Redone Chap-1-4 04132019

RISK MANAGEMENT ON FRAUD DETECTION AND PREVENTION
OF COFFEE SHOPS IN LAS PIÑAS CITY
A Research paper presented to the

College of Business and Accountancy
University of Perpetual Help System DALTA
In Partial Fulfillment
Of the Requirements for the Degree
Bachelor of Science in Accounting Technology
Bueron, Louise Jill S.

Galvez, Glennizze M.
Rovillos, Kenneth Martin D.
Rubillar, Patricia Nicole T.
Sabater, Liezel E
October 2018
APPROVAL SHEET
University of Perpetual Help System Dalta Page |
Las Piñas Campus i
This undergraduate thesis entitled “RISK MANAGEMENT ON FRAUD

DETECTION AND PREVENTION OF COFFEE SHOPS IN LAS PIÑAS
CITY” prepared and submitted by BUERON, LOUISE JILL, GALVEZ,
GLENNIZZE, ROVILLOS, KENNETH MARTIN, RUBILLAR,
PATRICIA NICOLE, SABATER, LIEZEL in partial fulfillment of the
requirements for the degree in BACHELOR OF SCIENCE IN
ACCOUNTING TECHNOLOGY has been examined and recommended
for acceptance and approval for final defense.
PROF. RYAN JAY CARASCO, CPA

Thesis Adviser
ORAL EXAMINATION COMMITTEE
Approved by Oral Examination Committee with the grade of______.
MAICO ANTONIO JR., CPA ANNELEN B. MARCOS, CPA, MBA

Panel Member Panel Member
AMIR AUDITOR, CPA, MSA

Chair Panel
Accepted and approved in partial fulfilment of the requirements for the

degree in Bachelor of Science in Accounting Technology.
LETICIA C. GAMAD, MBA, MAED, DBA

OIC Dean, College of Business Administration and Accountancy
ACKNOWLEDGEMENT
College of Business Administration and Accountancy

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The researchers wishes to express their outmost gratitude
and appreciation for the selfless help of the following individuals:
First and foremost, we would like to thank GOD for sustaining
us and guiding us throughout the entire span of our research, truly
the wisdom and guidance that He provided enabled us to
accomplish all that were required of us.
We would also like to thank our research adviser, SIR RYAN
JAY CARASCO, for his insights and recommendations on how we
were to finalize and continually progress in our research.
We’d also like to acknowledge our research professor, SIR
AMIR AUDITOR, for his unending efforts in sharing valuable inputs
that aided us during the course of our study.

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We would also like to extend our gratitude to OTHER
PROFESSORS, PANELISTS, EVALUATORS who gave their time
and effort to validate our study to ensure its reliability and accuracy.
We extend our thanks to our friends and family who showed us
their never-ending support.
Lastly, we would also like to acknowledge the INSTRUCTOR
from various establishments who patiently and willingly
participated in answering all our queries to help us progress in our
study, without them the study wouldn’t have been possible to
accomplish
-The Researchers

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ABSTRACT
Name of : University of Perpetual Help

Institution System – DALTA
Address : Risk Management on Fraud

Detection and Protection of Coffee
Shops in Las Piñas City
Title : Risk Management on Fraud

Detection and Prevention of Coffee
Shops in Las Piñas City
Author : Louise Jill S. Bueron

Glennizze M. Galvez
Kenneth Martin D. Rovillos
Patricia Nicole T. Rubillar
Liezel E. Sabater
Degree : Bachelor of Science in Accounting

Technology
Date : October 2018

Completed

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This study focused on the risk management on fraud detection
and prevention of coffee shops in Las Piñas City. It was
administered to a purposive and non-probability sample of 42
coffee shops located in Las Piñas City.
This study utilized descriptive quantitative research and
employed statistical treatment of data using frequency,
descriptive, one-way ANOVA, and Post Hoc tests.
As the study concluded there is a significant difference
between the practices of independence verification on the number
of employees with regards to risk management in terms of fraud.
There is also a significant difference between the practice of
keeping accounting records and the number of employees. Lastly,
the study also concluded that there is a significant difference
between the practice of monitoring and the number of employees.
Table of Contents

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TITLE PAGE i
APPROVAL SHEET ii
ACKNOWLEDGEMENT iii
ABSTRACT v
TABLE OF CONTENTS vii
LIST OF TABLES xii
LIST OF FIGURES xix
CHAPTER
1 THE PROBLEM AND ITS SETTING
Introduction 1
Theoretical Framework 6
Conceptual Framework 8
Statement of the Problem 10
Hypothesis 14
Scope and Limitation 15
Significance of the Study 16
Definition of Terms

