. It refers to any basic damages that happen to a company’s resources.

This can be quite an extensive list. In fact, throughout the course of normal business

operations most companies will encounter many different types of risk.

Risk assessment. It is a thorough look at the workplace to identify those things,

situations, processes, etc. that may cause harm, particularly to people. After

identification is made, you analyze and evaluate how likely and severe the risk is,

followed by deciding on what measures should be in place to effectively eliminate

or control the harm from happening.

Risk management. It is the process of assessing the risks involved with a

company or firm’s business practices.

Segregation of duties. It is much more difficult to commit fraud, since at least

two people must work together to do so - which is far less likely than if one person

is responsible for all aspects of an accounting transaction. For this study, this is the

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

allocation of tasks to different individuals to avoid the chances of altering business

operations without the knowledge of the owner or management.

Supervision. Supervision is giving employees specific instructions on what is

to be done, monitoring their efforts and holding them accountable for specific

results.

Surveillance. This focuses on individuals, buildings and properties, or vehicles

deemed suspicious on the basis of credible information that they are connected in

some way to illegal or otherwise inappropriate activity. Surveillance operations

carried out involve recording of events, locations, days or times, and patterns of

behaviours or activities. For this study, surveillance is the process of recording or

watching over the behaviour of a group of individuals and how they operate during

business hours.

Vendor fraud. It involves fraud schemes in which the fraudster manipulates

a company’s accounts payable and payment systems for illegal personal gain.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

CHAPTER 2

RELATED LITERATURE

2.1 Introduction

This chapter reviews the definitions and expounds more information about the

variables of our research, it provides existing knowledge of literature on risk

management, fraud prevention and fraud detection. It provides an overview of the

probable influences these have on the selected coffee shops in Las Piñas and the

research gap in fraud risk prevention and detection.

2.1.1 Risk Management

Risk is the main cause of uncertainty in any organization, Thus, companies

increasingly focus more on identifying risks and managing them before they even

affect the business. The ability to manage risk will help companies act more

confidently on future business decisions. Their knowledge of the risks they are

facing will give them various options on how to deal with potential problems

(Mutetwa, 2015). Although it might seem like a classless topic, its principles and

concepts however are crucial to the survival of your business. Successful risk

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

management affords a small business an opportunity to thrive, grow and ultimately

enjoy the fruits of success (Brokerage, 2013).

2.1.2 Types of Risk Management

There are various types of risks that a business will experience but this study

focused on specific types which are: operational risk, compliance risk, and

reputational risk.

Operational risk is the potential of failures related to the day-to-day operations

of an organization such as a customer service process. Some definitions of

operational risk claim that it is the result of insufficient or failed processes.

However, even operational processes that are deemed to be competent and

successful also has the possibility of generating risk (Spacey, 2015). It summarizes

the risks a company shoulders when it tries to operate within a given field or

industry. Operational risk is the risk not essential in financial, systematic or

market-wide risk. It is the risk remaining after determining financing and systematic

risk, and includes risks resulting from breakdowns in internal procedures, people

and systems (Investopedia, 2018).

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Compliance risk is the potential for losses and legal penalties due to failure to

comply with laws or regulations. In many cases, businesses that fully intend to

comply with the law still have compliance risks due to the possibility of

management failures (Spacey, 2015).

Reputational risk is the chance of losses due to a declining reputation as a result

of practices or incidents that are perceived as dishonest, disrespectful or

incompetent. The term tends to be used to describe the risk of a serious loss of

confidence in an organization rather than a minor decline in reputation (Spacey,

2015). It is a threat or danger to the good name or standing of a business or entity.

Reputational risk can occur through a number of ways: directly as the result of the

actions of the company itself; indirectly due to the actions of an employee or

employees; or indirectly related through other peripheral parties. In addition to

having good governance practices and transparency, companies need to be socially

responsible and environmentally conscious to avoid or minimize reputational risk

(Investopedia, 2018).

2.1.3 Methods or Techniques of Risk Management

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

There are four techniques of risk management namely: avoidance, reduction,

transfer, and acceptance.

Avoidance is one of the easiest ways to mitigate risk is to put a stop to any

activities that might put your business in jeopardy. However it's crucial to

remember that with nothing ventured comes nothing gained, and therefore this is

often not a realistic option for many businesses (Elders Insurance, 2013).

Avoidance is when you have the option not to take on the risk by avoiding the

actions that cause the risk (Spacey, 2015).

Reduction is the second risk management technique, essentially, taking the

steps required to minimize the potential that an incident will occur. If the cost of

risk reduction outweighs the potential cost of an incident occurring, you will need

to decide whether it is really worthwhile (Elders Insurance, 2013).

Transfer is one of the best methods of risk management, it is transferring that

risk to another party. It is a realistic approach to risk management as it accepts that

sometimes incidents do occur, yet ensures that your business will be prepared to

cope with the impact of that in the event that it would actually happen (Elders

Insurance, 2013).

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Acceptance involves weathering the impact of an event. This option is often

chosen by those who consider the cost of risk transfer or reduction to be excessive

or unnecessary (Elders Insurance, 2013).

2.1.4 Effects of Poor Risk Management

These are the effects of poor risk management: poor user adoption, unrealized

benefits, late-running project, overspent budgets, and unhappy clients.

Poor user adoption refers to the process of getting your team members to

actually follow a procedure, use the tools you have delegated and stick to the

methodology. If they don’t do this, you’ll have poor results because your colleagues

are not working to a standard, best practice way of managing risk (Ten Six, 2017) .

In unrealized benefits, risks can kill a project’s benefits overnight, or they could

be slowly eaten away through inefficient management practices. When your team

isn’t working efficiently, every additional admin task adds cost and time to your

project, which in turn has an impact on how quickly your benefits can be delivered

(Ten Six, 2017) .

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Late-running projects means delays happen when risk management activities

take longer than you expected and they push out other activities on the project

schedule (Ten Six, 2017) .

Overspent budgets is a setback because risk management costs money.

However, the cost of dealing with a risk if it materializes and becomes a real issue

for your business, is usually cost more than expected (Ten Six, 2017).

Unhappy clients is another disadvantage of poor risk management because

clients don’t want to be involved in something that is perceived to be a high risk.

They need to know what you are doing to mitigate any potential threats and that

you’ve got a sensible alternative plan just in case (Ten Six, 2017).

2.2.1 Fraud

Fraud is an issue that is dealt with by various organizations regardless of the

size, industry or country. As long as the organization possesses property that is of

value such as cash, goods, information or services; then fraud may be attempted

(Accountants, 2008).

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

There is no specific reason as to why fraud occurs, but there are factors as to

why this happens, this can be throroughly illustrated using the fraud triangle. The

fraud triangle is built on the assumption that the possible combination of factors that

results to fraud are situational pressure, opportunity and ethics (Hall, 2011).

● Situational pressure refers to the burden of physical or mental distress that

results from various situations that leads an individual to commit a criminal

act. These pressures could include financial constraints, debts, alcohol or

drug addiction, etc. (Brumell Group, 2015). For instance an employee who

is struggling with money problems made tend to go to extreme lengths just

to escape that situation.

● Opportunity, as stated in the Merriam-Webster dictionary, is an amount of

time or a situation in which something can be done. In cases like these, the

individual wouldn't have been able to commit fraud if it weren't for a

momentary chance that allowed them to accomplish such an act, with

minimal possibility of them being caught.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

For instance when an employee who happens to be struggling with money problems

is left unattended with the cash register or the safe where the company's daily

revenue is kept.

● Ethics the moral fitness of a decision, course of action, etc. So when a

person has a blurred moral compass of what is right or wrong then tend to

make unwise decisions.

We all know that fraud is a crime which is deceiving or misrepresenting

documents, files and etc. We must avoid, stop and prevent it for the business to

continue the operation and lasts longer.

2.2.4 Types of Fraud

The truth of the matter is that no business is exempted from the possibility of

fraud. In order to detect and prevent fraud from happening it is also vital to be

aware of and have a clear understanding of the various types of fraud that could

take place in their business.

2.2.4.1 Asset Misappropriation

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Asset misappropriation is the most common fraud scheme which assets are

either directly or indirectly diverted to the fraudster’s benefit (Hall, 2011). Simply,

it’s the theft of company assets by an employee, also known as insider fraud.

Asset misappropriation schemes include check tampering and forgery,

inventory theft, cash theft, service theft, expense account fraud, procurement fraud,

worker’s compensation fraud, and commission fraud (Lomer, 2017).

In check tampering, it occurs when an employee physically manipulates checks

so that they can be deposited into a bank account under his control. This could

involve forgery, altering payee information, or issuing inappropriate manual checks

(Bush, 2017), whereas check forgery is when the signature of the drawer is copied

without his consent or knowledge. Inventory theft is when an employee steals

products from the company. Cash theft and service theft are pretty much

self-explanatory; these involve the actual stealing of cash and stealing services

intended for business purposes for personal gain by misusing company-funded

services (Lomer, 2017).

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Under expense account fraud, this is where the employee either forges receipts

by altering or inflating the supposed amount of the expense, or using falsing

submitting receipts that personal expenses but claim that they are business-related

(Lomer, 2017).

Procurement fraud includes schemes such as over-ordering product then

returning some and pocketing the refund, purchase order fraud where the employee

sets up a phantom vendor account into which are paid fraudulent invoices, or

initiating the purchase of goods for personal use (Lomer, 2017).

In workers’ compensation fraud, an employee exaggerates injuries or a

disability, invents injuries that did not occur or attributes injuries that occurred

outside of the work environment to work to receive compensation pay (Lomer,

2017).

In commission fraud, an employee inflates sales numbers to receive higher

commissions, falsifies sales that did not occur or colludes with customers to record

and collect commissions on falsified sales (Lomer, 2017).

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

2.2.4.2 Vendor Fraud

Vendor fraud involves fraud schemes in which the fraudster manipulates a

company’s accounts payable and payment systems for illegal personal gain (Bush,

2017). This type of fraud can also be committed by vendors on their own.

Examples of vendor fraud are billing schemes, bribery and kickbacks (Lomer,

2017).

In a billing scheme, an employee generates false payments to himself/herself

using the company’s vendor payment system either by creating a fictitious vendor

or by manipulating the account of an existing vendor.

In bribery and kickbacks, an employee participates in a bribery scheme when

he or she accepts (or asks for) payments from a vendor in exchange for an

advantage.

2.2.4.3 Accounting Fraud

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

An employee who manipulates a company’s accounts to cover up theft or uses

the company’s accounts payable and receivable to steal commits accounting fraud

(Lomer, 2017).

Employees involved in these types of fraud are generally those in positions that

have access to a company’s accounts with little or no oversight. Accounting fraud

includes embezzlement, accounts payable fraud, fake supplier and personal

purchases (Lomer, 2017). Embezzlement, also called larceny, this is any fraud

conducted by a person who controls the funds being used or someone who has

access to the company’s monetary resources. Accounts payable fraud is among the

most damaging for affected businesses. It’s also among the easiest frauds to

perpetrate, since most of the money leaving a company legitimately goes through

the accounts payable function.

The scheme of a fake supplier happens when an employee sets up a fake

supplier or vendor and bills the company for good or services not provided another

kind of fraud is when an employee uses company funds to pay for personal

purchases and records the payments as legitimate business expenses in the

accounting system.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

2.2.4.4 Payroll Fraud

Payroll fraud is a theft by means of a company’s payroll system and it is also

one of the most common types of employee fraud (Bragg, 2018). Payroll fraud

schemes include: timesheet fraud and pay check theft (Lomer, 2017).

Timesheet fraud is when an employee alters the details on his or her timesheet

in order to increase his or her wages, whereas the pay check theft involves an

employee getting the pay check of a fellow employee and cashing it out claiming

that it is the formers without the consent or knowledge of the latter (Lomer, 2017).

2.3.1 Fraud Prevention

Fraud prevention is the first line of defense in minimizing fraud risk.

Prevention is typically the most cost-effective component of a fraud risk

management system because it poses barriers to fraud, deters fraud, and can

eliminate the need for costly investigations (Crain, 2018)

Prevention is the first line of defense in the control structure. Preventive

controls are passive techniques designed to reduce the frequency of occurrence of

undesirable events. Preventive controls force compliance with prescribed or desired

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

actions and thus screen out abnormal events. When designing internal control

systems, an ounce of prevention is most certainly worth a pound of cure. Preventing

errors and fraud is far more cost-effective than detecting and correcting problems

after they occur. The vast majority of undesirable events can be blocked at this first

level. For example, a well designed source document is an example of a preventive

control. The logical layout of the document into zones that contain specific data,

such as customer name, address, items sold, and quantity, forces the clerk to enter

the necessary data. The source documents can therefore prevent necessary data

from being omitted. However, not all problems can be anticipated and prevented

(Hall, 2011).

