Impact of COVID-19 on Financial Cooperatives' Going Concern and Receivables

SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San

KnPedro City, Laguna
Impact of COVID-19 Pandemic on the Going Concern Principle

and Receivable Management of Financial Cooperatives
An Undergraduate Thesis Presented to the

Department of Accountancy
San Pedro College of Business Administration
San Pedro City, Laguna
In Partial Fulfilment of the Requirements for the Degree of

Bachelor of Science in Accountancy
BAYSIC, John Paul

COZICO, Zion Malachi
TABULDAN, Ma. Deanielle Anne
May 2021
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TABLE OF CONTENTS
Title Page i
Table of Contents ii
List of Tables v
List of Figures vi
List of Appendices vii
CHAPTER 1 INTRODUCTION
Introduction ` 01
Background of the Study ` 02
Statement of the Problem 04
Conceptual Framework 05
Theoretical Framewrok 06
Hypotheses 09
Scope and Limitations 09
Significance of the Study 10
Definition of Terms 12
ii
CHAPTER 2 REVIEW OF RELATED LITERATURE AND STUDIES
Foreign Literature 15
Local Literature 17
Foreign Studies 20
Local Studies 23
Synthesis 23
CHAPTER 3 METHODOLOGY
Research Design 25
Population and Sample 26
Data Gathering Procedure 28
Relative Frequency 29
Weighted Mean 29
One Way Chi-square Test 30
CHAPTER 4 RESULTS AND DISCUSSIONS
Profile of the Respondents 32
Measures taken to ensure continuity of
business operations during the COVID-19 pandemic 35
Credit and Collection Policy 36
Going Concern Principle 38
Accounts Receivable Management 39
Significant Relationship in the Effects of the COVID-19
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Pandemic on the Going Concern Principle and Receivable
Management as Perceived by Selected Financial Cooperatives 41
CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS
Conclusions 42
Recommendations 43
References 45
Appendices 54
Curriculum Vitae 61
iv
LIST OF TABLES
Table Title Page
3.1 Likert Type Mean Interpretation 30
4.1 Profession of the Respondents and
the Branches of the Financial Cooperative 32
4.2 Total Number of Members in the
Cooperative for Each Branch 33
4.3 Years of the Existence of the Cooperative Branch 34
4.4 Measures Taken to Ensure Continuity of Business
Operations during the COVID-19 Pandemic 35
4.5 Credit and Collection Policy 36
4.6 Going Concern Principle 38
4.7 Accounts Receivable Management 39
4.8 Degree of Relationship of the Impact of the
COVID-19 Pandemic on the Going Concern Principle
and Receivable Management of the Financial Cooperative 41
v
LIST OF FIGURES
Figure Title Page
1.1 Research Paradigm 06
3.1 Population of the Respondents 27
vi
LIST OF APPENDICES
Appendix Title Page
A Survey Questionnaire 54
B Interview Questions 57
C Request Letter 58
X Certification 59
vii
CHAPTER 1
THE PROBLEM AND ITS SETTING
Introduction
In late December of 2019, the World Health Organization (WHO) reported an outbreak
of respiratory illnesses in Wuhan City, Hubei, China, that alarmed the world. As the year 2020
started, WHO declared it a global epidemic on March 31, 2020 (McKillop & French, 2020). The
public came to know this global pandemic as COVID-19. The COVID-19 outbreak has been
spreading and makes up a large part of the global economy. The consequences are severe for
complex supply chains with global footprints, and the disruptions they suffer are likely to ripple
out through all the sectors of the economy (Atradius Collections, 2020).
Moreover, business owners consider the COVID-19 pandemic one of the most significant
risks to the growth of the global economy. The large-scale and erratic developments of the
outbreak create pressure on all businesses to mitigate as much risk possible. Cash flow is one of
the significant areas they need to secure as cash is essential to businesses' survival (Atradius
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Collections, 2020). The pandemic could cause cash flow strains, delayed clients' payments, and
have their businesses to file for bankruptcy.
Furthermore, the financial cooperative is one of the most affected business sectors. With
the lockdown policy implemented, business entities are forced to carry through their business by
encouraging them to work from their homes. Only limited personnel are allowed to work in their
offices. Branches of Savings and Credit Cooperatives operate on a skeletal workforce that
operates for just four hours a day, which hampers their business's continuity and day-to-day
transactions repayment of loans, collections, and withdrawal deposits (Sancheti, 2020).
Background of the Study
With the COVID-19 pandemic, the world is experiencing the worst economic recession
since World War II (World Bank, 2020). Therefore, to prevent the spread of the virus,
lockdowns were implemented throughout the world, including the Philippines. As a result,
people lost their jobs, and thousands of businesses went bankrupt. Moreover, business entities
like financial cooperatives have experienced difficulties in providing service due to the new
policies. Therefore, the situation has resulted in uncertainty on the continuity of their business
operations.
The purpose of the financial cooperative is to help the members to improve their quality
of life, mainly when a crisis occurred (McKillop & French, 2020). Even so, financial
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cooperatives would still have difficulty serving all their members during a pandemic because of
certain circumstances. Moreover, customers may face challenges that could impact their ability
to make payments. Thus, the government issued a moratorium on loan payments, giving the
members a grace period of 60 days (about two months) to pay their current and outstanding
balance (Lucas, 2020). Consequently, Sancheti (2020) stated that the collection of loan payments
and deposits dropped to a 20% average. Also, financial cooperatives need to evaluate which
receivables can be collected and consider crediting partial payments or extended payment terms.
If the receivable is not collectable, the loss needs to be recorded (Nakao, 2020).
On the other hand, news about the temporary shutdown of 3,012 business operations on
July 2, 2020 surfaced. It resulted in the unemployment of 100,000 workers (Salaverria, 2020).
Hence, it is only reasonable to wonder about a company's going concern principle. As one of the
fundamental principles of accounting, the going concern principle assumes that a business will
continue to operate in the foreseeable future without the need or intention to liquidate or curtail
its operational activities. However, the unpredictability of the pandemic's potential impact may
result in material uncertainties that cast doubt on an entity's ability to operate as a going concern
(KMPG, 2020). As stated by Grant Thornton (2020), some entities which were previously a
going concern may no longer be.
The pandemic has not only taken a toll on the lives of many people but on the lives of
businesses as well, be it large or small. With that, financial cooperatives have no exemptions
from the matter. The goal of financial cooperatives to improve the well-being of their members is
challenging during these rough times. Likewise, the going concern principle of financial
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cooperatives evinced an uncertainty on the future operations with many businesses filing for
bankruptcy.
Statement of the Problem
The research aims to study the significant relationship in the effects of the COVID-19 pandemic
on the continuity of business operations and the receivable management of financial
cooperatives. With this, the researchers will seek answers to these questions:
1. What is the profile of respondents in terms of?
1.1. Name and branch of the financial cooperative;
1.2. Years of existence of the cooperative;
1.3. Number of members of the cooperative;
2. What extent of measures were taken by the financial cooperative to ensure continuity of
their business operations during the COVID-19 pandemic?
3. What is the credit and collection policy implemented by the respondents?
4. What is the effect of the COVID-19 pandemic on the going concern principle as
perceived by the respondents?
5. What is the effect of the COVID-19 pandemic on accounts receivable management as
perceived by the respondents?
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6. Is there a significant relationship in the effects of the COVID-19 pandemic on the going
concern principle as perceived by selected financial cooperatives?
7. Is there a significant relationship in the effects of the COVID-19 pandemic on accounts
receivable management perceived by selected financial cooperatives?
Conceptual framework
This section shows the outline of the relationship of ideas and how these ideas relate to
the study. Figure 1 describes the conceptual framework of the research. The approach used was
the system approach (Input- Process- Output System) to describe the research's conceptual
framework. Input consists of the demographic profile of the respondents and the statement of the
problem. The process used is interview and questionnaire. Through this process, the researchers
will fully comprehend the impacts of the pandemic on the going concern principle and receivable
management of financial cooperatives. The output is the policies and actions made by the
financial cooperatives to counter the impacts of the pandemic on financial cooperatives.
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Figure 1.1
Research Paradigm
Demographic profile of respondents  Interview Policies and set of

