Bukas Na To Ooo

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
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

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

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.

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

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

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.

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

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

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.

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

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

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.

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:

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.

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

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

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

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

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.

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

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).

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

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).

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) .

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).

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.

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

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).

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).

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

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.

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

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

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) .

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) .

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).

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

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

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

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

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

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.

Las Piñas Campus

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

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

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

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.

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

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

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)

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

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

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

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

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)

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)

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

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

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

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

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.

Las Piñas Campus
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.
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.

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.
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

Las Piñas Campus
employees made an incorrect count of the physical inventory or if inventory theft has
taken place.
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.

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.
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.
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.

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.
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):
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.

Las Piñas Campus
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.
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

Las Piñas Campus
consuming and sometimes costly to buy a shredder since majority of the coffee shops
have just started their business.
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.

Las Piñas Campus
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.
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.

Las Piñas Campus
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):
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.

Las Piñas Campus
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.
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.

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

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):

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):
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.

Las Piñas Campus
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.
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.

Las Piñas Campus
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.
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.

Las Piñas Campus
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):
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.

Las Piñas Campus
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.
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.

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
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

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
CM 1 .810 .460 Accept H0 Not Significant
4.5.2. Monitoring
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
difference between the practice of monitoring and the years of existence of the
business.

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
CIC 1 1.787 .196 Accept H0 Not Significant
CIC 2 .306 .740 Accept H0 Not Significant
4.5.3. IT Control
specifically IT control, when grouped according to years of existence using

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
CPC 1 .488 .622 Accept H0 Not Significant
4.5.4. Physical Control

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)

Las Piñas Campus
Table 14: Differences in the extent of practice for accounting records with
regard to years of existence
CAR 1 1.070 .364 Accept H0 Not Significant
CAR 2 .456 .641 Accept H0 Not Significant
4.5.5. Accounting Records
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,
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

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
CRA 1 1.295 .298 Accept H0 Not Significant
CRA 2 .922 .416 Accept H0 Not Significant
4.5.6. Risk Assessment
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
difference between the practice of risk assessment and the years of existence of the
business.

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
annual net income
CS 2 1.494 .252 Accept H0 Not Significant
4.6.1. Surveillance
specifically surveillance, when grouped according to annual net income using
One-way ANOVA. The results shows that the fraud detection practice of

Las Piñas Campus
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,
during working hours, so this does not in any way relate to how much the business
earns. (Solon, 2017)
annual net income
CM 2 1.169 .351 Accept H0 Not Significant
4.6.2. Monitoring

Las Piñas Campus
specifically monitoring, when grouped according to annual net income using
One-way ANOVA. The results shows that the fraud detection practice of monitoring
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)

Las Piñas Campus
annual net income
4.6.3. IT Control
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
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

Las Piñas Campus
need to take into consideration how much is the company’s yearly revenue.
(Gatto, 2016)
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
4.6.4. Physical Control

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,
difference between the practice of physical control and the annual net income of the

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)
regard to annual net income


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)
to annual net income
CRA 2 1.125 .367 Accept H0 Not Significant

Las Piñas Campus
specifically risk assessment, when grouped according to annual net income using
One-way ANOVA. The results shows that the fraud detection practice of risk
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)

Las Piñas Campus
4.7. Fraud Detection Practices with regard to Number of Employees
number of employees
4.7.1. Surveillance
specifically surveillance, when grouped according to number of employees using
One-way ANOVA. The results shows that the fraud detection practice of
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,

Las Piñas Campus
during working hours, so this does not in any way relate to the number of
employees. (Solon, 2017)
number of employees
CM 1 2.176 .128 Accept H0 Not Significant
CM 2 4.571 .025 Reject H0 Significant
4.7.2. Monitoring
specifically monitoring, when grouped according to number of employees using
One-way ANOVA. The results shows that the fraud detection practice of monitoring
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

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.
number of employees
4.7.3. IT Controls

Las Piñas Campus
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
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
need to take into consideration how many number of employees there are. (Gatto,
2016)

Las Piñas Campus
to number of employees
4.7.4. Physical Controls
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

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)
regard to number of employees
CAR 2 5.161 .017 Reject H0 Significant
specifically accounting records, when grouped according to number of employees

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)

Las Piñas Campus
to number of employees
specifically risk assessment, when grouped according to number of employees
using One-way ANOVA. The results shows that the fraud detection practices of risk
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

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
DSD .441 .650 Accept H0 Not Significant
4.8.1. Segregation of Duties
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
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

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
DS1 .484 .624 Accept H0 Not Significant
DS3 1.429 .265 Accept H0 Not Significant
4.8.2. Supervision

Las Piñas Campus
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
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)

Las Piñas Campus
Table 30: Differences in the extent of practice for independent verification with
DIV1 .527 .599 Accept H0 Not Significant
4.8.3. Independent Verification
specifically independent verification, when grouped according to years of existence
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

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
DSD .780 .521 Accept H0 Not Significant
specifically segregation of duties, when grouped according to annual net income
segregation of duties obtained f-values greater than the 0.05 level of significance set
significant difference between the practice of segregation of duties and the annual
net income of the business.