2.4.1 Fraud Detection

Even if certain fraud prevention takes place, it isn’t a guarantee that fraud can

completely be avoided; therefore a highly effective fraud detection system must be

in place to detect frauds as they occur (Crain, 2018).

As with all other components of the fraud risk management system, fraud

detection processes and techniques must be carefully documented for most

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

desirable results. Documentation should generally exist for all detection controls

and processes and should specifically exist for monitoring processes and results; for

testing procedures used to assess controls; and for the roles and responsibilities that

support fraud detection.

Continuous monitoring of fraud detection is essential. The organization should

develop ongoing monitoring and measurements to evaluate, remedy, and improve

the organization’s fraud prevention and detection techniques.

Detective controls form the second line of defense. These are devices,

techniques, and procedures designed to identify and expose undesirable events that

evade preventive controls. Detective controls reveal specific types of errors by

comparing actual occurrences to pre-established standards. When the detective

control identifies a departure from standard, it sounds an alarm to attract attention to

the problem (Hall, 2011) .

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

2.1.5 Methods and Approaches of Fraud Detection and Prevention

These are the methods commonly used to detect and prevent fraud: risk

management, monitoring, IT controls, physical controls, transaction authorization,

segregation of duties, supervision, accounting records and indepedent verification.

Risk assessment is used to identify, analyze, and manage risks relevant to

financial reporting (Hall, 2011). It is the process of evaluating the risk resulting

from a hazard (Costard, 2008).

Monitoring is the process by which the quality of internal control design and

operation can be assessed. This may be accomplished by separate procedures or by

ongoing activities (Hall, 2011). This is conducted after a program has begun and

continues throughout the program implementation period. It is sometimes referred

to as process, performance or formative evaluation (Gage & Melissa, 2009) .

IT controls relate specifically to the computer environment (Hall, 2011). IT

controls are procedures, policies and activities that are conducted to meet IT

objectives, manage risks, comply with regulations and conform to standards

(Spacey, 2016) .

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Physical Control relates primarily to the human activities employed in

accounting systems. These activities may be purely manual, such as the physical

custody of assets, or they may involve the physical use of computers to record

transactions or update accounts (Hall, 2011). Physical access control limits access

to buildings, rooms, areas and IT assets, logical access control limits connections to

computer networks, system files and data (Scheafer, 2017) .

Transaction Authorization is to ensure that all material transactions processed

by the information system are valid and will be counterchecked by the management

before being approved (Hall, 2011).

Segregation of Duties can take many forms, depending on the specific duties to

be controlled (Hall, 2011) . It is the assignment of various steps in a process to

different people that the intent behind doing so is to eliminate instances in which

someone could engage in theft or other fraudulent activities by hindering them from

having an excessive amount of control over a process. As for the segregation of

duties it split the general functions through the physical custody of an asset, record

keeping for an asset and also the authorization to acquire of asset (Bragg, 2018).

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Supervision in small organizations or in functional areas that lack sufficient

personnel, management must compensate for the absence of segregation controls

with close supervision. For this reason, supervision is often called a compensating

control (Hall, 2011). It is being responsible in assisting the business process owner

on setting up business process disorder and ensure the effective and efficiency

practices being applied within the operation (Danone, 2018). As of the fraud

prevention supervisor job description it includes details about being able to lead

cross-functional drives in order to discover fraud and prevent it from happening.

This will include a lot of research of data, as well as documenting procedures which

may currently have an impact on fraud (Education Career, 2014).

Accounting records of an organization consist of source documents, journals,

and ledgers. These records capture the economic essence of transactions and

provide an audit trail of economic events (Hall, 2011). When there are unusual

differences in the accounting records, there are two possible reasons for the

discrepancy: error or fraud. An error is unintentional and often occurs due to

computer malfunction or human error, such as carelessness or lack of knowledge. In

contrast, fraud is intentionally committed in order to render some gain for the

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

perpetrator. The two means through which fraud is committed include the

misappropriation of assets and the misrepresentation of financial statements

(Kennedy, 2012).

Independent verification is the quality of information the accounting

information system generates impacts management’s ability to take actions and

make decisions in connection with the organization’s operations and to prepare

reliable financial statements (Hall, 2011).

2.6.1 Effects of Poor Fraud Detection and Prevention

These are the effects of poor fraud detection and prevention: failure of

detection and prevention leads to financial loses, negative impact on the business’

reputation, and lack of preventive measures.

A research study published by the Association of Certified Fraud Examiners

(ACFE) in 2008 estimates losses from fraud and abuse to be seven percent of

annual revenues. The actual cost of fraud is, however, difficult to quantify for a

number of reasons: not all fraud is detected; of that detected, not all is reported; in

many fraud cases, incomplete information is gathered; information is not properly

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

distributed to management or law enforcement authorities; and too often, business

organizations decide to take no civil or criminal action against the perpetrators of

fraud. Which in turn shows that failure of detection and prevention does eventually

lead to financial loses.

Another effect of poor fraud detection and prevention involves negative

impact on the business’ reputation; not implementing proper fraud prevention

practices will result in lack of trust and confidence of your investors, customers and

auditors in your ability to control the fate of your business. The consequences of

large failures can impose financial, reputational, loyalty, and other brand-related

costs that will persist for a very long time. The cost of a fraud prevention program is

tiny compared to a major failure (Lowers, 2014).

Lack of preventive measures of fraud can lead to vulnerability to future

frauds that could go unnoticed by the businesses.

2.5 Synthesis

Companies must have sufficient knowledge of the risks they are facing to give

them various alternatives on how to deal with potential problems to be able to

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

detect and prevent fraud. There are various types of risks that a business will

experience but this study focused on specific types which are: operational risk,

compliance risk, and reputational risk. Fraud denotes a false representation of an

important fact made by an individual to another individual with the intention of

deceit. There is no specific reason as to why fraud occurs but there are three factors

that play a part in its occurrence: opportunity, situational pressure, and ethics. There

are vast examples of frauds that take place some of these examples include asset

misappropriation, payroll fraud, accounting fraud, and vendor fraud. Continuous

monitoring of fraud detection is essential. The organization should develop ongoing

monitoring and measurements to evaluate, remedy, and improve the organization’s

fraud prevention and detection techniques because even if certain fraud prevention

takes place, it isn’t a guarantee that fraud can completely be avoided; therefore a

highly effective fraud detection system must be in place to detect frauds as they

occur. In a certain practices on some fraud would be found and be able to prevail

from getting worsening in the operation of the company. Prevention is the first

line of defense in the control structure. Preventive controls are passive techniques

designed to reduce the frequency of occurrence of undesirable events. Preventing

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

errors and fraud is far more cost-effective than detecting and correcting problems

after they occur.

2.6 Gap Analysis

Based on the articles, related studies, books and other sources we’ve read, we have

come to realize that there is a wide variety of frauds that could easily go undetected

if the organization is not aware of such and doesn’t have any form of preventive

measurement to ensure that it doesn’t happen. We also realized that frauds don’t

just happen due to mere opportunity or because of the less likelihood of being

caught but it also involves a moral battle. Fraud is definitely something that can’t

completely be avoided but the chances of it from occurring can be minimized with

proper and effective practices of risk management that could be adopted or

implemented by a company. Hence the need to raise awareness about it to more

businesses to prevent the chances of fradulent acts from occurring. Based on the

research we made regarding fraud detection and prevention and risk management

practices in Las Pinas, we found out that there is very limited techniques or methods

being applied by the coffee shops within the vicinity, therefore we opted to further

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

assess and to evaluate the efficiency and effectivity of the businesses’ current fraud

detective and preventive measures against fraud by means of risk management and

how to maintain the effective practices and to identify in which aspect requires

improvement and provide possible solutions.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

CHAPTER 3

RESEARCH METHODOLOGY

3.1 Introduction

This chapter identifies the methodology for conducting this research. The

areas to be covered are research design, sampling population, sample size, sampling

method, data collection methods, data instruments, data gathering, and data

analysis.

3.2 Research Design

In our research, we are going to use descriptive research, in which it is used

to describe a population with respect to important variables (W.G. Zikmund, 2010).

It is concerned with the conditions or relationships that exist, opinions that are held,

processes that are going on, effects that are evident, or trends that are developing

(Prado et al., 2010). Due to the sensitivity of this study that involves business

policies and practices, we adopted the use of quantitative data collection methods as

it focuses on gathering numerical data and generalizing it across groups of people or

to explain a particular phenomenon (Babbie, 2010). This is chosen because

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

quantitative studies are usually easy to present, summarize, and compare. The way

you design and plan your research will have significant implications for the success

of your project. The methodology that you use underpins your entire project, and

flawed assumptions or flawed methodology will result in questionable integrity of

the results and may lead to biased results as well (Davies, 2013).

3.3 Sampling Design

3.3.1 Sample Population

The study population refers to the range of locations or places as to which

the organizations in this study are situated, these are the coffee shops particularly

located within the vicinity of Las Piñas City.

3.3.2 Sample Size

We, the researchers, chose one representative per coffee shops. They are of

no particular age, gender, race or ethnicity but are qualified as a respondent due to

their employment in the said coffee shops.

The sample size refers to the group of individuals or entities from which the

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

sample might be drawn (McLeod, 2014). For the purpose of this study, the chosen

respondents from each selected coffee shops would be the managers, supervisors,

accounting staff, and cashiers. We, the researchers, chose these particular personnel

for the following reasons:

Managers – since they are responsible for maximizing revenue and profit

opportunities for the business (Firth, 2017).

Supervisors – since they are the ones that are responsible the hiring, training,

supervising and terminating staff; in charge of the distribution of schedules of the

employees; overseeing if the operations live up to the standards of customer

satisfaction; and for budgeting and efficient resource utilization (Kokemuller,

2018).

Accounting staff - since they are primarily in charge of managing the payroll

and other necessary payments of the business (Lee, 2017).

Cashiers – since they are assigned to take customers’ payments and balancing

of books at the end of the business day (Lee, 2017).

3.3.3 Sampling Method

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

For the purpose of this study, the non-probability sampling type was adopted,

specifically purposive sampling. This type of sampling can be very useful in

situations when you need to reach a targeted sample quickly (Crossman, 2018). One

major advantage of purposive sampling is that it ensures that some information

from respondents that are difficult to locate and can be vital to the study can be

obtained (Prado et al., 2011).

3.7 Data Collection Sources

3.7.1 Primary Data

A primary data is an original data or information obtained directly by the

researchers who analyze the data and information. It is collected for the first time

since it has not been published before collection. This is more accurate since you

get the actual response and opinions of the respondents. The information is

expected to be unbiased since it will be collected and processed by the researchers

(Salkind, 2010). For the purpose of this study, we used survey questionnaires as

primary data.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

3.7.2 Secondary Data

A secondary data is simply data collected by someone else for some other

purpose (Salkind, 2010). In this research we used several accounting books that

focused on fraud, risk management, fraud prevention and detection. We also

derived information from online articles that expounds more on our topic.

3.8 Data Collection

3.8.1 Data Instrument

For the purpose of this study, a questionnaire was utilized because it provides a

relatively cheap, quick and efficient way of obtaining large amounts of information

from a large sample of people. Data can be collected relatively quickly because the

researchers would not need to be present when the questionnaires are completed

(McLeod, 2018). We adopted the in-house survey, wherein we actually approached

the said respondents in their workplace. The questionnaire consists of multiple

choice questions, meaning there are a selection of possible answers that they get to

choose from. This method was chosen because it would narrow down the answers

and would be easier to understand for the respondents.

Data collection is a way to describe a process of preparing and collection data

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

and it is an important aspect of any type of research study. Any inaccurate data

collection may lead to invalid result and affect result of study (UK Essays, 2017).

3.8.2 Data Gathering

The following steps are how the researchers gathering the necessary data:

1.) Adopt the questionnaire

2.) Distribution of the questionnaire

3.) Collection of data

4.) Data analysis

3.8.3 Data Analysis

Data analysis is a process used to transform, remodel and revise certain

information or data with a view to reach to a certain conclusion (Johnson, 2011).