 Name and branch of the  Survey measures for financial
financial cooperative Questionnaire cooperatives to counter
 Years of existence of the the impacts of COVID-
cooperative 19 on the going concern
 Number of members of the principle and accounts
cooperative receivable management
Statement of the problem
 Extent of measures taken to
ensure continuity of their
business
 Grace periods given by
financial cooperatives to
their members
 Credit and collection policy
implemented
 Effects of the COVID-19
pandemic on the going
concern principle and
accounts receivable
Theoretical framework
According to Odondi et al. (2017), receivable management is a vital aspect of the finance
department as it determines an entity's position in terms of financial performance. When an
entity wants to improve its financial performance, the management must plan and provide
necessary resources beforehand. Moreover, Lugtu, Jr. (2021) stated that radical approaches are
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needed to maximize collection efforts' impact. Lugtu further noted that one of the approaches is
applying customer segmentation, wherein the financial cooperative will vary the members'
characteristics and payment behaviours. With these, they can classify the good, fair, and poor
accounts. Another approach is to revise the accounts receivable collection policies and process.
Revising the policies and process is necessary, as there might be changes in the method and way
of recording transactions during the pandemic. Revising collection policies and processes may be
a clever idea due to resource constraints. After all these approaches are applied, utmost empathy
to the customers should be applied.
Another principle vital to the research is the going concern principle. It is one of the
fundamental accounting principles, which assumes that the company will stay in business during
and beyond the next fiscal period and that the value of its assets will endure (MaRS Startup
Toolkit, 2019). Assessing the going concern assumption is appropriate, and management’s
assessment must consider different scenarios, including at least one severe but plausible
downside scenario. The assumptions used in the going concern assessment should be consistent
with those used in other areas of the company’s financial statements (Kegalji, 2020). Regardless
of the entity’s size or business, the management is required by Philippine Financial Reporting
Standards (PFRS) to assess the going concern assumption's appropriateness when preparing
financial statements. There must be disclosures if such an assumption is no longer valid or if
there is significant doubt that the entity will continue as a going concern in the future. However,
suppose management assesses that such an assumption is no longer valid. In that case, the
disclosures are not the only ones affected. The company should no longer prepare the financial
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statements (as a whole) on a going-concern basis, and the basis for measuring assets and
recognizing liabilities will change. The write-down of the assets will be recorded to their
respective recoverable amounts. The pandemic has affected all entities; the extent and manner
are not the same. Thus, the degree of consideration and the conclusions reached will differ from
entity to entity. Given the uncertainties involved and the evolving implications of COVID-19,
management must exercise significant judgment and continuously update its assessment until the
date of the issuance of the financial statements (Villanueva, 2020).
A company's liquidity refers to converting an asset or security into ready cash without
affecting its market price (Hayes, 2021). During this crisis, financial service providers (FSPs),
namely, financial cooperatives focusing on low- to moderate-income populations, are
particularly vulnerable due to increasing liquidity constraints and have critical roles to help
clients weather the storm. With that in mind, the FinnSalud program was launched in Mexico,
developing stress testing models for cooperatives during this pandemic. The model calculates
key performance indicators (KPIs) for each risk category with various levels of intensity. The
primary components of the model include the inputs, calibration, and outputs. For the inputs,
primary data fed into the model consists of financial statements, past inflows, and outflows, such
as deposits and withdrawals from savings and current accounts and term deposits – average loan
disbursements and payments effects of some government measures. Subsequently, financial
service providers have options to set the timeframes for each phase of the crisis and calibrate the
input variables for the two scenarios under four dimensions: institutional portfolio (loans,
savings, term deposits), change in operations due to COVID-19, capital, and liquidity
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management of treasury assets. Afterwards, the model calculates weekly the balance sheet,
income statement, available cash balance, regulatory indicators of the liquidity ratio, and the
level of capitalization according to the conditions that the cooperative expects to face (Zapata et
al., 2020).
Hypotheses
The researchers formulated their hypotheses with a 5% level of significance. The
researchers tested the following hypotheses for significance and rejection:
1. There is no significant relationship in the effects of the COVID-19 pandemic on the
going concern principle as perceived by selected financial cooperatives.
2. There is no significant relationship in the effects of the COVID-19 pandemic on
accounts receivable management as perceived by selected financial cooperatives.
Scope and limitations
The researchers will focus on the significant relationship in the effects of the COVID-19
pandemic on the accounts receivable management and going concern principle of financial
cooperatives. Although the research’s focus is on the relation of the COVID-19 pandemic on
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financial cooperatives, it is still early to conclude the impacts of the pandemic. Therefore, the
research will focus on the respondents' perception rather than the actual effect of the COVID-19
pandemic on the financial cooperatives. Also, the researchers will determine the measures taken
by the financial cooperative during the pandemic. These are necessary to understand the impact
of COVID-19 on the financial cooperative.
The research is limited only to the branches of NATCCO employees' cooperative or NEC
multipurpose cooperative. Namely, with their branches from Batasan and Cubao, Quezon City,
Daet, San Pedro and Taguig. The respondents will be the managers, policymakers, bookkeepers
and accountants of the said cooperative.
Significance of the Study
The financial cooperative is one of the business entities that are greatly affected by the
COVID-19 pandemic. Receivable management became difficult due to the challenges faced by
the entity and its members during the lockdown. Also, the cash flow of financial cooperatives is
affected by the COVID-19 pandemic that gives uncertainty to the continuation of their business
operation (Enjay IT Solutions, 2020). The importance of this research is that it will determine the
relationship of the COVID-19 pandemic and its effect of the on the going concern principle and
receivable management of financial cooperatives.
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Moreover, this research will directly benefit the management and staff of financial
cooperatives. The management can use this study to formulate and develop better effective risk-
management strategies when another crisis occurs. Also, they may study the respondents' shared
experiences as a point of reference for them in learning, establishing, and directing the drive and
capabilities of financial cooperatives.
Furthermore, the outcome of this study can be insightful for accountancy students. The
experiences shared by the respondents could help the students to widen their knowledge and
understanding of what it is like to experience this kind of situation during a pandemic on the
going concern principle and receivable management of financial cooperatives. Also, this research
will serve as a source of related literature for future researchers with a similar topic, which can
provide necessary information to guide them on their research.
Likewise, this research will give benefits to the members of the financial cooperatives.
As investors of a financial cooperative, they co-own part of the company (NCBA CLUSA,
2020). Though aware of the current situation the world is experiencing, this research will provide
more insights into how other financial cooperatives resolve it. Furthermore, this may serve as an
educational guide to the financial cooperatives' members on how accounts receivable
management is processed and how a company applies the going concern principle during these
challenging times.
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Definition of Terms
This section consists of words and terminologies not commonly used by the general
public. The purpose of this section is to help the general public to understand the research
further. The researchers in conducting the study use the following terms:
Assets. A resource with economic value that an individual, corporation, or country owns
or controls, expecting that it will provide a future benefit.
Balance Sheet. The financial statement of a company includes assets, liabilities, equity
capital, total debt, etc., at a point in time. The balance sheet has assets on one side and liabilities
on the other.
Cash flow. The net amount of cash and cash equivalents being transferred into and out of
business.
Credit risk. The possibility of a loss resulting from a borrower's failure to repay a loan or
meet contractual obligations.
Disclosure. In the financial world, disclosure refers to the timely release of all
information about a company that may influence an investor's decision. It reveals both positive
and negative news, data, and operational details that impact its business.
Economic Recession. A significant decline in general economic activity in a designated
region.
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Entity. A juridical person or a corporation registered under the Revised Corporation
Code.
Financial Cooperative. A type of financial institution that is owned and operated by its
members. These institutions offer above-average services and competitive rates in insurance,
lending, and investment dealing.
Financial Statement. Written records that convey the business activities and the
company's financial performance.
Fiscal Year or Period. A one-year period that companies and governments use for
financial reporting and budgeting. Although a fiscal year can start on January 1st and end on
December 31st, not all fiscal years correspond with the calendar year.
Going Concern Principle. The assumption that an entity will remain in business for the
foreseeable future. This principle means the entity will not force its operations to a halt and
liquidate its assets in the near term at what may be low fire-sale prices.