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


Las Piñas Campus
4.9.1. Supervision
the respondents on the extent of risk management practices on fraud prevention,
specifically supervision, when grouped according to annual net income using
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

Las Piñas Campus
on the management. (Siayor, 2010)

DIV3 1.058 .393 Accept H0 Not Significant
specifically independent verification, when grouped according to annual net income
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.

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
Variable F Sig. Value Decision on Interpretation
Value H0
DSD 1.238 .327 Accept H0 Not Significant
specifically segregation of duties, when grouped according to number of employees
using One-way ANOVA. The results show that the fraud prevention practice of

Las Piñas Campus
segregation of duties obtained f-values greater than the 0.05 level of significance set
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


Las Piñas Campus

4.10.2. Supervision
specifically supervision, when grouped according to number of employees using
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

Las Piñas Campus
actions. It has nothing to do with the number of employees because it depends on
the management. (Siayor, 2010)
DIV3 3.925 .027 Reject H0 Significant
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

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.

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.

percentage of 28.6 out of the total respondents.

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.
implemented for cash theft with a percentage of 76.2 out of the total
respondents.

Las Piñas Campus
implemented for inventory theft with a percentage of 9.5 out of the total
respondents.
implemented for check tampering and forgery with a percentage of 4.8 out
of the total respondents.
2.2 Vendor Fraud
implemented for receiving counterfeit money sales with a percentage of 4.8
out of the total respondents.
implemented for bribery and kickbacks with a percentage of 9.5 out of the
total respondents.
implemented for billing schemes with a percentage of 85.7 out of the total
respondents.
2.3 Accounting Fraud
implemented for personal purchases with a percentage of 4.8 out of the total
respondents.
implemented for fake supplier fraud with a percentage of 42.9 out of the total
respondents.

Las Piñas Campus
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.
implemented for embezzlement with a percentage of 19 out of the total
respondents.
2.4 Payroll Fraud
implemented for timesheet fraud with a percentage of 52.4 out of the total
respondents.
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

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

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

3.2.3 Conducting unannounced visits by the management to check if the
standards of business operations are being met

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.

3.3.3 Setting up controls in the computer system that will alert management
if there are unauthorized attempts of accessing important documents.

Las Piñas Campus
3.3.4 Having a software that alerts management of suspicious activity on a

company network.

3.4 Physical Control
3.4.1 Practicing regular inventory checks.

3.4.2 Consistently counter checking for the invoice of the inventory bought
if it matches the actual inventory count.

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.

3.4.4 Keeping the cash and checks in a locked cabinet or safe that can only
be accessed by authorized or assigned personnel.

3.5 Accounting Records
3.5.1 Assigning a trusted outside contractor to review and reconcile accounts

at regular intervals.

3.5.2 Updating and reviewing the financial records (source documents,
journals, ledgers) on a regular basis.

Las Piñas Campus
3.5.3 Having automated means of checking the attendance and number of

hours worked by an employee.

3.5.4 Reconciling the balance sheets and payroll accounts for each quarter.

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.

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.

Las Piñas Campus

Practiced.
4.2 Supervision
4.2.1 Conducting thorough background checks on new employees.

Practiced.
4.2.2 Ensuring that all the employees are oriented and briefed on the
company policies, rules and regulations.

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.

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.

Practiced.
4.2.6 Requiring staff to immediately report their injuries or accidents and
requiring medical certificates or proof of hospitalization or medical
treatment.

Practiced.
4.3 Independent Verification

Las Piñas Campus
4.3.1 Cross-checking copies of source documents to see if it agrees with

other proof documents.

4.3.2 Verifying signatures before releasing or distributing a said document.

4.3.3 Requesting for authorized signatures from managers or supervisors
before approving timesheets and overtime claims.

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:

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.

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.

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.

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.

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:

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

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

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

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

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

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

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

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/

Bukas Na To Ooo

Transféré par

Informations du document

Description originale:

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Bukas Na To Ooo

Transféré par

Droits d'auteur :

Formats disponibles

University of Perpetual Help System DALTA

Las Piñas Campus

RISK MANAGEMENT ON FRAUD DETECTION AND PREVENTION

Bueron, Louise Jill S.

A Thesis Presented to the

Bachelor of Science in Accounting Technology

Las Piñas City

College of Business Administration and Accountancy

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

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

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

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

College of Business Administration and Accountancy

ensures adequate operations of preventive controls and their results (Dimitrijevicet

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

well as business transactions.

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

BACKGROUND OF THE STUDY

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

College of Business Administration and Accountancy

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

develop their approach on this matter.

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

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

aspect requires improvement and provide possible solutions.

College of Business Administration and Accountancy

Risk management for Risk management for

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

College of Business Administration and Accountancy

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

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

supervision, and independent verification.

STATEMENT OF THE PROBLEM

aims to answer the following questions:

College of Business Administration and Accountancy

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

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

management for fraud detection when grouped according to the profile.

College of Business Administration and Accountancy

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

OBJECTIVES OF THE STUDY

The researchers consider the following as the objectives:

College of Business Administration and Accountancy

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

fraud detection is being practiced in terms of:

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

fraud prevention is being practiced in terms of:

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

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

College of Business Administration and Accountancy

practices of risk management for fraud prevention when grouped according

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