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19
Review of Related Literature 24
Synthesis 47
2 METHODOLOGY
Research design 51
Population and Sampling 52
Respondents of the Study 53
Research Instrument 55
Validation of Instrument 59
Data Gathering Procedure 59
Statistical Treatment of Data 60
3 PRESENTATION, ANALYSIS AND
INTERPRETATION OF DATA
Problem 1 62
Problem 2 65
Problem 3 69

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Problem 4 86
Problem 5 94
Problem 6 134
4 SUMMARY OF FINDINGS,
CONCLUSIONS AND RECOMMENDATION
Summary of Findings 156
Conclusion 166
Recommendation 170
REFERENCES
List of Website Sources 172
APPENDICES

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A. Letter of Acceptance from Adviser 208
B. Letter for Survey tool of Evaluator 209
C. Survey Instrument 212
D. Letter to Respondents 215
E. Relevant Raw Statistic results 216
F. Certificate of Statistician 228
G. Certificate of Turnitin 229
H. Certificate of Grammarian 230
CURRICULUM VITAE 231

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LIST OF TABLES
Table Title Page
1.1 Years of Existence 62
1.2 Annual Net Income 63
1.3 Number of Employees 64
2.1 Asset Misappropriation 66
2.2 Vendor Fraud 67
2.3 Accounting Fraud 68
2.4 Payroll Fraud 69
3 Descriptives for Fraud Detection 70
Practices
4 Descriptives for Fraud Prevention 87
Practices
5.1 Differences in the extent of practice 95
for surveillance with regard to years
of existence

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for monitoring with regard to years of
existence
for IT control with regard to years of
existence
for physical control with regard to
years of existence
for accounting records with regard to
years of existence
for risk assessment with regard to
years of existence

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for surveillance with regard to annual
net income
for monitoring with regard to annual
net income
for IT control with regard to annual
net income
annual net income
annual net income

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annual net income
for surveillance with regard to number
of employees
for monitoring with regard to number
of employees
5.15 Differences in the extent practice for 124
IT control with regard to number
employees
number of employees

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number of employees
number of employees
for segregation of duties with regard
to years of existence
for supervision of duties with regard
to years of existence
for independent verification with
regard to years of existence

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to annual net income
for supervision with regard to annual
net income
regard to annual net income
to number of employees
for supervision with regard to number
of employees

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regard to number of employees
LIST OF FIGURES
Figures Title Page
1 Conceptual Framework of Risk Management 9

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2 Number of Coffee Shops in Las Piñas City 53
3 Percentage of Respondents of the Study 55

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Chapter 1
THE PROBLEM AND ITS BACKGROUND
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

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against fraud it is important that the business implements fraud
detection and prevention methods to avoid, if not lessen the
chances of fraudulent acts from happening. 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. While 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 ensures adequate operations of preventive
controls and their results (Dimitrijevicet al., 2015).
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

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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 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.
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

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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 one of the risks that falls under the scope of
risk management, as there is no guarantee that it would happen

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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

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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 fraud detection and prevention; it aims to know
what and how the existing practices are being implemented in
the coffee shops in Las Piñas City, the frequency of their risk
management practices and how to improve in these areas.
Theoretical Framework
As mentioned by (Spikin, 2013) there are clear elements
that could explain the current importance of the discipline of risk
management. First of all, the increasing volatility and
competition which organizations have to face is this era, have
forced them to implement at least some level of risk awareness.
On the other hand and related to some very notorious
international scandals such as the Enron case, WorldCom and

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more recently Lehman Brothers, organizations in general are
facing legal requirements by the authorities and regulators, who
are demanding the implementation of increasingly more
sophisticated risk management practices. Moreover, as
technology has helped organizations to be more efficient, it has
also exposed them to different sorts of new significant threats.
As claim by (Spikin, 2013) the elements described have created
new risks and increased the impact and frequency of existing
risks. Hence the modern recognition of risk management as a
process that complements and integrates with other processes
in the organization, in a continuous and formalized manner,
might be a pertinent approach to the reality that entities face.
Conceptual 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

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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.