Grace Period. A set length of time after the due date during which payment may be made
without penalty.
Income Statement. A financial statement that shows how profitable the business was
over a given reporting period. It shows the revenue, minus the expenses and losses.
Liabilities. Something a person or company owes, usually a sum of money. Liabilities
are settled over time by transferring economic benefits, including money, goods, or services.
Liquidity. The ease with which an asset, or security, can be converted into ready cash
without affecting its market price.
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Liquidity management. A set of ongoing strategies and processes that ensure the
business can access cash as needed — to pay for goods and services, make payroll and invest in
new opportunities that arise.
Liquidity Ratio. An essential class of financial metrics is used to determine a debtor's
ability to pay off current debt obligations without raising external capital.
Moratorium. A legally mandated hiatus in debt collection from creditors.
Philippine Financial Reporting Standards (PFRS). Accounting standards are adopted
from the International Financial Reporting Standards issued by the International Accounting
Standards Board (IASB). The rationale for using the IFRS/Philippine Financial Reporting
Standards (PFRS) is to ensure consistency in recording, recognizing, and measuring financial
transactions, which, if followed correctly, will provide stability and transparency throughout the
financial reporting process of the company.
Poignant Insights. Painfully affecting the feelings
Receivable. Also referred to as accounts receivable, are debts owed to a company by its
customers for goods or services delivered or used but not yet paid.
Receivable Management. Collecting the payments due for Sales on time.
Scholarly Gains. Suitable to learned persons
Treasury Assets. Marketable or tradable subject to meeting legal obligations such as
payment of applicable stamp duty.
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CHAPTER 2
REVIEW OF RELATED LITERATURES AND STUDIES
This chapter contains literature that the researchers find relevant to the research topic.
The literature review includes foreign and local articles and foreign and local studies found on
the internet.
Foreign Literature
According to the ENJAY (2020), to keep the business running, an entity needs cash, and
receivable management helps keep the cash flow in good condition; a steady cash flow helps an
entity prevent bankruptcy. Also, the article stated the benefits of effective receivable
management. Besides assisting the entity with a better cash flow, effective receivable
management lowers working capital requirements and interest costs and prevents profit leakages.
Moreover, credit policy, setting payment terms, payment follow-ups, and timely collection of
due payments are considered receivable management processes.
15
Furthermore, U.S Bank (2020) stated that to maintain good receivable management
during the COVID-19 Pandemic, financial institutions, including cooperatives, must consider
how customers' payments and deposits are collected efficiently and faster. Offering an array of
electronic payments can help boost the financial institution's cash flow. It can collect payments
and deposits timely and faster, and it is the more convenient and safer payment option for the
customers.
Also, they said that considering the staff to work from home and ensure that they have
the best tools to use to maintain work efficiency and process payments and deposits of clients
without disruptions. The solutions that financial institutions can apply to have good receivable
management are the following: enable electronic payment and billing options, remote deposit
capture, and an integrated receivables platform that offers automated accounts for a convenient
and hassle-free transaction (U.S Bank, 2020).
Meanwhile, Jomo & Chowdhury (2020) pointed out that the disruptive and costly effect
of COVID-19 on businesses, governments have adopted various monetary and fiscal measures to
revive and sustain economic activities. Such measures include cash transfers to households,
extending unemployment insurance or social security benefits, temporarily deferring tax
payment deadlines, and increasing credit guarantees and loans to businesses.
Also, they stated that central banks have not been able to repair enterprises' balance
sheets or drawback excess liquidity to fear triggering financial sector collapse. Thus, they have
unintentionally increased financial fragility by injecting more liquidity, inadvertently growing
speculation.
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Furthermore, Liddy (2020) stated that the recovery of the economy back to a healthy state
might take quite some time. Thus, the focus of financial services business leaders across the
globe is consistently on six principle challenges in dealing with the impact of COVID-19 and in
dealing with the increasingly stringent containment measures that governments are putting in
place.
Consequently, the six principles mentioned by Liddy are the treatment of financial
institutions to their employees, the role of financial institutions to customers, assessment of
liquidity, supplier relationships and third-party dependency, communications and transparency,
and scenario planning.
However, Koulouridi et al. (2020) stated that today's financial systems are more equipped
for rapid crisis management than in the past. The COVID-19 pandemic triggers specific
implications for managing and mitigating credit risk. Subsequently, the conventional sources of
data used in credit risk assessments became obsolete. As a result, financial institutions have been
adjusting to new dynamics and exploring new approaches to face the challenges of the pandemic
crisis.
Local Literature
Villanueva (2020) pointed out that as the pandemic situation prolongs, financial entities
may struggle to assess the impact of the pandemic on their business operation and financial
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statement. They may face challenges in closing the books and in preparing interim and annual
financial statements. Another challenge during the pandemic is assessing whether a financial
entity will continue to be a going concern. Thus, they are required to evaluate the going concern
assumption while preparing financial statements. If such assumption is no longer valid or
significant doubt on the continuity of a financial entity, a disclosure is a must.
Meanwhile, Diokno (2020) stated that the going concern assumption is being used
nowadays by the public in making financial decisions. The volatility, uncertainty, complexity,
and ambiguity in the financial system of the Philippines have intensified due to the COVID-19
pandemic, and it affects the forecasting and planning of financial institutions.
However, Diokno stresses that financial institutions can effectively manage underlying credit
risk using BSP's credit risk management guidelines. In addition, the Bangko Sentral ng Pilipinas
(BSP) intensively monitored the liquidity position of financial institutions during the community
quarantine period, for it might cause a massive number of clients to withdraw their deposits that
can affect the cash flow of the financial entity.
On the other hand, Diamada (2020) stated that the cash flow of financial institutions
might be affected due to the decrease in demands of consumers during community quarantine
and disrupted business operations. There might be an increase in non-performing loans without
adequate risk management as clients struggle to pay their loans. Financial institutions need to
build a dynamic credit framework and credit scores incorporating pandemic risks and
restructuring loan terms for existing borrowers. These may help financial institutions in
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receivables management and serve as their key to keeping their existing clients' trust and
attracting more clients.
According to Pricewaterhouse Coopers (2020), almost half of business financial entities
are greatly concerned about the impact of COVID-19 on their operations. With only 48%
threatened by the pandemic crisis, they identified financial impact and effects on operations,
potential global recession, and difficulties with funding as the top three significant concerns to
the pandemic. To manage the possible adverse effects, they reduced their level of operations and
started offering new services to adapt to the consumers' needs during the community quarantine.
Moreover, Lugtu, Jr. (2021) said that according to the 2020 Global Study by CRIBIS
Dun & Bradstreet, there is a decrease in clients' punctual payments to their creditors. The Asian
study in 2020 shows that the Philippines is the second-highest degradation rate on timely
payments at 5%. Further, in the late payments to over-90-days class, the Philippines has the
highest degradation rate at 32.2%. The difficulties in collecting clients' accounts receivables were
due to extended lockdowns imposed in the Philippines due to the COVID-19 pandemic.
Subsequently, Piad (2020) stated that the government implemented Bayanihan to Heal as
One Act that mandates financial institutions to implement a 30-day grace period for loan
receivables during the enhanced community quarantine. This Act provides relief to borrowers
and constricts the liquidity of financial institutions. Nonetheless, this leaves financial institutions
to deal with potential impairment loss due to the extension of debt payments because postponing
payment collections distorts the cash flow in duration.
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Foreign Studies
According to the study of Lentner and Zoltan (2018) entitled "The Changing Role of
Going Concern Assumption Supporting Management Decisions After Financial Crisis," credit
risk is one of the significant risks in the life of a business in any industry, including financial
institutions. Since it is highly dependent on money, the risk of bankruptcy always exists. Without
the going concern assumption, there cannot be any realization of any operational strategy
because the continuity of an entity is in danger. Therefore, they must simultaneously serve the
business goal and long-term sustainability of the financial entity.
Moreover, based on the study "Credit Risk Management in Commercial Banks"
conducted by Konovalova et al. (2016), the representation of credit risk management could be a
process of many factors. These factors are risk factor identification, assessment of possible
consequences of an identified risk factor, strategies made to counteract the potential
consequences, and monitoring the execution of chosen strategies that aim to minimize the effect
of a given risk factor. Further, the management must monitor the changes in credit risk factors to
quickly provide a solution and control the situation.
Meanwhile, in the study of Ramprathap et al. (2020) entitled "A Study on the Effect of
Receivables Management on Working Capital of VKS Fabrics," they stress that receivables
management is a complex process, as it helps prevent the emergence of bad debts and reduce
