86

CHAPTER 4

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

This chapter summarizes the findings of the study, conclusions and

recommendations based on the conclusions made.

Summary of Findings

This study entitled Forensic Accounting as an Investigation Method on Tax

Fraud as Perceived by the Bureau of Internal Revenue, Delta, Quezon City,

Calendar Year 2016 has a total percentage of respondents which was equivalent

to 23 or 37.70 percent of the total number of field workers on Assessment,

Investigation and Legal division of Bureau of Internal Revenue Revenue

Region 7. The responses obtained from the questionnaire have been tallied,

computed and tabulated.

With respect to the result obtained from the interpretation and analysis of

data, hereunder are the findings the researchers have made:

1. Frequency, Percentage and Rank Distribution of the Respondents in terms of:

1.1 Age. The data revealed that 34.8 percent of the respondents came

from 41 above age bracket, 26.1 percent from below 25, 17.4 percent

from 26-30, 13.0 percent from 36-40 and 8.7 from 31-35.
 87

1.2 Sex. It was found out that of the 23 respondents, 15 or 65.2 percent

were female and 8 or 34.8 percent were male. It shows that majority

of the respondents were female.

1.3 Division. It was found out that of the 23 respondents, 12 or 54.2

percent were from the assessment division, 6 or 26.1 percent were

from legal division, and 5 or 21.7 percent of the respondents were

from investigation division.

1.4 Profession. Based on the data, it shows that greater numbers of the

respondents were Certified Public Accountants with 82.6 percent; two

were lawyers and two were paralegals each with 8.7 percent.

1.5 Years of Employment. The data shows that 56.5 percent of the

respondents were working for the BIR for less than five years; 17.4

percent were from 5-15, and 13.0 percent each from bracket 15-25

and 25 above.

2. Overall Perception of the Bureau of Internal Revenue on Forensic Accounting

as an Investigation Method on Tax Fraud Based in terms of:

2.1 Interview and Interrogation. With a 3.93 general weighted mean, the

respondents Agree. Conducts personal interviews, considers

gathered information as primary source of data, and interviews and

interrogates under law enforcement authority in data gathering had a

verbal interpretation of Agree, Strongly Agree and Agree,

respectively.
 88

2.2 Background Research. It was interpreted as Strongly Agree with a

general weighted mean of 4.55. Collects information from public

databases, inspects corporate records of taxpayers, and

considers gathered information as an independent verification

against oral claims made by respective parties share the same

interpretation of Strongly Agree.

2.3 Electronic and Physical Surveillance. It received an Agree verbal

interpretation with a 3.96 general weighted mean. Uses electronic

surveillance such as internet and e-mail, uses physical surveillance

to verify taxpayers addresses and categorizes information from

surveillance into objective and subjective indicators share the same

interpretation of Agree.

2.4 Confidential Informants. The general weighted mean was 4.52,

hence, gaining a Strongly Agree interpretation. Uses professional

skepticism in assessing information and weighs the value of the

evidence provided against the possibility that it may be false or

cannot be proven both received Strongly Agree while uses hotlines,

letters, current employees and former employees as confidential

informants received an Agree.

2.5 Undercover. Agree were given to performs undercover operations

under a recommendation and executes undercover operations to

obtain first-hand data. However, deliberately deceives target

suspect to gain information that can be converted to evidence was

 89

rated Somewhat Agree only. Overall, with a general weighted mean

of 3.49, it was interpreted as Agree.

2.6 Laboratory Analysis. It was agreed on by the respondents as it had

resulted to a 3.86 general weighted mean. Individually, physically

examines possible fictitious documents, executes extensive

investigatory procedures such as fingerprint analysis, forgeries, ink

sampling and document dating, and relies on computer forensics

such as hard disk imaging, retrieving erased files and usage of

computer software to analyze data received Strongly Agree, Agree

and Agree, respectively.

2.7 Analysis of Financial Transactions. Compares/Contrasts pattern

sensitive data measures to trace evidence back to a source, uses

different accounting methods such as vertical/horizontal analysis, net

worth method, expenditures method, percentage method and unit

and value method, and reviews known industry fraud schemes

were all interpreted with Strongly Agree, therefore, the parameter

also gained a Strongly Agree evidenced by the 4.55 general

weighted mean.

To sum up, the respondents perceived Background Research and Analysis of

Financial Transactions to be the most useful after gathering a general

weighted mean of 4.55.

3. Profile of the Respondents by Division in terms of Age, Sex, Profession and

Years of Employment
 90

3.1 Age

3.1.1 Assessment. 50 percent were from 18-25; 33.3 percent were

from 26-30; and 8.3 percent were from 36-40 and 41 above.

3.1.1 Investigation. 100 percent were aged 41 above.

3.1.2 Legal. 50 percent were from 41 above; 33.3 percent were from

36-40; 16.7% were from 31-35.