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Figure 1
Conceptual Framework of Risk Management
Demographic profile
of selected coffee Types of Fraud
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

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With the aid of a descriptive survey we will obtain
necessary data for our research. For instance, on what types of
fraud are the 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 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 coffee shops
in Las Piñas City. Specifically, it aims to answer the following
questions:

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1.) To know the profile of the coffee shops based on their:
1.1 Years of existence
1.2 Annual net income
1.3 Number of employees
2.) To know the types of fraud the business is may have
experienced in terms of:
2.1 Asset misappropriation
2.2 Vendor fraud
2.3 Accounting fraud
2.4 Payroll fraud
3.) To know the extent of the practices of risk management
for fraud detection that is being implemented by the coffee
shops based on:
3.1 Surveillance
3.2 Monitoring
3.3 IT control
3.4 Physical control

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3.5 Accounting records
3.6 Risk assessment
4.) To know the extent of the practices of risk management
for fraud prevention that is being implemented by the coffee
shops based on:
4.1 Segregation of duties
4.2 Supervision
4.3 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.
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.

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Objectives of the study
The researchers consider the following as the objectives.
First was to determine the demographic profile of the coffee
shops in terms of years of existence, annual income, and
number of employees. Second was the type of fraud did the
company encountered in terms of asset misappropriation,
vendor fraud, accounting fraud and payroll fraud. Third was
frequency of the following risk management for fraud detection
is being practiced in terms of surveillance, monitoring, IT control,
physical control, accounting records and risk assessment. On
the next objective the frequency of the following risk
management for fraud prevention is being practiced in terms of
segregation of duties, supervision and independent verification.
Additionally, the significant difference in the frequency of the
practices of risk management for fraud detection when grouped
according to the profile. Last, the significant difference in the

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frequency of the 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.

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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.
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

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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:
Owners of the 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.
Management of the coffee shops. This is beneficial for
the management so that they can pinpoint or reevaluate on any
overlooked or ineffective practices in fraud prevention,

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reassess how well they manage their risks and to provide
solutions on how to improve.
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.
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.

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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 topics.
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 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

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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 such as theft, corruption, conspiracy,

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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

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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 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

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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
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

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illegal or otherwise inappropriate activity. Surveillance
operations carried out involve recording of events, locations,
days or times, and patterns of behaviors or activities. For this
study, surveillance is the process of recording or watching over
the behavior 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.
Related literature
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

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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
management affords a small business an opportunity to thrive,
grow and ultimately enjoy the fruits of success (Brokerage,
2013).
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

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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).
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

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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).
Methods or Techniques of Risk Management
There are four techniques of risk management namely:
avoidance, reduction, transfer, and acceptance.

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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

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prepared to cope with the impact of that in the event that it would
actually happen (Elders Insurance, 2013).
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).
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) .

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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) .
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

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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).
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).
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).

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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.
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.

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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.
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.
Asset misappropriation is the most common fraud
scheme which assets are either directly or indirectly diverted to

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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

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for personal gain by misusing company-funded services
(Lomer, 2017).
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

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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).
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.

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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.
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

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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.
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

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

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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). 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 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

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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) .

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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

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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) .
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

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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).
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

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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

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

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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 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

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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.
Synthesis
Companies must have sufficient knowledge of the risks
they are facing according to (Mutetwa, 2015). 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.And from (Brokerage, 2013), successful risk
management affords a small business an opportunity to thrive,
grow and ultimately enjoy the fruits of success.
There are various types of risks that a business will
experience but this study focused on specific types such as:

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Operational risk according to (Spacey, 2015), 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 .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).
Compliance risk, and Reputational risk according to
(Spacey, 2015), 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.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;

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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).
. 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 misappropriationand base
from (Hall, 2011), it is related the most common fraud scheme
which assets are either directly or indirectly diverted to the
fraudster’s benefit. The provided schemes include check
tampering and forgery, inventory theft, cash theft, service theft,

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expense account fraud, procurement fraud, worker’s
compensation fraud, and commission fraud (Lomer, 2017).
According to (Bragg, 2018), 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.Thus, schemes include
timesheet fraud and pay check theft (Lomer, 2017). accounting
fraud, and 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
ownexamples of vendor fraud are billing schemes, bribery and
kickbacks (Lomer, 2017).
According to (Crain, 2018), 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. And the detective controls form the second line of

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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) .Preventing errors and fraud is far more
cost-effective than detecting and correcting problems after they
occur.
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

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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
Piñas, 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 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.

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Chapter 2
METHODOLOGY
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.
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

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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 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).
Population and Sampling
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.

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Figure 2
Number of Coffee Shops in Las Piñas City
Respondents of the Study
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.