costs related to the recovery process. Further, to examine the effects of receivables management,
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it is vital to know the difference between liberalized credit period and profitability. It is the
change in investment receivable levels and costs involved that creates a crucial difference.
A study "Trade Credit Management Strategies in SMEs and the COVID-19 Pandemic,"
by Zimon and Dankiewicz (2020), stated that the decrease of receivables from customers and
maintenance of previous liability resulted in a reduction of the level of credit position ratio.
Moreover, the study shows that a decline in the credit position causes a decrease in ﬁnancial
liquidity. During the pandemic, entities try to collect receivables immediately, thereby
maintaining the level of liabilities towards suppliers at the same level proves a safe corporate
management policy. An analysis of current assets during the COVID-19 pandemic in March and
April of 2020 revealed an increase in cash, a decrease in receivables, and a slight growth in
inventories could be seen compared to 2016–2018. As a result of enhanced control of
receivables, there was a decrease in the turnover of receivables from customers.
According to the study "Impact of Risk Management Strategies on the Credit Risk Faced
by Commercial Banks of Balochistan" by Ur Rehman et al. (2019), some financial institutions
have failed to control their credit risk in the past. However, hedging and capital adequacy ratio
are strategies that financial institutions can apply and optimize. Hedging is a risk management
strategy that offsets investment losses by taking a position of another asset, and it is helpful
because entering into a flexible contract reduces risk. Further, the success and progress of
financial institutions depend on how they will implement the risk management strategies.
Moreover, the study "How Different Types of Financial Service Providers Support
Small-And-Medium Enterprises Under the Impact of COVID-19 Pandemic," conducted by Song
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et al. (2020), stated that pandemic had factors that affect financial service providers (FSP) in
financing small and medium enterprises (SMEs). These factors are the following: the challenge
of having insufficient financial resources and limited information capabilities, and the lack of
coordination with the entities. Commercial banks are primarily concerned about SMEs' data,
expecting to improve their ability to gather information and cooperate. However, credit-
enhanced FSPs are in greater need of capital, an increase in their liquidity, and support from
other financial service providers.
Furthermore, based on the conclusions made in Savova's (2020) study, "Global Impact of
COVID-19 on the Concept of Going Concern," the pandemic has influenced the revenues,
profitability, and net cash availability of the entities in the sample. Disclosures of financial
statements for the prior year regarding the potential implications of the pandemic are consistent
with the information provided in the financial statements for the first quarter of the current
period. This information is helpful for future creditors in terms of the forecasts on liquidity
difficulties. Therefore, the global impact of the COVID-19 pandemic provoked adequate, well-
reasoned, and purposeful actions for the protection and continuation of economic activities of
entities, which is the core substance of the going concern concept and principle in the financial
reporting of entities.
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Local Studies
According to the study entitled "COVID-19: Impact on The Economic of a Nation,"
conducted by Cipriano et al. (2020), the financial and insurance activities were not directly
affected by the pandemic despite the lockdown policy created on business industries. The
financial institution continues its operation during lockdown because its service is a necessity.
Even though financial activities are not directly affected by the pandemic, it still affects the
Philippines' economy.
On the other hand, in a study "The Effect of Credit Risk and Capital Adequacy on the
Profitability of Rural Banks in The Philippines" conducted by Mendoza and Rivera (2017),
banks should establish a credit risk management that starts with the initiation of clients to the
approval of loans. They need to enhance internal control measures to guarantee the strict
implementation of the internal process on lending operations, and they also need to examine the
level of loan losses.
Synthesis
The related literature and studies present information about financial institutions’
receivable management and going concern principle during a crisis like the COVID-19
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pandemic. In addition, the literature and studies also contain effective strategies to serve the
clients during rough times.
One of the significant risks in financial institutions is the risk of bankruptcy since the
entity depends on money. Therefore, a healthy cash flow is necessary for the financial entity to
keep going, and effective receivable management is needed. Due to the COVID-19 pandemic,
the lockdowns influenced the profitability, net cash, forecasting, and financial institutions'
planning. Furthermore, it is essential to evaluate if an entity is a going concern, especially today
that the COVID-19 pandemic provoked adequate and purposeful actions to continue the
economic activities of financial institutions.
Moreover, the government implemented an act that mandates financial institutions to give
clients a 60-day grace period for loan payments, which is beneficial for the clients. However, for
financial institutions, this can result in impairment loss and cash flow distortion. Nevertheless, it
can be managed effectively with adequate credit risk management policies, such as reforming the
loan terms, creating a new credit framework that incorporates pandemic risks, and enhance
internal control measures.
24
CHAPTER 3
METHODOLOGY
This chapter presents the methodology used for collecting data for the study. It explains
the study of research design, population and sample, data gathering procedure, and hypothesis
testing. It also gives details about the data gathering procedure and hypothesis testing to be used
in the study.
Research Design
The type of research that the researchers conducted is the Descriptive Research.
Descriptive Research describes a population, situation, or phenomenon that is being studied. The
focus of descriptive research is to answer the how, what, when, and where questions of a
research problem, rather than questioning or investigating why it exists in the first place
(Formplus, 2020).
25
Furthermore, this type of research is practical for research on a topic or problem that is
not yet known. Descriptive research is an appropriate choice when the research aim is to identify
characteristics, frequencies, trends, and categories. Specifically, the descriptive survey research
uses surveys to gather data about varying subjects. This research focuses on the extent to which
different conditions can be obtained among these subjects. Accordingly, the researcher can better
describe the qualifications possessed by the employed demographics of this community
(McCombes, 2020).
Population and Sample
The population of this research is the National Confederation of Cooperatives (NATCCO
Network) Employees' Cooperative or NEC Multipurpose Cooperative. NEC Multi-Purpose
Cooperative started as a cooperative for employees of the NATCCO Network (NATCCO, n.d.)
with branches located in Batasan and Cubao, Quezon City, Daet, San Pedro and Taguig.
Furthermore, the scope of their branches is sufficient for the research. Indeed, the situation of
each branch during the pandemic differs from one another.
26
Figure 3.1
Population of the Respondents
According to Husaini Usman (2018), the population comprises all the values of the
results of calculations and measurements, quantitative and qualitative, of specific characteristics
regarding a group of complete and precise objects. A collection of the subset from the population
consists of 17 respondents who are two bookkeepers, three auditors, five managers, and seven
policymakers of NATCCO Employees Multi-Purpose Cooperative.
The researchers used the Purposive Sampling Method, in which the researchers will rely
on their judgment when choosing members of the population to participate in the study. Also, it
is a form of non-probability sampling (Dudovskiy, 2012). Non-probability sampling focuses on
sampling techniques where the basis for the investigated units is on the researcher's judgment
(Lærd Dissertation, n.d.). Along these lines, researchers often utilize a purposeful sampling
technique to select informants based on their particular knowledge of, and experience with, the
27
focus of empirical inquiry (Robinson & Michalos, 2014). As the number of respondents is
lacking and all of them will be essential for the research, non-probability sampling is reasonable.
Data Gathering Procedure
The following procedures will show the researchers' steps to gather data. At first, the
researchers will provide a formal letter to the human resource head and general manager of the
NEC Multi-Purpose Cooperative, which will serve as permission to conduct the survey. The
letter also includes permission to give researchers the selected respondents' e-mail addresses: the
policymakers, managers, auditors, and bookkeepers. After the permission letter is approved and
the respondents' e-mail addresses were provided, the researchers will e-mail them the survey and
interview questionnaires made through a google form. The data gathered will not be disclosed to
any person other than the researchers and authorities concerned with this research.
Furthermore, a procedure like an online survey to obtain research data is similar to the
study of Song et al. (2020) on “How different types of financial service providers support small-
and medium- enterprises under the impact of COVID-19 pandemic: from the perspective of
expectancy theory.” This procedure further emphasizes the situation during the COVID-19 and
ensures the health of the researchers and the respondents.
28
Hypotheses Testing
The researchers used different hypothesis testing methods to develop relevant findings to
reconcile with the hypotheses established in chapter one of this study.
Relative Frequency. This method is used to get the percentage from a particular data.
The researchers will be using this tool in the demographic portion of the survey questionnaire.
𝑓
𝑅𝑓 = 𝑥 100%
𝑛
Where:
Rf = Relative Frequency of the data concerned;
f = Frequency of the data concerned;
n = total number of data
Weighted Mean. This method is used to get the respondents' valuable information about the
Likert-scale questionnaire administered by the researchers. The result obtained from using this
formula will help the researchers to obtain the necessary interpretations on the valuable inputs
needed to address the established problems. The formula is shown below (Blay, 2007):
𝑥1 (𝑤1 ) + 𝑥2 (𝑤2 ) + ⋯ 𝑥𝑛 (𝑤𝑛 )