Frequency means generally what frequency means everywhere: a count of how

often something occurred. This could be how many times an event happened, or

happened within a given time frame. It could be how often a continuous variable,

such as a stock price, was in a certain range in a given amount of time. It also

comes up in a statistical area dealing with the effects of time called time series

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

analysis. (Veenstra, 2017)

Descriptive research describes what is. It involves the description, recording,

analysis, and interpretation of the present nature, composition or processes of

phenomena. The focus is on prevailing conditions, or how a person, group, or thing

behaves or functions in the present. It often involves some type of comparison or

contrast. (Medel, 2014)

One-way ANOVA is a type of statistical test that compares the variance in the

group means within a sample whilst considering only one independent variable or

factor. It is a hypothesis-based test, meaning that it aims to evaluate multiple

mutually exclusive theories about our data. (Mackenzie, 2018)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

CHAPTER 4:

DATA ANALYSIS

4.1 Demographic Profile

Table 1.1 Years of Existence

Frequency Percent

1 More than 10 years 2 9.5

3 6-10 years 2 9.5

4 1-5 years 17 81

Total 21 100

Based on the table above majority of the coffee shops have existed for at least 1-5

years. This shows that most of the coffee shops in Las Piñas have just started out in

venturing in the coffee shop business. Coffee is enjoyed no matter what age, race or

background. In this day and age, a growing market of people who enjoy espresso

based drinks is increasing – and continues to remain a growing industry. In addition,

providing a welcoming social space for people in your community never really goes

out of style. Which explains why a lot of entrepreneurs have decided to start opening

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

up coffee shops over the past couple of years (10 BENEFITS OF STARTING A

COFFEE SHOP BUSINESS IN 2016, 2016)

Table 1.2 Annual Net Income

Frequency Percent

1 More than P300,000 5 23.8

3 P100,000-P300,000 3 14.3

4 Less than P100,000 13 61.9

Total 21 100

Based on the table above, 61.9% of the respondents have an annual net income of less

than P100,000, this is possibly due to the fact that majority of the coffee shops have

only started less than 1-5 years.

The café and bar industry is saturated with choice, so it can be hard, especially for a

new, small business, to stand out in an overcrowded market. The start-up cost

involved in opening up a café or bar is high because equipment, produce, and

licensing are all large and ongoing expenses (Tashia, 2015).You may say that you

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

are a very small business and cannot afford to have many employees (Williams,

2015)

Table 1.3 Number of Employees

Frequency Percent

4 More than 10 4 19

3 5 to 10 4 19

2 3 to 5 6 28.6

1 2 to 3 7 33.3

Total 21 100

Based on the table above majority of the coffee shops only have at least 2-3

employees, this is probably due to the fact that since the selected coffee shops have

just started their businesses and still have insufficient budget to provide salaries for

more employees, as they only have an annual net income of less than P100,000.

Small-scale businesses are typically faced by budget hurdles. They can’t employ

workers with the same level of skill at the required starter salaries, inhibiting their

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

ability to grow and offer the same quality of products and services to their

consumers as large businesses. (LaMarco, 2018)

4.2 Types of Fraud

Table 2.1 Asset Misappropriation

Frequency Percent

2 Worker's Compensation Fraud 2 9.5

6 Cash Theft 16 76.2

7 Inventory Theft 2 9.5

8 Check Tampering and Forgery 1 4.8

Total 21 100

Based on the table above most of the coffee shops have policies or practices against

these types of fraud, namely worker’s compensation fraud, cash theft, inventory theft,

and check tampering and forgery. They probably have experience these in the past

which made them implement policies against those types of fraud.

Most of the respondents have selected cash theft as the common type of fraud they

have experienced in terms of asset misappropriation. This could mean that the

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

selected coffee shops may not have experienced an instance where they didn’t have a

very secure method of keeping their cash, lack of supervision of superiors, and

possibly failed to segregate duties among the staff. (Lomer, 2017)

Table 2.2 Vendor Fraud

Frequency Percent

1 Others 1 4.8

2 Bribery and Kickbacks 2 9.5

3 Billing Schemes 18 85.7

Total 21 100

Based on the table above, majority of the coffee shops have policies or practices

against receiving counterfeit money, bribery and kickbacks, and billing schemes.

This could be because there have been cases of counterfeit money being distributed

and circulated, also some employees have the tendency to get a share of profit from

some suppliers, or some even go as far as to creating fictitious vendors in which the

orders will be paid for by the company without them knowing that it was all a ruse.

(Lomer, 2017)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Table 2.3 Accounting Fraud

Frequency Percent

2 Personal Purchases 1 4.8

3 Fake Supplier Fraud 9 42.9

4 Accounts Receivable Fraud 3 14.3

5 Accounts Payable Fraud 4 19

6 Embezzlement 4 19

Total 21 100

Based on the table above, majority of the coffee shops have policies or practices

against personal purchases, fake supplier fraud, accounts receivable fraud, accounts

payable fraud, and embezzlement. Especially in small businesses with only few

employees with less supervision, accounting fraud could take place. Financial

records could easily be altered, source documents could be tampered with, etc.

(Lomer, 2017)

Table 2.4 Payroll Fraud (B4)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Frequency Percent

2 Timesheet Fraud 11 52.4

3 Cash Advance Fraud 10 47.6

Total 21 100

Based on the table above, majority of the coffee shops have policies and practices

against timesheet fraud and cash advance fraud. Just like accounting fraud, if there is

lack of supervision and segregation of duties, it is easy to manipulate records such as

payroll. (Lomer, 2017)

4.3 Risk Management for Fraud Detection

Legend:

1.00-1.49 = Never (Not practiced)

1.50-2.49 = Rarely (Poorly practiced)

2.50-3.49 = Often (Moderately practiced)

3.50-4.00 = Always (Highly practiced)

Descriptives

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Standard Verbal
Fraud Detection Practice Mean
Deviation Interpretation

Positioning CCTVs within the Highly


3.71 0.900
premises practiced

Viewing or utilizing the use of


Highly
the CCTV footage on a 3.62 0.810
practiced
scheduled basis

Allowing authorized people to


Moderately
handle and check the monitoring 3.48 1.120
practiced
of the CCTVs

Verifying the authenticity of the


supplier by checking the Highly
3.81 0.402
important details before making practiced
a purchase

Counterchecking if the
inventory received reflects what Highly
3.9 0.301
is stated in the source documents practiced
(receipts, order forms, etc.)

Conducting unannounced visits


by the management to check if Highly
3.57 0.870
the standards of business practiced
operations are being met

Restricting access to company 3.48 0.928 Moderately


proprietary information to only

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

those who have authorized practiced


access and need it in the course
of their job

Securing passwords for


databases or any important files Highly
3.71 0.784
or documents saved in practiced
computers

Setting up controls in the


computer system that will alert
Moderately
management if there are 3.19 1.123
practiced
unauthorized attempts of
accessing important documents

Having a software that alerts


Moderately
management of suspicious 2.57 1.128
practiced
activity on a company network

Practicing regular inventory Highly


3.67 0.730
checks practiced

Consistently counterchecking
for the invoice of the inventory Highly
3.62 0.740
bought if it matches the actual practiced
inventory count

Disposing of confidential
information properly, by Moderately
3.1 1.136
shredding documents and practiced
completely removing printed

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

data from electronic devices


before redeploying or exposing
of them

Keeping the cash and checks in


a locked cabinet or safe that can Highly
3.76 0.700
only be accessed by authorized practiced
or assigned personnel

Assigning a trusted outside


contractor to review and Moderately
3.33 1.017
reconcile accounts at regular practiced
intervals

Updating and reviewing the


financial records (source Highly
3.76 0.539
documents, journals, ledgers) on practiced
a regular basis

Having automated means of


checking the attendance and Moderately
3.24 1.136
number of hours worked by an practiced
employee

Reconciling the balance sheets


Highly
and payroll accounts for each 3.62 0.805
practiced
quarter

Conducting meetings to discuss Moderately


about adhering to the policies 3.43 0.978
practiced
against possible threats or risks

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

to the company

Conducting meetings to discuss


the consistent checking of
Moderately
vulnerabilities, blind spots, or 3.29 1.102
practiced
areas of improvement in the
company

Conducting meetings to discuss


the effectivity of existing Highly
3.52 0.814
practices in the business practiced
operations

Decision for Ho1 (CS1):

The average results of the answers from the respondents is that they always have

CCTVs positioned within the premises.

Based on the gathered data, most of the companies make use of the surveillance

policies that they implemented to ensure that they can monitor the actions of the

personnel during working hours. This helps reduce the possibility of asset

misappropriations such as inventory theft, cash theft, using company assets for

personal use, etc.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Decision for Ho1 (CS2):

The average results of the answers from the respondents is that their

management always views and utilizes the use of CCTV footage on a scheduled

basis.

Based on the gathered data, the selected companies really maximize the CCTV

footage obtained to check for any suspicious occurrences happening without

supervision. This helps keep track of the activity of both customers and employees in

the company during work hours and makes employees less prone to doing anything

illegal or against company policy knowing that there is a possibility that the

management might see it happening.

Decision for Ho1 (CS3):

The average results of the answers from the respondents is that the management

often allows authorized people to handle and check the monitoring of the CCTVs.

Based on the gathered data, the coffee shops do take their surveillance practices

seriously so that no one could tamper with the CCTV footage.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Decision for Ho1 (CM1):

The average results of the answers from the respondents is that they always

verify the authenticity of the suppliers by checking the important details before

making a purchase.

Based on the gathered data, the companies ensure that they are making purchases

to legitimate suppliers by checking their details to check for their authenticity before

committing to place an order.

Decision for Ho1 (CM2):

The average results of the answers from the respondents is that they always

counter check if the inventory received reflects what it states in the source

documents.

Based on the gathered data, the companies regularly double-check the number of

items received from the supplier to make sure that it is equivalent to the number of

items ordered which was stated in the source documents. This helps identify if the

supplier either committed fraud or error in terms of their services, or one of the

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

employees made an incorrect count of the physical inventory or if inventory theft has

taken place.

Decision for Ho1 (CM3):

The average results of the answers from the respondents is that they always

conduct unannounced visits by the management to check if the standards of business

operations are being met.

Based on the gathered data, the coffee shops want to see how the business

operates during normal working hours to catch them off guard and check what they

normally do during business hours without supervision, because some employees

have the tendency of slacking off during the job or doing things that are not related to

their work.

Decision for Ho1 (CIC1):

The average results of the answers from the respondents is that they often restrict

access to company proprietary information to only those who have authorized access

and need it in the course of their job.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Based on the gathered data, the selected companies strictly limit the people who

handle confidential information found in their databases or computers, so that no one

could easily change the data that has been encoded such as the revenue for the day,

current inventory count, etc.

Decision for Ho1 (CIC2):

The average results of the answers from the respondents is that they always have

a secure password for the databases or any important files or documents saved in

computers.

Based on the gathered data, the companies take their security procedures

seriously to ensure that only restricted people can access the files or confidential data,

so that no one could easily alter the data that has been encoded.

Decision for Ho1 (CIC3):

The average results of the answers from the respondents is that they often set up

controls in the computer system that will alert management if there are unauthorized

attempts of accessing important documents.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Based on the gathered data, although majority do try to set up controls to alert

management if an unauthorized person has been trying to access the system, but not

all of the coffee shops are aware of these kinds of controls or they are not able to

provide these yet because of insufficient resources.

Decision for Ho1 (CIC4):

The average results of the answers from the respondents is that they often have a

software that alerts management of suspicious activity on a company network.

Based on the gathered data, although majority do try to make use of softwares

and programs to better secure their information, but not all of the coffee shop

management are aware of these kinds of softwares or how to use them.

Decision for Ho1 (CPC1):

The average results of the answers from the respondents is that they always

practice regular inventory checks.

Based on the gathered data, the companies do give importance in checking their

inventory to make sure that there is no occurrence of theft or human error in the

physical count.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Decision for Ho1 (CPC2):

The average results of the answers from the respondents is that they always

consistently countercheck for the invoice of the inventory bought if it matches the

actual inventory count.

Based on the gathered data, the selected coffee shops regularly recounts and

monitors to see if the number of items received from the supplier is equivalent to the

number of items ordered which was stated in the receipt, orders, etc. This helps

identify if the supplier either committed fraud or error in terms of their services, or

one of the employees made an incorrect count of the physical inventory or inventory

theft has taken place.

Decision for Ho1 (CPC3):

The average results of the answers from the respondents is that they often

dispose of confidential information properly, by shredding documents and

completely removing printed data from electronic devices before deploying or

disposing of them.

Based on the gathered data, most companies do practice properly disposing of

confidential information but not all opt for this kind of method because it is time

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

consuming and sometimes costly to buy a shredder since majority of the coffee shops

have just started their business.

Decision for Ho1 (CPC4):

The average results of the answers from the respondents is that they always

keep the cash and checks in a locked cabinet or safe that can only be accessed by

authorized or assigned personnel.

Based on the gathered data, the companies maximize the use of locked cabinets

or safes to ensure that their cash, checks or other assets are secure, limited to very few

with access, to avoid the chances of theft from takig place.

Decision for Ho1 (CAR1):

The average results of the answers from the respondents is that they often assign

a trusted outside contractor to review and reconcile accounts at regular intervals.