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Figure 3
Percentage of the Respondents of the Study
POSITION NUMBER PERCENTAGE

Manager 13 13.95 %
Supervisor 6 14.28%
Accounting staff 6 14.28%
Cashier 17 40.47%
The sample size refers to the group of individuals or
entities from which the sample might be drawn. For the purpose
of this study, the chosen respondents from each coffee shop
would be the managers, supervisors, accounting staff, and
cashiers. We, the researchers, chose these particular
personnel for the following reasons. Since managers are
responsible for maximizing revenue and profit opportunities for
the business. A supervisors 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

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operations live up to the standards of customer satisfaction; and
for budgeting and efficient resource utilization. Since an
accounting staff are primarily in charge of managing the payroll
and other necessary payments of the business. And the
cashiers are assigned to take customers’ payments and
balancing of books at the end of the business day.
Research Instrument
For the purpose of this study, the non-probability
sampling type was adopted, specifically random 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).

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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.
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.
For the purpose of this study, a questionnaire was utilized
because it provides a relatively cheap, quick and efficient way

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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 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).
Validation / Reliability of Instrument
The draft and content of the survey questionnaire was
validated by the research adviser, three (3) faculty professors

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of the researchers and the college dean of the Bachelor of
Science in Business Administration and Accountancy. During
the validation process of this study, copies of the statement of
the problem and questionnaire were given to validators to
measure the reliability of each item in the questionnaire and
identify which questions to retain, delete and modify.
Data Gathering Procedure
Data collection is a way to describe a process of
preparing and collection data 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).
The following steps are how the researchers gathering
the necessary data:
1.) Adopt the questionnaire
2.) Distribution of the questionnaire

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3.) Collection of data
4.) Data analysis
Statistical Treatment
The Statistical Package for Social Sciences (SPSS) was
used by the researcher to get the frequency and mean of the
gathered data and was presented in a tabular form. The
researchers also utilized the Pearson correlation to show if
there was a significant relationship between the levels of
customer satisfaction and repurchase intention of selected
mobile network providers in Las Piñas City.
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

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amount of time. It also comes up in a statistical area dealing
with the effects of time called time series 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)

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Chapter 3
PRESENTATION, ANALYSIS, AND INTERPRETATION OF
DATA
This chapter includes the analysis and interpretation based
on the data gathered from the respondents. The specific
problems raised in this study were answered sequentially based
on the question in the statement of the problem, of which the data
are presented in tabular forms with their corresponding textual
presentation and interpretation. The following are the results and
discussion of the study.
Problem 1: What is the demographic profile of the
coffee shops in terms of years of existence, annual net
income, and number of employees?

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Table 1.1
Years of Existence
Years of Existence Frequency Percent Rank

1-5 years 17 81% 1
6-10 years 2 9.5% 2
More than 10 years 2 9.5% 2
TOTAL 21 100%
Based on the table above, seventeen (17) or eigthy-one
percent (81%) out of twenty-one (21) or one-hundred percent
(100%) 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

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explains why a lot of entrepreneurs have decided to start
opening 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
Annual Net Income Frequency Percent Rank

Less than P100,000 13 61.9% 1
P100,000 - P300,000 3 14.3% 3
More than P300,000 5 23.8% 2
TOTAL 21 100%
Based on the table above,Thirteen(13) or 61.9% out of
twenty-one (21) or one-hundred percent (100%) 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.

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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 are a very small business and cannot afford to
have many employees (Williams, 2015)
Table 1.3
Number of Employees
Number of Employees Frequency Percent Rank

2-3 7 33.3% 1
3-5 6 28.6% 2
5 -10 4 19% 3
More than 10 4 19% 3
TOTAL 21 100%
Based on the table above, seven (7) or thirty-three
percent (33%) out of twenty-one (21) or one-hundred percent

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(100%) 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 ability to grow and
offer the same quality of products and services to their
consumers as large businesses. (LaMarco, 2018)
Problem 2: What are the types of fraud the business
may have experienced in terms of asset misappropriation,
vendor fraud, accounting fraud, and payroll fraud?

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Table 2.1
Asset Misappropriation
Asset Misappropriation Frequency Percent Rank

Cash Theft 16 76.2% 1
Worker’s Compensation Fraud 2 9.5% 2
Inventory Theft 2 9.5% 2
Check Tampering and Forgery 1 4.8% 3
TOTAL 21 100%
Based on the table, these are the types of fraud under
asset misappropriation, ranked according to what most of the
coffee shops are aware of or have policies against.They
probably have experience these in the past which made them
implement policies against those types of fraud.
Sixteen (16) or seventy-six and two percent (76.2%) out of
twenty-one (21) or one-hundred percent (100%) the
respondents have selected cash theft as the common type of
fraud they have experienced in terms of asset misappropriation.