𝑋𝑤 =
𝑤1 + 𝑤2 + ⋯ 𝑤𝑛
Where:
𝑋𝑤 = Weighted Mean of the data concerned;
xn = represents the data considered;
29
wn = represents the weight of the data considered. In relation, the Likert scale’s assigned
numerical value was used as the weights.
Interpretation:
1. The result would show where the data would fall under the table shown below.
Furthermore, the researchers would be able to develop relevant information needed to
formulate the findings, conclusion, and recommendation.
Table 3.1
Likert Type Mean Interpretation
Likert Type Mean Interpretation
Range of Weighted Mean Interpretation
1.00 – 1.79 Does not significantly affect
1.80 – 2.59 Does not affect
2.60 – 3.39 Affects
3.40 – 4.00 Significantly Affects
Chi-Square Test of Independence. The researchers used this method to compare the
significant relationship considered by the respondents on the factors that would affect the going
concern principle and receivable management of financial cooperatives during the pandemic.
The researchers believed that it was only just to use this method because the information
obtained was nominal, hence the non-parametric test. (CFI, n.d.)
The formula is (Blay, 2007):
30
(𝑂𝐹 − 𝐸𝐹)2
𝑋2 = ∑
𝐸𝐹
Where:
X2 = Chi-Square Result;
OF = Observed Frequency or the actual information from the
respondents;
EF = Expected Frequency or the expected information from the
respondents;
Interpretation:
1. The result would show the independence of the factors considered by the respondents
on the relationship of the COVID 19 pandemic on the going concern principle and
2. The chi-square test result would be compared to the critical value based on the degree
of freedom at 0.05 level of significance. When the result shows a lesser value than
the critical value, the conclusion will be no significant relationship. Otherwise, a
significant relationship could be implied when the result is higher than the critical
value.
3. Moreover, when considering the p-value, when the value is less than 0.05, there is a
significant relationship. When the value is at least 0.05, then there is no significant
relationship.
31
CHAPTER 4
RESULTS AND DISCUSSION
This section presents a detailed description of the data collected for the study and the
procedure used to analyze the data. The data are presented in tables and graphs following the
research sequence regarding the COVID-19 pandemic's impact on going concern principles and
Profile of the Respondents
Table 4.1
Profession of the Respondents and the Branches of the Financial Cooperative
Total
Profession and Branch Policymaker Manager Auditor Bookkeeper
Branches
Batasan, Quezon City 1 1 1 1 4
Cubao, Quezon City 2 1 - - 3
Daet City 2 1 - - 3
San Pedro City 1 1 1 1 4
32
Taguig City 1 1 1 - 3
Total Profession 7 5 3 2 17
The data above represents the profile of the respondents according to their professions.
The profession is vital to the research because of their expertise on the topic of the research. The
graph indicates that most respondents are policymakers, with seven (7) followed by managers
with five (5). The auditors, on the other hand, got three (3), and bookkeepers with two (2). The
respondents were chosen according to their profession. In addition, the respondents mentioned
on the graph have a direct relation to the research.
In addition, table 4.1 indicates the number of NATCOO employees according to their
respective branches. San Pedro City and Batasan, Quezon City branches have the highest
respondents with four (4) each. The rest of the branches, Cubao, Quezon city, Daet city, and
Taguig city, have the same number of respondents with three (3) each. The branches of the
financial cooperative are essential in determining the effects of the COVID-19 pandemic in each
branch.
Table 4.2
Total Number of Members in the Cooperative for Each Branch
Average number of
Branch
members
Batasan, Quezon City 3559
Daet City 3493
Cubao, Queson City 3441
Taguig City 3106
San Pedro City 2737
33
The total number of members in each branch is necessary to determine the scope of the
branch’s receivables. In determining the total number of members, the researchers use the
average of each branch. Accordingly, the branch in Batasan, Quezon city, has the highest number
of members, with an average of 3,559 members. The branch in Daet city has an average of 3,493
members. While the branch in Cubao, Quezon city, on the other hand, has 3,441 members. The
Taguig City branch has an average of 3,106 members. Lastly, the branch of San Pedro city has
the lowest among the five branches win an average of 2,737 members.
Table 4.3
Years of the Existence of the Cooperative Branch
Branch Years
Batasan, Quezon City 12
Daet City 12
San Pedro City 11
Cubao, Queson City 10
Taguig City 9
The years of the existence of the cooperative branch are essential for the going concern
principle of the financial cooperative. Similar to the total number of members in each branch, the
average was taken. The branches in Batasan, Quezon city, and Daet City have existed for twelve
(12) years. The branch of San Pedro city has existed for eleven (11) years, Cubao, Quezon city
branch for ten (10) years, and the Taguig city branch for nine (9) years.
34
Measures taken to ensure continuity of business operations during the COVID-19
pandemic
Table 4.4
Measures Taken to Ensure Continuity of Business Operations during the COVID-19 Pandemic
Survey Questions SA A D SD MT
The company immediately responded with the 4 13 0 0 17
complications caused by the pandemic. 24% 76% 0% 0% 100%
The company has implemented adequate policies 4 13 0 0 17