Based on the gathered data, the companies are not always consistent in hiring a

trusted outside contractor probably because most coffee shops are still too small to go

to such extreme and costly precautions to ensure the safety and accuracy of their

accounting records.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Decision for Ho1 (CAR2):

The average results of the answers from the respondents is that they always

update and review the financial records on a regular basis.

Based on the gathered data, the coffee shops regularly update their financial

records to make sure that it is up-to-date and accurate, decreasing the possibility of

backlogs or having to search for details when it needed.

Decision for Ho1 (CAR3):

The average results of the answers from the respondents is that they often have

automated means of checking the attendance and number of hours worked by an

employee.

Based on the gathered data, majority of the coffee shops have automated

machines to check the attendance and number of hours of an employee, such as

biometric scanners but it is not always practiced regularly and it is also quite pricey

for a business that is still growing. Having an automated eme provides a more

efficient way of monitoring the attendance and schedule of employee and has less

chances of alterations since it cannot easily be changed like a written form of

attendance.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Decision for Ho1 (CAR4):

The average results of the answers from the respondents is that they always

reconcile the balance sheets and payroll accounts for each quarter.

Based on the gathered data, the companies regularly ensure their balance sheets

and payroll accounts are updated so that they can have a quick view of their business’

financial standing, without this business owners and accountants might not be able to

draw accurate or effective plans for the company.

Decision for Ho1 (CRA1):

The average results of the answers from the respondents is that they often

conduct meetings to discuss adhering to the policies against possible threats or risks

to the company.

Based on the gathered data, the companies’ management isn’t able to regularly

discuss how they comply with the policies against threats or risks of the company.

Decision for Ho1 (CRA2):

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

The average results of the answers from the respondents is that they often

conduct meeting to discuss consistent checking of vulnerabilities, blind spots, or

areas of improvement in the company.

Based on the gathered data, the companies’ management don’t regularly check

or assess their weakness, areas they need to improve, etc to ensure that they anticipate

and are prepared for certain scenarios that could take place.

Decision for Ho1 (CRA3):

The average results of the answers from the respondents is that they always

conduct meetings to discuss the effectivity of existing practices in the business

operations.

Based on the gathered data, the companies’ management regularly analyzes the

extent of how effective they are in their practices during the course of the business to

know what they should start doing or stop doing that will benefit the company’s

operations.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

4.4 Risk Management for Fraud Prevention

1.00-1.49 = Never (Not practiced)

1.50-2.49 = Rarely (Poorly practiced)

2.50-3.49 = Often (Moderately practiced)

3.50-4.00 = Always (Highly practiced)

Verbal
Standard
Fraud Prevention Practices Mean Interpret
Deviation
ation

Assigning and distributing the


Moderatel
responsibilities of the staff to avoid
3.19 1.123 y
unauthorized access to certain
practiced
resources, sensitive information, etc.

Conducting thorough background Highly


3.81 0.512
checks on new employees practiced

Ensuring that all the employees are


Highly
oriented and briefed on the company 3.9 0.301
practiced
policies, rules and regulations

3.33 0.913 Moderatel


Rewarding employees for ethical
y

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

behavior practiced

Disciplining the employees who Highly


3.62 0.669
breach the company’s code of ethics practiced

Implementing an ‘open-door policy’


for the staff to allow them to share their Highly
3.52 0.928
opinions or concerns with regards to practiced
business operations

Requiring staff to immediately report


their injuries or accidents and requiring Highly
3.67 0.796
medical certificates or proof of practiced
hospitalization or medical treatment

Cross-checking copies of source


Highly
documents to see if it agrees with other 3.62 0.805
practiced
proof documents

Verifying signatures before releasing Highly


3.71 0.561
or distributing a said document practiced

Requesting for authorized signatures


Moderatel
from managers or supervisors before
3.48 1.03 y
approving timesheets and overtime
practiced
claims

Decision for Ho2 (DSD):

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

The average results of the answers from the respondents is that they often assign

and distribute the responsibilities of the staff to avoid unauthorized access to certain

resources, sensitive information, etc.

Based on the gathered data, the companies don’t regularly practice delegating

tasks to different staff to ensure the accuracy and authenticity of the records, amount

of financial resources, inventory count, etc. Especially since most companies have

just started and usually only have at least 2-3 employees it is hard to distribute tasks

to others to ensure that segregation of duties are met.

Decision for Ho2 (DS1):

The average results of the answers from the respondents is that they always

conduct thorough background checks on new employees.

Based on the gathered data, the companies’ management regularly assesses and

checks every individual that they hire to know if they have had any issues in the past

that could affect their performance in the coffee shops, and how they were with their

previous employer.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Decision for Ho2 (DS2):

The average results of the answers from the respondents is that they always

ensure that all the employees are oriented and briefed on the company policies, rules

and regulations.

Based on the gathered data, the companies’ management regularly ensures that

their employees are made aware of the rules & regulations of the company as so that

they could adhere to the policies of the business and be able to know the

consequences if ever they fail to comply.

Decision for Ho2 (DS3):

The average results of the answers from the respondents is that they often reward

employees for ethical behavior.

Based on the gathered data, the companies’ management doesn’t regularly

reward their employees for ethical behavior which is sometimes beneficial to

encourage employees to do their best.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Decision for Ho2 (DS4):

The average results of the answers from the respondents is that they always discipline

the employees who breach the company's code of ethics.

Based on the gathered data, the coffee shops regularly adheres to disciplinary

actions for those who fail to comply to company rules and policies, this is to ensure

that the employees don’t take company regulations lightly.

Decision for Ho2 (DS5):

The average results of the answers from the respondents is that they always

implement an 'open-door policy' for the staff to allow them to share their opinions or

concerns with regards to business operations.

Based on the gathered data, the selected coffee shops’ management encourages

the staff to share their opinions and comments to their superiors or to the

management, which makes the staff feel like their inputs are valued.

Decision for Ho2 (DS6):

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

The average results of the answers from the respondents is that they always

require that injuries or accidents of staff be reported to them immediately. And

require medical certificates or proof of hospitalization or medical treatment.

Based on the gathered data, the companies’ management wants to make sure that they

are spending their money on the welfare of their employees, as it is their

responsibility. Since health hazards and accidents are inevitable, the company also

has the right to request for proof to ensure that the money does go to the

hospitalization or medical treatment of their staff.

Decision for Ho2 (DIV1):

The average results of the answers from the respondents is that they always

cross-check copies of source documents to see if it agrees with other proof

documents.

Based on the gathered data, the company verifies the authenticity and accuracy

of the source documents and financial records, it doesn’t just pass through or

authorized by just the same personnel.

Decision for Ho2 (DIV2):

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

The average results of the answers from the respondents is that they always

verify signatures before releasing or distributing a said document.

Based on the gathered data, the selected coffee shops double-checks the signatures of

important documents to ensure that there is no attempts of forgery.

Decision for Ho2 (DIV3):

The average results of the answers from the respondents is that they often

request for authorized signatures from managers or supervisors before approving

timesheets and overtime claims.

Based on the gathered data, the companies’ management usually makes a point

to have their superiors such as managers or supervisors to ensure the authenticity and

accuracy of the number of hours the employees worked, their attendance, and if they

indeed worked overtime. This reduces the chances of employees to alter their

timesheets or make false claims for overtime pay.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

4.5. Fraud Detection Practices with regard to Years of Existence


Table 10: Differences in the extent of practice for surveillance with regard to
years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
CS 1 .229 .798 Accept H0 Not Significant
CS 2 .239 .790 Accept H0 Not Significant
CS 3 .511 .608 Accept H0 Not Significant

4.5.1 Surveillance
Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically surveillance, when grouped according to years of existence using

One-way ANOVA. The results show that the fraud detection practices of

surveillance obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of surveillance and the years of existence of the

business.

Regardless of how long the coffee shops have been operating, it does not affect

their methods and procedures of surveillance. Over the course of a couple of years,

surveillance methods have evolved as this generation becomes more technologically

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

advanced. Surveillance aims to increase productivity and monitor the employees

during working hours, so this does not in any way relate to the existence of the

business. (Solon, 2017)

Table 11: Differences in the extent of practice for monitoring with regard to
years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
CM 1 .810 .460 Accept H0 Not Significant
CM 2 .229 .798 Accept H0 Not Significant
CM 3 .574 .573 Accept H0 Not Significant

4.5.2. Monitoring

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically monitoring, when grouped according to years of existence using

One-way ANOVA. The results shows that the fraud detection practices of

monitoring obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of monitoring and the years of existence of the

business.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Regardless of how long the company has been operating, it does not affect how

the company keeps track of business operations, inventory, etc. Monitoring is

accomplished through recurring operating activities of an entity and other actions

personnel take in performing their duties. It happens over time to observe and gauge

the progress of a business, and it does not take into account how long a business has

existed because this mostly involves how the management and staff carries this out.

(Ibraahim, 2014)

Table 12: Differences in the extent of practice for IT control with regard to
years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
CIC 1 1.787 .196 Accept H0 Not Significant
CIC 2 .306 .740 Accept H0 Not Significant
CIC 3 .441 .650 Accept H0 Not Significant
CIC 4 .587 .566 Accept H0 Not Significant

4.5.3. IT Control

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically IT control, when grouped according to years of existence using

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

One-way ANOVA. The results shows that the fraud detection practices of IT control

obtained f-values greater than the 0.05 level of significance set by the study, thus

the null hypothesis is accepted. This means that there is no significant difference

between the practice of IT control and the years of existence of the business.

Regardless of how long the business has been operating, it does not affect the

way they handle and secure their digital data found in computers or databases. IT

organization and management controls are dependent on how the management

implements them and how the employees comply with the methods, it does not

need to take into consideration how many years a company has existed. (Gatto,

2016)

Table 13: Differences in the extent of practice for physical control with regard
to years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
CPC 1 .488 .622 Accept H0 Not Significant
CPC 2 .631 .544 Accept H0 Not Significant
CPC 3 .909 .421 Accept H0 Not Significant
CPC 4 .265 .770 Accept H0 Not Significant

4.5.4. Physical Control

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Based on the table above the researchers compared differences in the evaluation of

the respondents on the extent of risk management practices on fraud detection,

specifically physical control, when grouped according to years of existence using

One-way ANOVA. The results shows that the fraud detection practice of physical

control obtained f-values greater than the 0.05 level of significance set by the study,

thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of physical control and the years of existence of the

business.

Regardless of how long a business has been operating, it does not affect how they

handle and secure their tangible assets and resources. An effectively implemented

physical control results in employees and management being able to maintain

competence in this area with the foundation of ethical values to maintain the

integrity of the work of each and every employee is doing. It is more of an ethical

or habitual factor and does not matter how long a company has been operating.

(Koranteng, 2011)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Table 14: Differences in the extent of practice for accounting records with
regard to years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
CAR 1 1.070 .364 Accept H0 Not Significant
CAR 2 .456 .641 Accept H0 Not Significant
CAR 3 .573 .574 Accept H0 Not Significant
CAR 4 .239 .790 Accept H0 Not Significant

4.5.5. Accounting Records

Based on the table above the researchers compared differences in the evaluation of

the respondents on the extent of risk management practices on fraud detection,

specifically accounting records, when grouped according to years of existence using

One-way ANOVA. The results shows that the fraud detection practice of accounting

records obtained f-values greater than the 0.05 level of significance set by the study,

thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of accounting records and the years of existence of

the business.

Regardless of the number of years the company has been operating, it does not

affect how the company records, updates, or check their financial records and other

source documents. They still maintain proper accounting procedures and practices

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

even if they the company just started or has been ongoing for quite some time.

(Australian Government, 2018)

Table 15: Differences in the extent of practice for risk assessment with regard
to years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
CRA 1 1.295 .298 Accept H0 Not Significant
CRA 2 .922 .416 Accept H0 Not Significant
CRA 3 .738 .492 Accept H0 Not Significant

4.5.6. Risk Assessment

Based on the table above the researchers compared differences in the evaluation of

the respondents on the extent of risk management practices on fraud detection,

specifically risk assessment, when grouped according to years of existence using

One-way ANOVA. The results shows that the fraud detection practices of risk

assessment obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of risk assessment and the years of existence of the

business.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Regardless of how long the business has been operating, the way they assess and

mitigate risks or the methods and procedure they implement since risk assessment is

an ongoing cycle of identifying and preparing for any internal or external risk due

to changes in business environment. So over the years it is an ongoing process, and

it doesn’t take into account how long a company has existed. (Tan, 2013)

4.6. Fraud Detection Practices with regard to Annual Net Income

Table 16: Differences in the extent of practice for surveillance with regard to
annual net income
Variable F Value Sig. Value Decision on H0 Interpretation
CS 1 .714 .557 Accept H0 Not Significant
CS 2 1.494 .252 Accept H0 Not Significant
CS 3 .845 .488 Accept H0 Not Significant

4.6.1. Surveillance

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically surveillance, when grouped according to annual net income using

One-way ANOVA. The results shows that the fraud detection practice of

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

surveillance obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of surveillance and the annual net income of the

business.