3.2 Sex

3.2.1 Assessment. 58.3 percent were female; 41.7 percent were

male.

3.2.2 Investigation. 100 percent were female.

3.2.3 Legal. 60% were male; 40 percent were female.

3.3 Profession

3.3.1 Assessment. All respondents from this division were Certified

Public Accountants.

3.3.2 Investigation. Same as Assessment Division all respondents

were Certified Public Accountant.

3.3.3 Legal. Lawyers, Paralegals and Certified Public Accountants

have an equal percentage of 33.3 percent.

3.4 Years of Employment

3.4.1 Assessment. 91.7 percent of the respondents had been

working for not more than 5 years and 8.3 percent had been

working for 5 to 15 years.

 91

3.4.2 Investigation. Respondents ranged from 5.01 to 15.00 with 20

percent, 15.01 to 25.00 with 40 percent and 25.01 above with

40 percent.

3.4.3 Legal. Brackets below 5.00 and 5.01-15.00 had a percentage

of 33.3 percent and 15.01 to 25.00 and 25.01 and above has

a percentage of 16.7 percent.

4 Perception of the Bureau of Internal Revenue as to Division on Forensic

Accounting as an Investigation Method on Tax Fraud in terms of Different

Parameters

4.1 Assessment Division. The overall interpretation was Agree.

Confidential Informants with average mean of 4.58 had been rated as

the most useful while Undercover was the least with 3.25.

4.2 Investigation Division. Perceived with Agree having a 4.09 general

weighted average. Receiving the highest mean was Background

Research with average mean of 4.80 and lowest mean was

Laboratory Analysis with 3.27.

4.3 Legal Division. According to the data, the overall interpretation was

Strongly Agree with 4.34 general weighted average. Having the

highest mean was Background Research with average mean of 4.61

and lowest mean was Undercover with 4.06.

A 6.16% difference was present from results obtained from Assessment Division

on Interview and Interrogation, Background Research with 4.12%, 1.32% on

Electronic and Physical Surveillance, 3.14% on Undercover, and Analysis on

 92

Financial Transactions with 2.01%. Moreover, Laboratory Analysis of

Investigation Division gained 16.59% and the Confidential Informants from Legal

Division with 3.09%. These are derived when lowest mean is compared to the

median of the general weighted means of all divisions within the similar

parameter.

5. Analysis of Variance on the Significant Difference on the Respondents

Perception on Forensic Accounting as an Investigation Method in terms of

Different Parameters

5.1 Age. Result shows that the researcher failed to reject the hypothesis

therefore there is no significant difference on their perception.

Although, Undercover had been rejected, thus, having significant

differences.

5.2 Sex. The hypothesis was not rejected; as a result, there was no

significant difference. However, Undercover, again, produced an

outcome with a significant difference.

5.3 Division. Based on the data gathered the researchers failed to reject

the hypothesis, hence, there was no significant difference in each item

on their perception.

5.4 Profession. The researchers failed to reject the hypothesis, hence,

there was no significant differences on their perception as to their

profession.
 93

5.5 Years of Employment. According to the data, the researchers failed

to reject the hypothesis, hence, there was no significant differences

on their perception as to their years of employment.

Conclusions

Based on the findings, the researchers came up with the following

conclusions:

1. The respondents who were employees of the Bureau of Internal Revenue

who were involved in dealing with tax fraud were mostly under age group of

40 above categorized as female, Certified Public Accountant and have been

employed for not more than 5 years.

2. With a general weighted mean of 4.12, they agree with forensic

accounting as an investigation method on tax fraud.

3. The respondent perceived forensic accounting as to their division:

3.1 The respondents from Assessment Division agree with forensic

accounting as an investigation method on tax fraud and perceived

Confidential Informants as the most useful and Undercover as the

least.

3.2 The respondents from Investigation Division strongly agree with

forensic accounting as an investigation method on tax fraud and

perceived Analysis of Financial Transactions as the most useful and

Laboratory Analysis as the least.

 94

3.3 The respondents from Legal Division strongly agree with forensic

accounting as an investigation method on tax fraud and perceived

Analysis of Financial Transactions as the most useful and Undercover

as the least.

4. There was no significant difference on the overall perception of the

respondents on forensic accounting as an investigation method on tax fraud

in terms of age, sex, division, profession and years of employment. But

there was a significant difference in the parameter Undercover on the

respondents perception of forensic accounting as an investigation method

on tax fraud in terms of age and sex.

Recommendations

Based in the conclusions drawn, the researchers recommend the following

for the improvement of forensic accounting as an investigation method of Bureau

of Internal Revenue.

For the Bureau of Internal Revenue, they may intensify division campaign

and they may create plantilla items for forensic accountants and forensic

examiners to have separation of duties against the divisions that had been

established by the Bureau of Internal Revenue especially those divisions that

handle tax fraud cases.