to serve its clients a quality service. 24% 76% 0% 0% 100%
The approaches taken by the financial cooperative 4 13 0 0 17

to ensure continuity of operation are efficient and
appropriate for the situation. 24% 76% 0% 0% 100%
The company imposed numerous policies to 4 13 0 0 17

ensure continuity of business operation. 24% 76% 0% 0% 100%
The company is prepared for a situation like the 2 11 4 0 17

COVID-19 pandemic and already has a set of
rules organized. 11% 65% 24% 0% 100%
18 63 4 0 85
Margin Total
21% 74% 5% 0% 100%
Table 4.4 shows the tally and marginal total of five questions answered by the
respondents about the measures taken by the management of cooperatives to ensure the
continuity of business operations during the COVID-19 pandemic. The respondents selected
35
Agree the most with 74% marginal total, followed by Strongly Agree with a marginal total of
21%, Disagree with a marginal total of 5%. None of the respondents selected Strongly Disagree.
For the interview, the respondents answered the question, what are the measures or
actions taken by the management to ensure the continuity of business operations of the
cooperative? Most of the respondents answered the implementation of the skeletal workforce or
work from home set-up. They also gave emphasis on their cooperative’s compliance with the
health protocols implemented by the government. Furthermore, the financial cooperative is
constantly monitoring and reviewing their receivables, targets, and financial statements to ensure
the entity’s continuity of operation.
Credit and Collection Policy
Table 4.5
Credit and Collection Policy
With the implementation of a 60- day moratorium 6 11 0 0 17
on loan payments last September 11, 2020, there
35% 65% 0% 0% 100%
has been an increase in delay on loan payments.
The new policy for the collection of loan 6 7 2 2 17

payments has been beneficial to the cooperative. 35% 41% 12% 12% 100%
The new policy for the collection of loan 4 12 1 0 17

payments has been beneficial to the customers of
24% 71% 6% 0% 100%
the cooperative.
36
The new policy is flexible enough to deal with the 6 7 3 1 17

unusual liquidity pressures brought by lockdowns. 35% 41% 18% 6% 100%
The management gives due consideration to 7 10 0 0 17

clients while making the new credit and collection
41% 59% 0% 0% 100%
policy.
29 47 6 3 85
Margin Total
34% 55% 7% 4% 100%
respondents about the credit and collection policy implemented by cooperatives during the
COVID-19 pandemic. The respondents selected Agree the most with a marginal total of 55%,
Strongly Agree with a 34% marginal total, Disagree with a marginal total of 7%, and Strongly
Disagree with a 4% marginal total.
For the interview, the respondents answered the question, what were the credit and
collection policies implemented by the cooperative, and were they beneficial to the company's
financial health overall? The respondents stated that the financial cooperative restructured its
program by reprocessing and extending the loans, adjusting monthly amortizations, and updating
the accounts of its members. In addition, the financial cooperative also gave financial aid to its
members. Many of the respondents believed that the credit and collection policies implemented
by the financial cooperatives were beneficial both to the financial health of the company and its
members.
37
Going Concern Principle
Table 4.6
Going Concern Principle
The COVID-19 pandemic has affected the 11 6 0 0 17
revenues of the cooperative. 65% 35% 0% 0% 100%
The company's liquidity has been a challenge this 11 4 1 1 17

past year (2020). 65% 24% 6% 6% 100%
The company is at risk of not meeting 2021 4 8 4 1 17

financial covenants. 24% 47% 24% 6% 100%
The financial statements of the company for the 5 12 0 0 17

past year until now have been satisfactory. 29% 71% 0% 0% 100%
There is substantial doubt about the company's 6 5 3 3 17

ability to continue as a going concern for a
reasonable time. 35% 29% 18% 18% 100%
37 35 8 5 85
Margin Total
44% 41% 9% 6% 100%
respondents about the going concern principle of the cooperatives. The respondents selected
Strongly Agree with a 44% marginal total, Agree with a 41% marginal total, Disagree with a
marginal total of 9%, and Strongly Disagree with a marginal total of 6%.
38
For the interview, the respondents answered the question, Has the company already
recovered from the complications brought by the COVID-19 pandemic? If not, how long do you
think it will take for the company to get to its pre-COVID-19 condition? More than half of the
respondents answered that the cooperative has recovered from the complications or challenges
brought by the COVID-19 pandemic. The respondents stated that they have almost recovered
though they have made a lot of adjustments. Meanwhile, the other half of the respondents who
answered no estimated that the financial cooperative may recover from six months to a year, with
other respondents replying two to three years from now.
Accounts Receivable Management
Table 4.7
Accounts Receivable Management
There has been a rise in bad debts written off since 3 12 2 0 17
the start and during the pandemic. 18% 71% 12% 0% 100%
The accounts receivable turnover has been 3 12 1 1 17

satisfactory for the current accounting period. 18% 71% 6% 6% 100%
There are difficulties in collecting payments and 7 10 0 0 17

deposits from clients during lockdowns. 41% 59% 0% 0% 100%
The cooperative has adequate policies and 4 13 0 0 17

guidelines on measuring the performance of
24% 76% 0% 0% 100%
accounts receivable during the pandemic.
39
The accounts receivable management of the 4 13 0 0 17