Regardless of how much revenue the company earns, it does not affect their

methods and procedures of surveillance. Over the course of a couple of years,

surveillance methods have evolved as this generation becomes more technologically

advanced. Surveillance aims to increase productivity and monitor the employees

during working hours, so this does not in any way relate to how much the business

earns. (Solon, 2017)

Table 17: Differences in the extent of practice for monitoring with regard to
annual net income
Variable F Value Sig. Value Decision on H0 Interpretation
CM 1 .599 .624 Accept H0 Not Significant
CM 2 1.169 .351 Accept H0 Not Significant
CM 3 .910 .457 Accept H0 Not Significant

4.6.2. Monitoring

Based on the table above the researchers compared differences in the evaluation

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

of the respondents on the extent of risk management practices on fraud detection,

specifically monitoring, when grouped according to annual net income using

One-way ANOVA. The results shows that the fraud detection practice of monitoring

obtained f-values greater than the 0.05 level of significance set by the study, thus

the null hypothesis is accepted. This means that there is no significant difference

between the practice of monitoring and the annual net income of the business.

Regardless of how much revenue is being earned by the company over the

course of a year, it does not affect how the company keeps track of business

operations, inventory, etc. Monitoring is accomplished through recurring operating

activities of an entity and other actions personnel take in performing their duties. It

happens over time to observe and gauge the progress of a business, and it does not

consider how much the business earns because this mostly involves how the

management and staff carries this out. (Ibraahim, 2014)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Table 18: Differences in the extent of practice for IT control with regard to
annual net income
Variable F Value Sig. Value Decision on H0 Interpretation
CIC 1 .149 .929 Accept H0 Not Significant
CIC 2 .655 .590 Accept H0 Not Significant
CIC 3 2.641 .083 Accept H0 Not Significant
CIC 4 2.868 .067 Accept H0 Not Significant

4.6.3. IT Control

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically IT control, when grouped according to annual net income using

One-way ANOVA. The results shows that the fraud detection practice of IT control

obtained f-values greater than the 0.05 level of significance set by the study, thus

the null hypothesis is accepted. This means that there is no significant difference

between the practice of IT control and the annual net income of the business.

Regardless of how much the company earns, it does not affect the way they

handle and secure their digital data found in computers or databases. IT

organization and management controls is dependent on how the management

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

implements them and how the employees comply with the methods, it does not

need to take into consideration how much is the company’s yearly revenue.

(Gatto, 2016)

Table 19: Differences in the extent of practice for physical control with regard
to annual net income
Variable F Value Sig. Value Decision on Interpretation
H0
CPC 1 1.041 .400 Accept H0 Not Significant
CPC 2 1.686 .208 Accept H0 Not Significant
CPC 3 .050 .985 Accept H0 Not Significant
CPC 4 .837 .492 Accept H0 Not Significant

4.6.4. Physical Control


Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically physical control, when grouped according to annual net income using

One-way ANOVA. The results shows that the fraud detection practices of physical

control obtained f-values greater than the 0.05 level of significance set by the study,

thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of physical control and the annual net income of the

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

business.

Regardless of how much the company earns, it does not affect how they handle

and secure their tangible assets and resources. An effectively implemented physical

control results in employees and management being able to maintain competence in

this area with the foundation of ethical values to maintain the integrity of the work

of each and every employee is doing. It is more of an ethical or habitual factor and

does not matter how much a company earns. (Koranteng, 2011)

Table 20: Differences in the extent of practice for accounting records with
regard to annual net income

Variable F Value Sig. Value Decision on H0 Interpretation


CAR 1 1.411 .274 Accept H0 Not Significant
CAR 2 .855 .483 Accept H0 Not Significant
CAR 3 1.616 .223 Accept H0 Not Significant
CAR 4 1.363 .288 Accept H0 Not Significant

4.6.5. Accounting Records

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

specifically accounting records, when grouped according to annual net income

using One-way ANOVA. The results shows that the fraud detection practice of

accounting records obtained f-values greater than the 0.05 level of significance set

by the study, thus the null hypothesis is accepted. This means that there is no

significant difference between the practice of accounting records and the annual net

income of the business.

Regardless of how much the company earns, it does not affect how the company

records, updates, or check their financial records and other source documents. They

still maintain proper accounting procedures and practices even if they gain more

revenue or less. (Australian Government, 2018)

Table 21: Differences in the extent of practice for risk assessment with regard
to annual net income
Variable F Value Sig. Value Decision on H0 Interpretation
CRA 1 .465 .710 Accept H0 Not Significant
CRA 2 1.125 .367 Accept H0 Not Significant
CRA 3 .890 .466 Accept H0 Not Significant

4.6.6. Risk Assessment

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically risk assessment, when grouped according to annual net income using

One-way ANOVA. The results shows that the fraud detection practice of risk

assessment obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of risk assessment and the annual net income of the

business.

Regardless of how much the company earns, it does not affect the way they

assess and mitigate risks or the methods and procedure they implement since risk

assessment is an ongoing cycle of identifying and preparing for any internal or

external risk due to changes in business environment. So over the years it is an

ongoing process, and it doesn’t take into account how much a business earns. (Tan,

2013)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

4.7. Fraud Detection Practices with regard to Number of Employees

Table 22: Differences in the extent of practice for surveillance with regard to
number of employees
Variable F Value Sig. Value Decision on H0 Interpretation
CS 1 .462 .712 Accept H0 Not Significant
CS 2 .594 .628 Accept H0 Not Significant
CS 3 .336 .800 Accept H0 Not Significant

4.7.1. Surveillance

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically surveillance, when grouped according to number of employees using

One-way ANOVA. The results shows that the fraud detection practice of

surveillance obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of surveillance and the number of employees.

Regardless of the number of employees the coffee shops have, it does not affect

their methods and procedures of surveillance. Over the course of a couple of years,

surveillance methods have evolved as this generation becomes more technologically

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

advanced. Surveillance aims to increase productivity and monitor the employees

during working hours, so this does not in any way relate to the number of

employees. (Solon, 2017)

Table 23: Differences in the extent of practice for monitoring with regard to
number of employees
Variable F Value Sig. Value Decision on H0 Interpretation
CM 1 2.176 .128 Accept H0 Not Significant
CM 2 4.571 .025 Reject H0 Significant
CM 3 .471 .706 Accept H0 Not Significant

4.7.2. Monitoring

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically monitoring, when grouped according to number of employees using

One-way ANOVA. The results shows that the fraud detection practice of monitoring

obtained f-values greater than the 0.05 level of significance set by the study, thus

the null hypothesis is accepted. Except for one monitoring practice, specifically

counter checking if the inventory received reflects what is stated in the source

documents, which obtained an f-value .025 that is less than the 0.05 level of

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

significance set by the study, thus the null hypothesis is rejected. This means that

there is a significant difference between the practice of monitoring and the number

of employees.

Due to lack of personnel, since majority of the coffee shops usually have at

least 2 or 3 employees, they are not able to allot time to double-check or recount the

items delivered from suppliers, considering they have other tasks during their

day-to-day operations that demand their attention. By implementing an inventory

software system, you can keep a closer eye on the movement of your products

without making your employees feel like you’re watching their every move. Having

an automated inventory system reduces the risk of fraudulent reporting by having

multiple users review and update inventory details.

Table 24: Differences in the extent of practice for IT control with regard to
number of employees
Variable F Value Sig. Value Decision on H0 Interpretation
CIC 1 .201 .894 Accept H0 Not Significant
CIC 2 .600 .624 Accept H0 Not Significant
CIC 3 .522 .673 Accept H0 Not Significant
CIC 4 .640 .599 Accept H0 Not Significant

4.7.3. IT Controls

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically IT control, when grouped according to number of employees using

One-way ANOVA. The results shows that the fraud detection practice of IT controls

obtained f-values greater than the 0.05 level of significance set by the study, thus

the null hypothesis is accepted. This means that there is no significant difference

between the practice of IT control and the number of employees.

Regardless of the number of employees hired by the business, it does not affect

the way they handle and secure their digital data found in computers or databases.

IT organization and management controls is dependent on how the management

implements them and how the employees comply with the methods, it does not

need to take into consideration how many number of employees there are. (Gatto,

2016)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Table 25: Differences in the extent of practice for physical control with regard
to number of employees
Variable F Value Sig. Value Decision on H0 Interpretation
CPC 1 .093 .963 Accept H0 Not Significant
CPC 2 .248 .862 Accept H0 Not Significant
CPC 3 .579 .637 Accept H0 Not Significant
CPC 4 .224 .878 Accept H0 Not Significant

4.7.4. Physical Controls

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically physical controls, when grouped according to number of employees

using One-way ANOVA. The results shows that the fraud detection practice of

physical control obtained f-values greater than the 0.05 level of significance set by

the study, thus the null hypothesis is accepted. This means that there is no

significant difference between the practice of physical control and the number of

employees.

Regardless of the number of personnel hired by the business, it does not affect

how they handle and secure their tangible assets and resources. The employees

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

handle these the same way they were trained or instructed, regardless of how many

they are they go through the same training and orientation. An effectively

implemented physical control results in employees and management being able to

maintain competence in this area with the foundation of ethical values to maintain

the integrity of the work of each and every employee is doing. It is more of an

ethical or habitual factor and does not matter how many employees are there.

(Koranteng, 2011)

Table 26: Differences in the extent of practice for accounting records with
regard to number of employees
Variable F Value Sig. Value Decision on H0 Interpretation
CAR 1 .423 .739 Accept H0 Not Significant
CAR 2 5.161 .017 Reject H0 Significant
CAR 3 .981 .425 Accept H0 Not Significant
CAR 4 .959 .434 Accept H0 Not Significant

4.7.5. Accounting Records

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically accounting records, when grouped according to number of employees

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

using One-way ANOVA. The results shows that the fraud detection practices of

accounting records obtained f-values greater than the 0.05 level of significance set

by the study, thus the null hypothesis is accepted. Except for one fraud detection

practice, specifically updating and reviewing financial records and source

documents on a regular basis, which obtained an f-value of .017 which is less than

the 0.05 level of significance set by the study, thus the null hypothesis is

rejected. This means that there is a significant difference between the practice of

accounting records and the number of employees.

Keeping track of the financial standing of the business helps make sound

business decisions, manage your cash flow, demonstrate your business’s financial

position to suppliers, accountants and prospective buyers, protect your business and

minimize costs. Due to lack of employees, they haven’t been able to regularly

update and review financial records or source documents, since they also have other

tasks that require their attention. Hence, they won’t be able to fully assess or

prepare for any risks that are financially related. (Australian Government, 2018)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Table 27: Differences in the extent of practice for risk assessment with regard
to number of employees
Variable F Value Sig. Value Decision on H0 Interpretation
CRA 1 .454 .718 Accept H0 Not Significant
CRA 2 .759 .532 Accept H0 Not Significant
CRA 3 .265 .850 Accept H0 Not Significant

4.7.6. Risk Assessment

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud detection,

specifically risk assessment, when grouped according to number of employees

using One-way ANOVA. The results shows that the fraud detection practices of risk

assessment obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of risk assessment and the number of employees.

Regardless of how many employees they hire, it does not affect the way they

assess and mitigate risks or the methods and procedure they implement since risk

assessment is an ongoing cycle of identifying and preparing for any internal or

external risk due to changes in business environment. So over the years it is an

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

ongoing process, and it doesn’t take into account how many staff are employed.

(Tan, 2013)

4.8. Fraud Prevention Practices with regard to Years of Existence

Table 28: Differences in the extent of practice for segregation of duties with
regard to years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
DSD .441 .650 Accept H0 Not Significant

4.8.1. Segregation of Duties

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud prevention,

specifically segregation of duties, when grouped according to years of existence

using One-way ANOVA. The results shows that the fraud prevention practice of

surveillance obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of segregation of duties and the years of existence

of the business.