cooperative during the pandemic has been
24% 76% 0% 0% 100%
efficient.
21 60 3 1 85
Margin Total
25% 71% 4% 1% 100%
respondents about accounts receivable management of the cooperatives. The respondents
selected Agree the most with a marginal total of 71%, Strongly Agree with a 25% marginal total,
Disagree with a marginal total of 4%, and Strongly Disagree with a marginal total of 1%.
For the interview, the respondents answered the question, are the collected loan payments
and cash deposits sufficient for a good cash flow? If not, then why? Most of the respondents
stated that the loan payment and cash deposits are not sufficient for a good cash flow. They
justified their responses by reasoning that the percentage of the collection will not suffice the
fund requirements and loan payments are not sufficient. On the other hand, people who answered
yes reasoned out that although the loan payments are not sufficient, the increase in deposits will
help the financial cooperative sustain its cash flow.
For the interview, the respondents answered the question, did you give any grace periods
to your members who had difficulty with payment? If you have, how many days, weeks, or
months did you give? All the respondents answered yes. Furthermore, the days given by the
respondents varied from five (5) days grace period up to three (3) months of grace period for its
members.
40
Significant Relationship in the Effects of the COVID-19 Pandemic on the Going Concern
Principle and Receivable Management as Perceived by Selected Financial Cooperatives
Table 4.8
Degree of Relationship of the Impact of the COVID-19 Pandemic on the Going Concern
Principle and Receivable Management of the Financial Cooperative
Degree
x2 A
Statement of the Problem of Interpretaion Hypothesis
Value value
Freedom
Coronavirus
Measures were taken by the
pandemic
financial cooperative to ensure
has a
continuity of their business 10.67 4 7.81 Significant
significant
operations during the COVID-19
relationship
pandemic
on the going
concern
Credit and collection policy 10.67 4 7.81 Significant principle
and
Going Concern Principle 10.67 4 7.81 Significant receivable
management
of financial
Accounts receivable management 10.67 4 7.81 Significant
cooperative.
The table above illustrates that there is significant relationship between the impacts of
the COVID-19 pandemic on the going concern principle and receivable management of financial
cooperative.
41
CHAPTER 5
CONCLUSIONS AND RECOMMENDATIONS
Conclusions
The researchers examine how the pandemic impacts the Going Concern Principle
and Receivable Management of Financial Cooperatives. The researchers studied how financial
cooperatives face and cope with the difficulties brought by the pandemic to the business
operations, the credit and collection policies they needed to revise in order to cope with the crisis
brought by the pandemic, and how they kept the business working despite the current situation.
The research findings proved that there is a significant relationship between the effects of
the COVID-19 pandemic on the going concern principle and receivable management of the
financial cooperative. At the start of the pandemic, there has been an increase in bad debts
written off and delays in loan payments of clients, resulting in insufficient cash flow. However,
the cooperative immediately responded by giving their clients a maximum of 3 months’ grace
period to pay their loan. Furthermore, to ensure the continuity of business operations they
42
implemented a skeletal workforce with compliance on health protocols required by the
government. Also, constant monitoring of receivables and reviewing of financial statements are
done by the cooperative to ensure the continuity of business operations. NEC Multipurpose
Cooperative stated that some of their cooperative branches have recovered from the disruptions
brought by the pandemic. Some need one year to three years to fully recover. They have adapted
to the changes brought by the pandemic and restructured their policies to ensure the business
operations’ continuity.
Recommendations
The following recommendations are offered by the researchers based on the results and
conclusion of this research:
1. Financial cooperatives should constantly monitor and review their receivables and
financial statements to ensure the entity’s continuity of operation. Financial
cooperatives should strengthen the health of their business, such as enhancing their
liquidity that would prevent the cooperatives from bankruptcy.
2. Financial cooperatives should reconstruct their policies regarding receivable
management, such as extending loan payments for a reasonable time or giving
incentives to clients that will pay on time for consecutive months. In that way, it
43
would help the cooperative sustain a good cash flow while its members are also
benefiting.
3. Members of financial cooperatives should have basic knowledge about the
cooperatives’ system and should consider fortuitous events, like pandemic, to be
prepared and avoid such problems like being a delinquent borrower, in order to
safeguard the cash flow of financial cooperatives.
4. Future researchers should look deeper into the impact of the pandemic or focus on
other aspects of accounting that they think the pandemic has affected. This can also
add as resources about providing more facts and resources about the impact of the
pandemic on college readiness for today and future generations.
44
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53
APPENDIX A
SURVEY QUESTIONNAIRE
This survey contains questions about the impact of the COVID-19 pandemic on the accounts
receivable management and going concern principle of a financial cooperative. This
questionnaire was prepared by the students from San Pedro College of Business Administration.
The data gathered will be treated confidentially. Thank you for your cooperation.
Profile of Respondents
Name (Optional):
Name & Branch of the Cooperative:
Years of existence of the Cooperative branch:
Total number of members in the Cooperative branch:
Profession: Policymaker ⃝ Auditor ⃝ Bookkeeper ⃝ Manager ⃝
Directions: Please check (✔) and give a rating based on the statements given using the following
scales:
1- Strongly Agree 2- Agree 3- Disagree 4- Strongly Disagree
Measures taken to ensure continuity of business operations

1 2 3 4
during the COVID-19 pandemic
The company immediately responded with the complications caused

by the pandemic.
54
The company has implemented adequate policies to serve its clients

a quality service.
The approaches taken by the financial cooperative to ensure

continuity of operation are efficient and appropriate for the
situation.
The company imposed numerous policies to ensure continuity of

business operation.
The company is prepared for a situation like the COVID-19

pandemic and already has a set of rules organized.
Credit and Collection Policy 1 2 3 4
With the implementation of a 60- day moratorium on loan payments

last September 11, 2020, there has been an increase in delay on loan
payments.
The new policy for the collection of loan payments has been
beneficial to the cooperative.
The new policy for the collection of loan payments has been
beneficial to the customers of the cooperative.
The new policy is flexible enough to deal with the unusual liquidity
pressures brought by lockdowns.
The management gives due consideration to clients while making
the new credit and collection policy.
55
Going Concern Principle 1 2 3 4
The COVID-19 pandemic has affected the revenues of the

cooperative.
The company's liquidity has been a challenge this past year (2020).
The company is at risk of not meeting 2021 financial covenants.
The financial statements of the company for the past year until now
have been satisfactory.
There is substantial doubt about the company's ability to continue as

a going concern for a reasonable time.
Accounts Receivable Management 1 2 3 4
There has been a rise in bad debts written off since the start and
during the pandemic.
The accounts receivable turnover has been satisfactory for the

current accounting period.
There are difficulties in collecting payments and deposits from

clients during lockdowns.
The cooperative has adequate policies and guidelines on measuring
the performance of accounts receivable during the pandemic.
The accounts receivable management of the cooperative during the
pandemic has been efficient.
56
APPENDIX B
INTERVIEW QUESTIONS
Directions: Please answer the following questions.
1. What were the credit and collection policies implemented by the cooperative, and were
they beneficial to the company's financial health overall?
2. What are the measures or actions taken by the management to ensure the continuity of
business operations of the cooperative?
3. Has the company already recovered from the complications brought by the COVID-19
pandemic? If not, how long do you think it will take for the company to get to its pre-
COVID-19 condition?
4. Are the collected loan payments and cash deposits sufficient for a good cash flow? If not,
then why?
5. Did you give any grace periods to your members who had difficulty with payment? If
you have, how many days, weeks, or months did you give?
57
APPENDIX C
REQUEST LETTER
58
APPENDIX X
CERTIFICATION
San Pedro College of Business Administration Research Form