Regardless of the amount of revenue earned by the company within a year, it

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

does not affect the way they distribute workload or responsibilities among the staff

or how they maximize the delegation of task. When employees are getting

opportunities to develop and to challenge themselves, their loyalty and productivity

will most likely improve, or at the least, not decrease. When an organization uses

delegation to develop their employees they are better placed to know who has the

competencies in place to take on higher duties. It does not matter how long a

business has been operating as long as the management distributes opportunities

evenly. (Lewis, 2014)

Table 29: Differences in the extent of practice for supervision of duties with
regard to years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
DS1 .484 .624 Accept H0 Not Significant
DS2 .229 .798 Accept H0 Not Significant
DS3 1.429 .265 Accept H0 Not Significant
DS4 1.222 .318 Accept H0 Not Significant
DS5 1.613 .227 Accept H0 Not Significant
DS6 .408 .671 Accept H0 Not Significant

4.8.2. Supervision

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud prevention,

specifically supervision, when grouped according to years of existence using

One-way ANOVA. The results shows that the fraud prevention practice of

supervision obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of supervision and the years of existence of the

business.

Regardless of how long the business has been operating, it does not affect how

the management supervises the employees or the steps taken into ensuring how well

they handle their staff. They are responsible for the establishment of internal control

policies and procedures and responsible for providing governance, guidance and

oversight and all personnel are responsible for reporting problems, such as policy

violations or illegal actions. It has nothing to do with how long a company has been

operating because it depends on the management. (Siayor, 2010)

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Table 30: Differences in the extent of practice for independent verification with
regard to years of existence
Variable F Value Sig. Value Decision on H0 Interpretation
DIV1 .527 .599 Accept H0 Not Significant
DIV2 .383 .688 Accept H0 Not Significant
DIV3 .614 .552 Accept H0 Not Significant

4.8.3. Independent Verification

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud prevention,

specifically independent verification, when grouped according to years of existence

using One-way ANOVA. The results shows that the fraud prevention practice of

independent verification obtained f-values greater than the 0.05 level of significance

set by the study, thus the null hypothesis is accepted. This means that there is no

significant difference between the practice of independent verification and the years

of existence of the business.

Regardless of how long the business has been operating, it does not affect the

methods or procedure of how they verify important documents. Independent

verification will be unbiased as there will be no emotional ties or hidden agendas to

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

the operation of the business. This would depend on the assigned people carrying

out this task and not the number of years a company has existed. (Kuman, 2016)

4.9. Fraud Prevention Practices with regard to Annual Net Income

Table 31: Differences in the extent of practice for segregation of duties with
regard to annual net income
Variable F Value Sig. Value Decision on H0 Interpretation
DSD .780 .521 Accept H0 Not Significant

4.9.1. Segregation of Duties

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud prevention,

specifically segregation of duties, when grouped according to annual net income

using One-way ANOVA. The results shows that the fraud prevention practice of

segregation of duties obtained f-values greater than the 0.05 level of significance set

by the study, thus the null hypothesis is accepted. This means that there is no

significant difference between the practice of segregation of duties and the annual

net income of the business.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Regardless of the amount of revenue earned by the company within a year, it

does not affect the way they distribute workload or responsibilities among the staff

or how they maximize the delegation of task. When employees are getting

opportunities to develop and to challenge themselves, their loyalty and productivity

will most likely improve, or at the least, not decrease. When an organization uses

delegation to develop their employees they are better placed to know who has the

competencies in place to take on higher duties. It does not matter how much the

business earns as long as the management distributes opportunities evenly. (Lewis,

2014)

Table 32: Differences in the extent of practice for supervision with regard to
annual net income

Variable F Value Sig. Value Decision on H0 Interpretation


DS1 .300 .825 Accept H0 Not Significant
DS2 .783 .519 Accept H0 Not Significant
DS3 .584 .633 Accept H0 Not Significant
DS4 .757 .534 Accept H0 Not Significant
DS5 .201 .894 Accept H0 Not Significant
DS6 .366 .778 Accept H0 Not Significant

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

4.9.1. Supervision

Based on the table above the researchers compared differences in the evaluation of

the respondents on the extent of risk management practices on fraud prevention,

specifically supervision, when grouped according to annual net income using

One-way ANOVA. The results shows that the fraud prevention practice of

supervision obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of supervision and the annual net income of the

business.

Regardless of how much the business earns annually, it does not affect the

methods of supervision taken by the management on how they handle their

employees. They are responsible for the establishment of internal control policies

and procedures and responsible for providing governance, guidance and oversight

and all

personnel are responsible for reporting problems, such as policy violations or illegal

actions. It has nothing to do with the net income of the company because it depends

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

on the management. (Siayor, 2010)

Table 33: Differences in the extent of practice for independent verification with
regard to annual net income

Variable F Value Sig. Value Decision on H0 Interpretation


DIV1 .502 .686 Accept H0 Not Significant
DIV2 .886 .468 Accept H0 Not Significant
DIV3 1.058 .393 Accept H0 Not Significant

4.9.3. Independent Verification

Based on the table above the researchers compared differences in the evaluation of

the respondents on the extent of risk management practices on fraud prevention,

specifically independent verification, when grouped according to annual net income

using One-way ANOVA. The results shows that the fraud prevention practice of

independent verification obtained f-values greater than the 0.05 level of significance

set by the study, thus the null hypothesis is accepted. This means that there is no

significant difference between the practice of independent verification and the

annual net income.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Regardless of the amount of net income, it does not affect the methods or procedure

of how they verify important documents. Independent verification will be unbiased

as there will be no emotional ties or hidden agendas to the operation of the business.

This would depend on the assigned people carrying out this task and not how much

a company earns annually. (Kuman, 2016)

4.10. Fraud Prevention Practices with regard to Number of Employees

Table 34: Differences in the extent of practice for segregation of duties with
regard to number of employees
Variable F Sig. Value Decision on Interpretation
Value H0
DSD 1.238 .327 Accept H0 Not Significant

4.10.1. Segregation of Duties

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud prevention,

specifically segregation of duties, when grouped according to number of employees

using One-way ANOVA. The results show that the fraud prevention practice of

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

segregation of duties obtained f-values greater than the 0.05 level of significance set

by the study, thus the null hypothesis is accepted. This means that there is no

significant difference between the practice of segregation of duties and the number

of employees.

Regardless of how many employees they hire, it does not affect the way they

distribute workload or responsibilities among the staff or how they maximize the

delegation of task. When employees are getting opportunities to develop and to

challenge themselves, their loyalty and productivity will most likely improve, or at

the least, not decrease. When an organization uses delegation to develop their

employees they are better placed to know who has the competencies in place to take

on higher duties. It does not matter if the company only has few staff as long as the

management distributes opportunities evenly. (Lewis, 2014)

Table 35: Differences in the extent of practice for supervision with regard to
number of employees

Variable F Value Sig. Value Decision on H0 Interpretation


DS1 .256 .856 Accept H0 Not Significant
DS2 .399 .755 Accept H0 Not Significant

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

DS3 .874 .474 Accept H0 Not Significant


DS4 .637 .601 Accept H0 Not Significant
DS5 1.183 .346 Accept H0 Not Significant
DS6 .549 .655 Accept H0 Not Significant

4.10.2. Supervision

Based on the table above the researchers compared differences in the evaluation

of the respondents on the extent of risk management practices on fraud prevention,

specifically supervision, when grouped according to number of employees using

One-way ANOVA. The results shows that the fraud prevention practice of

supervision obtained f-values greater than the 0.05 level of significance set by the

study, thus the null hypothesis is accepted. This means that there is no significant

difference between the practice of supervision and the number of the employees.

Regardless of how many employees they hire, it does not affect how the

management supervises the employees or the steps taken into ensuring how well

they handle their staff. They are responsible for the establishment of internal control

policies and procedures and responsible for providing governance, guidance and

oversight and all

personnel are responsible for reporting problems, such as policy violations or illegal

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

actions. It has nothing to do with the number of employees because it depends on

the management. (Siayor, 2010)

Table 36: Differences in the extent of practice for independent verification with
regard to number of employees
Variable F Value Sig. Value Decision on H0 Interpretation
DIV1 2.642 .083 Accept H0 Not Significant
DIV2 1.057 .393 Accept H0 Not Significant
DIV3 3.925 .027 Reject H0 Significant

4.10.3. Independent Verification

Based on the table above the researchers compared differences in the evaluation of

the respondents on the extent of risk management practices on fraud prevention,

specifically independent verification, when grouped according to number of

employees using One-way ANOVA. The results shows that the fraud prevention

practice of independent verification obtained f-values less than the 0.05 level of

significance set by the study, thus the null hypothesis is rejected. This means that

there is a significant difference between the practice of independent verification and

the number of employees.

Due to the fact that majority of the coffee shops only have at least 2 to 3 employees

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

make it difficult to have some other personnel to verify important documents

without any bias. Specifically in terms of verifying the authenticity of the approval

of managers or supervisors of employee timesheets and overtime claims, due to the

lack of staff, the current employees have no other alternative but to have to verify it

themselves. (Kuman, 2016)

Summary of Finding

1. Demographic Profile
1.1 Years of Existence

1.1.1 2 out of 21 of the coffee shops have existed for more than 10 years
with a percentage of 9.5 out of the total respondents.

1.1.2 2 out of 21 of the coffee shops have existed for at least 6-10 years
with a percentage of 9.5 out of the total respondents.

1.1.3 17 out of 21 of the coffee shops have existed for at least 1-5 years
with a percentage of 81 out of the total respondents.

1.2 Annual Net Income

1.2.1 5 out of 21 of the coffee shops have an annual net income of more than
P300,000 with a percentage of 23.8 out of the total respondents.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

1.2.2 3 out of 21 of the coffee shops have an annual net income between
P100,000 and P300,000 with a percentage of 14.3 out of the total
respondents.

1.2.3 13 out of 21 of the coffee shops have an annual net income less than
P100,000 with a percentage of 61.9 out of the total respondents.

1.3 Number of Employees

1.3.1 4 out of 21 of the coffee shops have more than 10 employees with a
percentage of 19 out of the total respondents.

1.3.2 4 out of 21 of the coffee shops have at least 5 to 10 employees with a


percentage of 19 out of the total respondents.

1.3.3 6 out of 21 of the coffee shops have at least 3 to 5 employees with a


percentage of 28.6 out of the total respondents.

1.3.4 7 out of 21 of the coffee shops have at least 2 to 3 employees with a


percentage of 33.3 out of the total respondents.

2. Type of Fraud

2.1 Asset Misappropriation

2.1.1 2 out of 21 of the coffee shops are aware and have policies
implemented for worker's compensation fraud with a percentage of 9.5 out
of the total respondents.

2.1.2 16 out of 21 of the coffee shops are aware and have policies
implemented for cash theft with a percentage of 76.2 out of the total
respondents.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

2.1.3 2 out of 21 of the coffee shops are aware and have policies
implemented for inventory theft with a percentage of 9.5 out of the total
respondents.

2.1.4 1 out of 21 of the coffee shops are aware and have policies
implemented for check tampering and forgery with a percentage of 4.8 out
of the total respondents.

2.2 Vendor Fraud

2.2.1 1 out of 21 of the coffee shops are aware and have policies
implemented for receiving counterfeit money sales with a percentage of 4.8
out of the total respondents.

2.2.2 2 out of 21 of the coffee shops are aware and have policies
implemented for bribery and kickbacks with a percentage of 9.5 out of the
total respondents.

2.2.3 18 out of 21 of the coffee shops are aware and have policies
implemented for billing schemes with a percentage of 85.7 out of the total
respondents.

2.3 Accounting Fraud

2.3.1 1 out of 21 of the coffee shops are aware and have policies
implemented for personal purchases with a percentage of 4.8 out of the total
respondents.

2.3.2 9 out of 21 of the coffee shops are aware and have policies
implemented for fake supplier fraud with a percentage of 42.9 out of the total
respondents.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

2.3.3 3 out of 21 of the coffee shops are aware and have policies
implemented for accounts receivable fraud with a percentage of 14 out of the
total respondents.

2.3.4 3 4 out of 21 of the coffee shops are aware and have policies
implemented for accounts payable fraud with a percentage of 19 out of the
total respondents.

2.3.5 4 out of 21 of the coffee shops are aware and have policies
implemented for embezzlement with a percentage of 19 out of the total
respondents.

2.4 Payroll Fraud

2.4.1 11 out of 21 of the coffee shops are aware and have policies
implemented for timesheet fraud with a percentage of 52.4 out of the total
respondents.

2.4.2 10 out of 21 of the coffee shops are aware and have policies
implemented for cash advance fraud with a percentage of 47.6 out of the
total respondents.

3. Risk Management for Fraud Detection

3.1 Surveillance

3.1.1 Positioning CCTVs within the premises

- obtained a mean of 3.71 which is interpreted as Highly Practiced.


3.1.2 Viewing or utilizing the use of the CCTV footage on a scheduled basis

- obtained a mean of 3.62 which is interpreted as Highly Practiced.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

3.1.3 Allowing authorized people to handle and check the monitoring of the
CCTVs

- obtained a mean of 3.48 which is interpreted as Moderately Practiced.