KM30, Old National Highway, Brgy. Nueva, San Pedro City, Laguna
Tel no. 8869 – 1573 / 8869 – 7397 Research
www.spcba.edu.ph Form No. 06
www.facebook.com/mySPCBA
GRAMMARIAN’S CERTIFICATION
This is to certify that the undersigned has carefully reviewed the study entitled “Impact
of Covid-19 Pandemic on the Going Concern Principle and Receivable Management of
Financial Cooperatives” developed by BAYSIC, John Paul, COSICO, Zion Malachi &
TABULDAN, Ma. Deanielle Anne; with the set of structural rules that govern the composition of
sentences, phrases, and words in the English language. Also, all corrections and
recommendations made have been done and/or incorporated in the final manuscript.
Issued this 12th day of November, in the year of our Lord, two thousand and twenty-one.
Signed
Analyn D. Irinco
Grammarian / English Editor
59
San Pedro College of Business Administration Research Form

KM30, Old National Highway, Brgy. Nueva, San Pedro City, Laguna
Tel no. 8869 – 1573 / 8869 – 7397 Research
www.spcba.edu.ph Form No. 07
www.facebook.com/mySPCBA
STATISTICIAN’S CERTIFICATE
This is to certify that the thesis entitled “Impact of Covid-19 Pandemic on the Going Concern
Principle and Receivable Management of Financial Cooperatives.”
Prepared by:
BAYSIC, John Paul
COSICO, Zion Malachi
TABULDAN, Ma. Deanielle Anne
For the degree of:

Has undergone careful statistical analysis and has been reviewed by the undersigned.
Signed in the 15th of November in the year of our Lord 2021 at Climaco St., Barangay San
Vicente, San Pedro City, Laguna.
Signed
Jan Michael J. Valoroso

Contact Number: 09204997251
60
CURRICULUM VITAE
JOHN PAUL BAYSIC

B3 L7 Villa Paz Village, Barangay Landayan | San Pedro City, Laguna 4023 |
09158650872 | 19100836@spcba.edu.ph
Objective
A motivated accountancy student eager to develop and improve his deductive reasoning,
mathematical, and problem-solving skills. To employ his knowledge and experience to secure a
professional career with opportunities for challenges and career advancement.
Skill Highlights
● Critical thinking
● Proficient in Microsoft Office
● Organization and attention to
● Team collaboration
detail
● Time management
Work Experience
Work Immersion (October 2017 – November 2017)
CREOTEC Philippines Inc., Binan City
● Maintain payroll information by calculating, collecting and entering data.
Service Crew (October 2018 – February 2019)
Pizza Hut Inc., San Pedro City
Education
San Pedro College of Business Administration – San Pedro City, Laguna
2019 – Present
Polytechnic University of the Philippines – Sta. Mesa, Manila
2018-2019
High School Diploma
Liceo De San Pedro – San Pedro City, Laguna
2012-2018
● High Honors
● Best in Conduct
61
ZION MALACHI COSICO

B-5 L-54 Falcon St., Camella Woodhills | San Pedro City, Laguna 4023 |
09750191013| zioncosico1269@gmail.com
Objective
I am a highly creative thinker and a resourceful individual seeking any position to further
enhance and expand my knowledge and analytical skills.
Skill Highlights
● Leadership skills ● Proficient in Microsoft Office
● Accounting skills ● Creative
● Flexible and Adaptable ● Interpersonal skills
● Excellent time management
Work Experience
English Online Teacher (February 2021- November - 2021)
Acadsoc
● Teaching Chinese students
Work Immersion (September 2016 - October 2016)
● Payroll Team Leader of Accountancy Department
● Do the payroll of all employees
Education
2019 – Present
Adamson University – Manila
2018 - 2019
Senior High School Diploma
University of Perpetual Help System JONELTA – Binan City
2016 - 2018
62
MA. DEANIELLE ANNE TABULDAN

B8 L14 Diamond St., Filinvest 2-A, Brgy. Langgam | San Pedro City, Laguna 4023 |
09482861387 | deanielleannetabuldan47@gmail.com
Objective
A motivated accountancy student who is enthusiastic about maximizing her analytical and problem-solving skills, which will
benefit her in her chosen career, and seeking to graduate with much knowledge about the accounting profession with the help of
her professors.
Skill Highlights
● Accounting skills ● Proficient in Microsoft Office
● Flexible and Adaptable ● Innovative
● Excellent time management
Work Experience
Work Immersion (October 2017 – November 2017)
 Maintain payroll information by calculating, collecting and entering
data.
Education
2019 - Present
Technological Institute of the Philippines – Quiapo, Manila
2018-2019
High School Diploma
Liceo De San Pedro – San Pedro City, Laguna
2012-2018
● High Honors
● CREOTEC AWARDEE – Best in Work Immersion in ABM strand
63

Impact of COVID-19 on Financial Cooperatives' Going Concern and Receivables

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SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION

Km. 30 Old National Highway, Brgy. Nueva, San

Impact of COVID-19 Pandemic on the Going Concern Principle

An Undergraduate Thesis Presented to the

In Partial Fulfilment of the Requirements for the Degree of

BAYSIC, John Paul

List of Appendices vii

Background of the Study ` 02

Statement of the Problem 04

Scope and Limitations 09

Significance of the Study 10

CHAPTER 2 REVIEW OF RELATED LITERATURE AND STUDIES

Population and Sample 26

Data Gathering Procedure 28

One Way Chi-square Test 30

CHAPTER 4 RESULTS AND DISCUSSIONS

Profile of the Respondents 32

Measures taken to ensure continuity of

business operations during the COVID-19 pandemic 35

Credit and Collection Policy 36

Going Concern Principle 38

Accounts Receivable Management 39

Significant Relationship in the Effects of the COVID-19

Pandemic on the Going Concern Principle and Receivable

Management as Perceived by Selected Financial Cooperatives 41

CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS

Table Title Page

3.1 Likert Type Mean Interpretation 30

4.1 Profession of the Respondents and

the Branches of the Financial Cooperative 32

4.2 Total Number of Members in the

Cooperative for Each Branch 33

4.3 Years of the Existence of the Cooperative Branch 34

4.4 Measures Taken to Ensure Continuity of Business

Operations during the COVID-19 Pandemic 35

4.5 Credit and Collection Policy 36

4.6 Going Concern Principle 38

4.7 Accounts Receivable Management 39

4.8 Degree of Relationship of the Impact of the

COVID-19 Pandemic on the Going Concern Principle

and Receivable Management of the Financial Cooperative 41

Figure Title Page

1.1 Research Paradigm 06

3.1 Population of the Respondents 27

Appendix Title Page

THE PROBLEM AND ITS SETTING

have their businesses to file for bankruptcy.

transactions repayment of loans, collections, and withdrawal deposits (Sancheti, 2020).

Background of the Study

going concern may no longer be.

Statement of the Problem

on the continuity of business operations and the receivable management of financial

1. What is the profile of respondents in terms of?

1.1. Name and branch of the financial cooperative;

1.2. Years of existence of the cooperative;

1.3. Number of members of the cooperative;

their business operations during the COVID-19 pandemic?

3. What is the credit and collection policy implemented by the respondents?

perceived by the respondents?

5. What is the effect of the COVID-19 pandemic on accounts receivable management as

perceived by the respondents?

concern principle as perceived by selected financial cooperatives?