3.2 Monitoring

3.2.1 Verifying the authenticity of the supplier by checking the important


details before making a purchase

- obtained a mean of 3.81 which is interpreted as Highly Practiced.


3.2.2 Counterchecking if the inventory received reflects what is stated in the
source documents (receipts, order forms, etc.)

- obtained a mean of 3.9 which is interpreted as Highly Practiced.


3.2.3 Conducting unannounced visits by the management to check if the
standards of business operations are being met

- obtained a mean of 3.57 which is interpreted as Highly Practiced.


3.3 IT Controls

3.3.1 Restricting access to company proprietary information to only those


who have authorized access and need it in the course of their job.

- obtained a mean of 3.48 which is interpreted as ModeratelyPracticed.


3.3.2 Securing passwords for databases or any important files or documents
saved in computers.

- obtained a mean of 3.71 which is interpreted as Highly Practiced.


3.3.3 Setting up controls in the computer system that will alert management
if there are unauthorized attempts of accessing important documents.

- obtained a mean of 3.19 which is interpreted as Moderately Practiced.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

3.3.4 Having a software that alerts management of suspicious activity on a


company network.

- obtained a mean of 3.57 which is interpreted as Moderately Practiced.


3.4 Physical Control

3.4.1 Practicing regular inventory checks.

- obtained a mean of 3.67 which is interpreted as Highly Practiced.


3.4.2 Consistently counter checking for the invoice of the inventory bought
if it matches the actual inventory count.

- obtained a mean of 3.62 which is interpreted as Highly Practiced.


3.4.3 Disposing of confidential information properly, by shredding
documents and completely removing printed data from electronic devices
before redeploying or exposing of them.

- obtained a mean of 3.1 which is interpreted as Moderately Practiced.


3.4.4 Keeping the cash and checks in a locked cabinet or safe that can only
be accessed by authorized or assigned personnel.

- obtained a mean of 3.76 which is interpreted as Highly Practiced.


3.5 Accounting Records

3.5.1 Assigning a trusted outside contractor to review and reconcile accounts


at regular intervals.

- obtained a mean of 3.33 which is interpreted as Moderately Practiced.


3.5.2 Updating and reviewing the financial records (source documents,
journals, ledgers) on a regular basis.

- obtained a mean of 3.76 which is interpreted as Highly Practiced.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

3.5.3 Having automated means of checking the attendance and number of


hours worked by an employee.

- obtained a mean of 3.24 which is interpreted as Moderately Practiced.


3.5.4 Reconciling the balance sheets and payroll accounts for each quarter.

- obtained a mean of 3.62 which is interpreted as Highly Practiced.


3.6 Risk Assessment

3.6.1 Conducting meetings to discuss about adhering to the policies against


possible threats or risks to the company.

- obtained a mean of 3.43 which is interpreted as Moderately


Practiced.
3.6.2 Conducting meetings to discuss the consistent checking of
vulnerabilities, blind spots, or areas of improvement in the company.

- obtained a mean of 3.29 which is interpreted as Moderately


Practiced.
3.6.3 Conducting meetings to discuss the effectivity of existing practices in
the business operations.

- obtained a mean of 3.52 which is interpreted as Highly


Practiced.

4. Fraud Prevention Practice

4.1 Segregation of Duties

4.1.1 Assigning and distributing the responsibilities of the staff to avoid


unauthorized access to certain resources, sensitive information, etc.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

- obtained a mean of 3.19 which is interpreted as Moderately


Practiced.
4.2 Supervision

4.2.1 Conducting thorough background checks on new employees.

- obtained a mean of 3.81 which is interpreted as Highly


Practiced.
4.2.2 Ensuring that all the employees are oriented and briefed on the
company policies, rules and regulations.

- obtained a mean of 3.9 which is interpreted as Highly


Practiced.

4.2.3 Rewarding employees for ethical behavior.

- obtained a mean of 3.33 which is interpreted as


Moderately Practiced.
4.2.4 Disciplining the employees who breach the company’s code of ethics.

- obtained a mean of 3.62 which is interpreted as Highly Practiced.


4.2.5 Implementing an ‘open-door policy’ for the staff to allow them to share
their opinions or concerns with regards to business operations.

- obtained a mean of 3.52 which is interpreted as Highly


Practiced.
4.2.6 Requiring staff to immediately report their injuries or accidents and
requiring medical certificates or proof of hospitalization or medical
treatment.

- obtained a mean of 3.67 which is interpreted as Highly


Practiced.
4.3 Independent Verification

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

4.3.1 Cross-checking copies of source documents to see if it agrees with


other proof documents.

- obtained a mean of 3.62 which is interpreted as Highly Practiced.


4.3.2 Verifying signatures before releasing or distributing a said document.

- obtained a mean of 3.71 which is interpreted as Highly Practiced.


4.3.3 Requesting for authorized signatures from managers or supervisors
before approving timesheets and overtime claims.

- obtained a mean of 3.648 which is interpreted as Moderately Practiced.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

CHAPTER 5:

CONCLUSIONS & RECOMMENDATIONS

5.1 Conclusion

Based on the findings of the study, the researchers therefore conclude the following:

1. The demographic profile:

a. Majority of the coffee shops have only existed for at least 1-5 years.

b. Majority of the coffee shops have an annual net income of less than

P100,000

c. Majority of the coffee shops have at least 2 to 3 employees in the company

(branch).

2. The types of fraud that the coffee shops may have experienced:

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

a. In terms of asset misappropriation, majority of the coffee shops are aware

and have policies or practices against cash theft.

b. In terms of vendor fraud, majority of the coffee shops are aware and have

policies or practices against billing schemes.

c. In terms of accounting fraud, majority of the coffee shops are aware and

have policies or practices against fake supplier fraud.

d. In terms of payroll fraud, majority of the coffee shops are aware and have

policies or practices against timesheet fraud.

3. The extent of the practice for fraud detection that is being implemented by the

coffee shops:

a. With regard to surveillance, it is highly practiced.

b. With regard to monitoring, it is highly practiced.

c. With regard to IT control, it is moderately practiced.

d. With regard to physical control, it is highly practiced.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

e. With regard to accounting records, it is highly practiced.

f. With regard to risk assessment, it is moderately practiced.

4. The extent of the practice for fraud prevention that is being implemented by the

coffee shops:

a. With regard to segregation of duties, it is moderately practiced.

b. With regard to supervision, it is highly practiced.

c. With regard to independent verification, it is highly practiced.

5. There is a significant difference in the extent of the practice for fraud detection

when grouped according to the profile, specifically the practices of monitoring and

accounting records when grouped according to annual net income.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

6. There is a significant difference in the extent of the practice for fraud prevention

when grouped according to the profile, specifically the practice of independent

verification when grouped according to number of employees.

Recommendation

Based on the findings and analysis of the data gathered, the researchers therefore

recommend the following:

1. The coffee shop management should implement an automated inventory system

to help track or monitor the inventory, without the hassle of physically counting it

every now and then. This inventory system would be accessible to management or

even the business owner without having to check in on the employees or the

inventory. They could also assign specifically someone to counter-check the

inventory on a regular basis. This will ensure an accurate count of the company’s

resources.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

2. The coffee shop management should set a scheduled day during the week

where they could update and review all of the financial records that accumulated

over the course of the week. They could also make it a policy to update the sales,

expenses, budget tracker, etc, before the business day ends to ensure the accuracy of

the financial records and be aware of the real time standing of the business.

3. The coffee shop management should assign specific people to a specific task,

taking into consideration the fact that there is a limited number of employees, they

could segregate duties and distribute the tasks among the available staff. With each

one of them assigned to a certain task that does not involve the other, especially

with regards to sensitive tasks like updating timesheets, counter-checking cash sales,

updating sales, inventory counts, etc. This would help ensure the authenticity and

accuracy of the records.

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Bibliography

10 BENEFITS OF STARTING A COFFEE SHOP BUSINESS IN 2016. (2016).


Retrieved from Coffee Shops Startup:
https://coffeeshopstartups.com/10-benefits-of-starting-a-coffee-shop-busines
s-in-2016/
Accountants, C. I. (2008). Fraud risk management.
Accounting Tools. (2018, February 3). Types of payroll fraud. Retrieved from
Accounting Tools:
https://www.accountingtools.com/articles/2017/5/4/types-of-payroll-fraud
American Intercontinental University. (2012, January 12). What is Risk
Management Accounting? Retrieved from American Intercontinental
University:
https://www.aiuniv.edu/blog/2012/january/risk-management-accounting
Australian Government. (2018, August 24). business.gov.au. Retrieved from Keep
the right records:
https://www.business.gov.au/new-to-business-essentials/series-one/keep-the-
right-records
Babbie, E. R. (2010). The Practice of Social Research (12th Edition). Cengage.
Barned, J. (2017, June 19). myob. Retrieved from Why is the balance sheet
important?:
https://www.myob.com/au/blog/why-is-the-balance-sheet-important/
Bragg, S. (2018, April 10). Segregation of Duties. Retrieved July 26, 2018, from
Accounting Tools:
https://www.accountingtools.com/articles/segregation-of-duties.html
Bragg, S. (2018, February 3). Types of Payroll Fraud. Retrieved from Accounting
Tools:
https://www.accountingtools.com/articles/2017/5/4/types-of-payroll-fraud
Brokerage, C. (2013, October 11). The Importance of Risk Management In Business.
Retrieved July 25, 2018, from Capstone:
http://www.capstonebrokerage.com/the-importance-of-risk-management-in-
business/
Burgon, R. (2013, January 21). Rospa Workplace Safety. Retrieved from Five Step
Guide to Risk Assessment:

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

https://rospaworkplacesafety.com/2013/01/21/what-is-a-risk-assessment/
Bush, B. (2017, December 4). Three ways to identify and combat vendor fraud.
Retrieved from RSM:
https://rsmus.com/what-we-do/services/financial-advisory/forensic-accounti
ng-and-fraud-investigations/three-ways-to-identify-and-combat-vendor-frau
d.html
Bush, B. (2017, December 4). Three ways to identify and combat vendor fraud.
Retrieved July 22, 2018, from RSM:
https://rsmus.com/what-we-do/services/financial-advisory/forensic-accounti
ng-and-fraud-investigations/three-ways-to-identify-and-combat-vendor-frau
d.html
Chartered Institute of Management Accountants. (2008). Fraud Risk Management:
A Guide to Good Practice. London.
Costard, S. (2008). Introduction to Risk Analysis.
Crain, M. (2018, March 1). Mitigating Risk Through Fraud Prevention and
Detection. Retrieved from Kaufman|Rossin:
https://kaufmanrossin.com/blog/mitigating-risk-fraud-prevention-detection/
Creswell, J. W. (2013). Research design: Qualitative, quantitative, and mixed
method approaches. Sage Publications, Incorporated.
Crossman, A. (2018, April 1). Understanding Purposive Sampling. Retrieved from
ThoughtCo: https://www.thoughtco.com/purposive-sampling-3026727
DANONE. (2018, july 12). INTERNAL CONTROL SUPERVISOR. Retrieved july
26, 2018, from DANONE:
https://jobs.danone.com/job/Jakarta-Selatan-INTERNAL-CONTROL-SUPE
RVISOR-JK/441012101/
Davies, B. (2013, October 31). Research Design. Retrieved from Antartic Glaciers:
http://www.antarcticglaciers.org/students-3/postgraduate-students/research-d
esign/
Deloitte. (2011). Fraud Risk Management.
Dimitrijevic, D., Milovanovic, V., & Stancic, V. (2015). The Role of a Company's
Internal Control System in Fraud Prevention. eFinanse.
Education Career. (2014, January 3). Fraud Prevention Supervisor Job Description.
Retrieved July 26, 2018, from EducationCareerArticles:
http://educationcareerarticles.com/career-information/job-descriptions/fraud

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

-prevention-supervisor-job-description/
Elders Insurance. (2013, April 18). The four techniques of risk management.
Retrieved July 22, 2018, from Elders Insurance:
https://www.eldersinsurance.com.au/resources/the-four-techniques-of-risk-
management
Firth, M. (2017, July 5). Coffee Shop Manager Job Description. Retrieved from
Career Trend:
https://careertrend.com/coffee-shop-manager-job-description-2379.html
Fraud Detection And Prediction: Definition, Overview Aand Types. (2015, July 14).
Retrieved July 23, 2018, from Mordor Intelligence:
https://blog.mordorintelligence.com/fraud-detection-and-prevention-definiti
on-and-types/
Gage, A., & Melissa, D. (2009). Monitoring and Evaluating Gender-Based Violence
Prevention and Mitigation Programs.
Garrett, M. (2013, August 6). Entrepreneur. Retrieved from 4 Kinds of Fraud That
Could Destroy Your Business: https://www.entrepreneur.com/article/227689
Gatto. (2016, June 7). ITG General Controls / IT Risk Assessment. Retrieved from
ISACA:
https://www.isaca.org/chapters3/Charlotte/Events/Documents/Event%20Pre
sentations/06072016/IT%20General%20Controls%20-%20John%20Gatto%
20(Part%201).pdf
Gray, R. B. (2017, November 8). Patriot Software. Retrieved from What Is Workers’
Compensation Fraud?:
https://www.patriotsoftware.com/payroll/training/blog/what-is-workers-com
pensation-fraud-fighting-penalties/
Group, Brumell. (2015, March 25). THE FRAUD TRIANGLE THEORY. Retrieved
July 22, 2018, from Brumell Group:
http://www.brumellgroup.com/news/the-fraud-triangle-theory/
Hall, J. A. (2011). Accounting Information Systems.
Hall, J. A. (2011). Accounting Informations Systems (7th Edition). Ohio: Cengage
Learning.
Human Resources. (2018, 8 14). Paychex Worx Knowledge at Work. Retrieved from
Employment Background Checks May Sharpen Your Recruitment Efforts:
https://www.paychex.com/articles/human-resources/importance-of-backgrou

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

nd-checks
Human Resources. (2018, 2 27). Paychex Worx Knowledge At Work. Retrieved from
How an Open-Door Policy in the Workplace Can Benefit Your Business:
https://www.paychex.com/articles/human-resources/open-door-policy-in-the
-workplace
Ibraahim, A. M. (2014, June). Academia. Retrieved from The Effect of Internal
Control on Financial Performance in Hargeisa Local Government case study:
https://www.academia.edu/9964102/The_Effect_of_Internal_Control_on_Fi
nancial_Performance_in_Hargeisa_Local_Government_case_study
Independent Verification and Validation. (2001).
Investopedia. (2018, July 16). Risk Management. Retrieved from Investopedia:
https://www.investopedia.com/terms/r/riskmanagement.asp
Investopedia. (2018, July 26). T-test. Retrieved from Investopedia:
https://www.investopedia.com/terms/t/t-test.asp
Johnson, S. (2011, December 23). Importance of Data Analysis in Research.
Retrieved from
http://dissertation-help-uk.blogspot.com/2011/12/importance-of-data-analysi
s-in-research.html
Jones, I. J. (2016, November 25). Ethical Advocate. Retrieved from Reward Ethical
Conduct: https://www.ethicaladvocate.com/reward-ethical-conduct/
Joseph, C. (2018, June 23). Chron. Retrieved from Why Is Orientation Important to
the Employees?:
https://smallbusiness.chron.com/orientation-important-employees-11562.ht
ml
Kennedy, K. A. (2012). An Analysis of Fraud: Causes, Prevention, and. Retrieved
July 26, 2018, from University of New Hampshire:
https://scholars.unh.edu/cgi/viewcontent.cgi?article=1099&context=honors
Kim, J. (2017, September 3). jiahkimlaw. Retrieved from What You Should Know
When You Hire Independent Contractors from the Philippines:
http://jiahkimlaw.com/business/philippines-independent-contractors/
Kohanzad, B. (2015, December 30). LnkedIn. Retrieved from Importance of
Keeping Accurate Accounting Records:
https://www.linkedin.com/pulse/importance-keeping-accurate-accounting-re
cords-kohanzad-ea-cfe

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Kokemuller, N. (2018, July). Job Duties of a Coffee House Supervisor. Retrieved


from Chron:
https://work.chron.com/job-duties-coffee-house-supervisor-3858.html
Koranteng, D. (2011, July). Academia. Retrieved from INTERNAL CONTROLS
IN ORGANIZATIONS:
https://www.academia.edu/8977650/INTERNAL_CONTROLS_IN_ORGA
NIZATIONS
Kuman, P. (2016, January 8). uTest. Retrieved from Importance of Independent
Verification & Validation:
https://www.utest.com/articles/importance-of-independent-verification--vali
dation
LaMarco, N. (2018, June 26). Chron. Retrieved from The Disadvantages of
Small-Scaled Businesses:
https://smallbusiness.chron.com/disadvantages-smallscaled-businesses-6014
9.html
Lee, S. (2017, July 5). What Kind of Job Positions are in Coffee Shops. Retrieved
from Career Trend:
https://careertrend.com/info-8362981-kind-job-positions-coffee-shops.html
Levin, M. (2017, July 13). Inc. Southeast Asia. Retrieved from The Top 10
Leadership Blind Spots, and 5 Ways to Turn Them Into Strengths:
http://inc-asean.com/lead/top-10-leadership-blind-spots-5-ways-turn-strengt
hs/?utm_source=inc&utm_medium=redir&utm_campaign=incredir
Lewis, S. F. (2014, June 16). LinkedIn. Retrieved from Why delegation is good for
you, your team and for productivity:
https://www.linkedin.com/pulse/20140616220907-54522881-benefits-of-del
egation
Lombardi, A. (2017, June 5). Cash Tech. Retrieved from Top 10 Best Practices &
Procedures for Handling Cash:
https://www.cashtechcurrency.com/blog/top-10-best-practices-procedures-fo
r-handling-cash
Lomer, D. (2017, April 2017). 31 Ways to Prevent and Detect Payroll Fraud.
Retrieved from i-sight:
https://www.google.com.ph/search?q=Payroll+fraud+schemes+include%3A
+timesheet+fraud+and+paycheck+theft+(Lomer%2C+2017).&oq=Payroll+f

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

raud+schemes+include%3A+timesheet+fraud+and+paycheck+theft+(Lomer
%2C+2017).&aqs=chrome..69i57.2800j0j4&sourceid=chrome&ie=U
Lomer, D. (2017, March 15). 41 Types of Fraud and How to Detect and Prevent
Them. Retrieved July 22, 2018, from i-Sight:
https://i-sight.com/resources/41-types-of-fraud-and-how-to-detect-and-preve
nt-them/
Lowers, M. (2014, July 1). THE RISK MANAGEMENT BLOG. Retrieved July 27,
2018, from Lowers and Associates:
http://blog.lowersrisk.com/why-fraud-prevention-matters/
Mackenzie, R. J. (2018, July 20). Informatics from Technology Netwroks. Retrieved
from One-Way vs Two-Way ANOVA: Differences, Assumptions and
Hypotheses:
https://www.technologynetworks.com/informatics/articles/one-way-vs-two-
way-anova-definition-differences-assumptions-and-hypotheses-306553
Mayhew, R. (2018, May 18). Chron. Retrieved from Types of Discipline Used in
the Workplace:
https://smallbusiness.chron.com/types-discipline-used-workplace-10890.htm
l
McLeod, S. (2014). Sampling Methods. Retrieved from Simply Psychology:
https://www.simplypsychology.org/sampling.html
McLeod, S. (2018). Questionnaire. Retrieved from Simply Psychology:
https://www.simplypsychology.org/questionnaires.html
Medel, M. &. (2014, June 28). Prezi. Retrieved from Descriptive Method:
https://prezi.com/3rdptjum29u9/descriptive-method/
Merchanpro Express. (2017, May 17). What is the Difference Between an
Authorization Fee and a Transaction Fee? Retrieved July 26, 2018, from
Merchanpro Express:
https://news.merchantproexpress.com/what-is-an-authorization-fee-and-a-tra
nsaction-fee
Mutetwa, S. (2015, April 20). IMPORTANCE OF RISK MANAGEMENT FOR ANY
ORGANISATION. Retrieved July 25, 2018, from LinkedIn:
https://www.linkedin.com/pulse/importance-risk-management-any-organisat
ion-shingai-mutetwa
Nguyen, V. (2013, January 24). How Starbucks and Other Coffee Shops May

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Benefit You. Retrieved July 25, 2018, from Self Stairway:


http://www.selfstairway.com/starbucks/
Nickolas, S. (2018). What is accounting fraud? Retrieved from Investopedia:
https://www.investopedia.com/ask/answers/032715/what-accounting-fraud.a
sp
Operational Risk. (2018, July 20). Retrieved July 20, 2018, from Investopedia:
https://www.investopedia.com/terms/o/operational_risk.asp
Pierce. (2016, July 18). mitrefinch. Retrieved from The Importance of Employee
Attendance Reporting:
https://advancesystemsinc.com/importance-employee-attendance-reporting/
Powell, M. (2011). The Apparatus of Fraud Risk: Accounting, Organizations and
Society.
Prado, N. I., Penaso, A. M., Cimene, F. T., & Simbulan, S. G. (2010). Research
Methods. CMU-IMDC.
Prado, N., Penaso, A. M., Cimene, F. T., Aves, L. S., & Simbulan, S. G. (2011).
Methods of Research.
Reputational Risk. (2018, July 21). Retrieved July 21, 2018, from Investopedia:
https://www.investopedia.com/terms/r/reputational-risk.asp
Salkind, N. J. (2010). Encyclopedia of Research Design. Sage.
Scheafer, C. (2017, May 5). Understanding the Difference Between Physical Access
Control and Logical Access Control. Retrieved July 26, 2018, from Mint
Controls:
http://www.mintcontrols.com/understanding-the-difference-between-physica
l-access-control-and-logical-access-control/
Siayor, A. D. (2010). Risk Management and Internal Control Systems in the
Financial Sector. Tromsø University Business School.
Solon, O. (2017, November 6). The Guardian. Retrieved from Big Brother isn't just
watching: workplace surveillance can track your every move:
https://www.theguardian.com/world/2017/nov/06/workplace-surveillance-bi
g-brother-technology
Spacey, J. (2015, August 29). 20 Types of Business Risk. Retrieved July 16, 2018,
from Simplicable: https://simplicable.com/new/business-risk
Spacey, J. (2015, July 19). 5 Types of Risk Treatment. Retrieved July 22, 2018, from
Simplicable: https://simplicable.com/new/risk-treatment

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

Spacey, J. (2015, August 27). 6 Types of Compliance Risk. Retrieved July 21, 2018,
from Simplicable: https://simplicable.com/new/compliance-risk
Spacey, J. (2016, October 30). 29 Examples of IT Controls. Retrieved July 26, 2018,
from Simplicable: https://simplicable.com/new/it-control-examples
Tan, L. H. (2013, December). Calhoun. Retrieved from An analysis of internal
controls and procurement fraud deterrence:
https://calhoun.nps.edu/bitstream/handle/10945/39022/13Dec_Tan_Li_Huan
g_Joyce.pdf?sequence=1
Tashia. (2015, March 5). Pros and Cons of opening a Cafe or Bar. Retrieved from
MotivatingMum:
https://www.motivatingmum.com/blog/pros-and-cons-of-opening-a-cafe-or-
bar/
Ten Six. (2017, March 28). 7 IMPACTS OF POOR RISK MANAGEMENT (AND
WHAT YOU CAN DO ABOUT THEM). Retrieved July 27, 2018, from Ten
Six Consulting:
https://tensix.com/2017/03/7-impacts-of-poor-risk-management-and-what-y
ou-can-do-about-them/
Thibodeaux, W. (2018, June 28). Chron. Retrieved from The Importance of
Keeping an Accurate Inventory:
https://smallbusiness.chron.com/importance-keeping-accurate-inventory-23
304.html
Thompson, M. (2017, October 31). Everything You Need to Know about Asset
Misappropriation Fraud – and How to Deal with it. Retrieved from
NewsBlaze:
https://newsblaze.com/business/finance/everything-you-need-to-know-about
-asset-misappropriation-fraud-and-how-to-deal-with-it_88698/
UK Essays. (2017, April 24). The Importance of Data Collection. Retrieved from
UK Essays:
https://www.ukessays.com/essays/construction/the-importance-of-data-colle
ction-construction-essay.php
Veenstra, J. (2017, March 20). Quora. Retrieved from What is “frequency” in
statistics?:
https://www.quora.com/What-is-%E2%80%9Cfrequency%E2%80%9D-in-s
tatistics

College of Business Administration and Accountancy


University of Perpetual Help System DALTA
Las Piñas Campus

W.G. Zikmund, B. B. (2010). Business Research Methods (8th Edition). Canada:


Cengage.
Walsh, M. (2018, January 5). The HRDIRECTOR. Retrieved from Timesheet Fraud
– How well is your business protected?:
https://www.thehrdirector.com/features/fraud/timesheet-fraud-well-business-
protected/
Williams, P. (2015, April 27). Langdon & Company. Retrieved from THE
IMPORTANCE OF SEPARATION OF DUTIES:
https://www.langdoncpa.com/2015/04/27/the-importance-of-separation-of-d
uties/

College of Business Administration and Accountancy