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This could mean that the 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
Vendor Fraud Frequency Percent Rank

Billing Schemes 18 85.7% 1
Bribery and Kickbacks 2 9.5% 2
Others 1 4.8% 3
TOTAL 21 100%
Based on the table above these are the types of fraud
under vendor fraud, eighteen (18) or eighty-five and seven
percent (85.7%) out of twenty-one (21) or one-hundred percent
(100%) that most of the coffee shops are aware of or have
policies against. This could be because there have been cases

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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)
Table 2.3
Accounting Fraud
Accounting Fraud Frequency Percent Rank

Fake Supplier Fraud 9 42.9% 1
Accounts Payable Fraud 4 19% 2
Embezzlement 4 19% 2
Accounts Receivable
3 14.3% 3
Fraud
Personal Purchases 1 4.8% 4
TOTAL 21 100%
under accounting fraud, nine (9) or forty-two and nine percent
(42.9%) out of twenty-one (21) or one-hundred percent (100%)

Las Piñas Campus i
of the coffee shops are aware of or have policies against.
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
Payroll Fraud Frequency Percent Rank

Timesheet Fraud 11 52.4% 1
Cash Advance Fraud 10 47.6% 2
TOTAL 21 100%
under payroll fraud, eleven (11) or fifty-two and four percent
(52.4%) out of twenty-one (21) or one-hundred percent (100%)
the coffee shops are aware of or have policies against. Just like
accounting fraud, if there is lack of supervision and segregation

Las Piñas Campus i
of duties, it is easy to manipulate records such as payroll.
(Lomer, 2017)
Problem 3: What is the extent of the practices of risk
management for fraud detection that is being implemented
by the coffee shops based on surveillance, monitoring, IT
control, physical control, accounting records, and risk
assessment?

Las Piñas Campus i
Table 3
Descriptives for Fraud Detection Practices
Standard Verbal
Fraud Detection Practice Mean
Deviation Interpretation
CS1:
Highly
Positioning CCTVs within the 3.71 0.900
practiced
premises
CS2:
Viewing or utilizing the use of Highly
3.62 0.810
the CCTV footage on a practiced
scheduled basis
CS3:
Allowing authorized people Moderately
3.48 1.120
to handle and check the practiced
monitoring of the CCTVs
CM1:
Verifying the authenticity of
Highly
the supplier by checking the 3.81 0.402
practiced
important details before
making a purchase
CM2:
Counterchecking if the
inventory received reflects Highly
3.9 0.301
what is stated in the source practiced
documents (receipts, order
forms, etc.)
Highly
CM3: 3.57 0.870
practiced

Las Piñas Campus i
Conducting unannounced
visits by the management to
check if the standards of
business operations are
being met
CIC1:
Restricting access to
company proprietary
Moderately
information to only those 3.48 0.928
practiced
who have authorized access
and need it in the course of
their job
CIC2:
Securing passwords for
Highly
databases or any important 3.71 0.784
practiced
files or documents saved in
computers
CIC3:
Setting up controls in the
computer system that will
Moderately
alert management if there 3.19 1.123
practiced
are unauthorized attempts of
accessing important
documents
CIC4:
Having a software that alerts
Moderately
management of suspicious 2.57 1.128
practiced
activity on a company
network
CPC1:
Highly
Practicing regular inventory 3.67 0.730
practiced
checks

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CPC2:
Consistently
counterchecking for the Highly
3.62 0.740
invoice of the inventory practiced
bought if it matches the
actual inventory count
CPC3:
Disposing of confidential
information properly, by
shredding documents and Moderately
3.1 1.136
completely removing printed practiced
data from electronic devices
before redeploying or
exposing of them
CPC4:
Keeping the cash and
checks in a locked cabinet or Highly
3.76 0.700
safe that can only be practiced
accessed by authorized or
assigned personnel
CAR1:
Assigning a trusted outside
Moderately
contractor to review and 3.33 1.017
practiced
reconcile accounts at regular
intervals
CAR2:
Updating and reviewing the
Highly
financial records (source 3.76 0.539
practiced
documents, journals,
ledgers) on a regular basis
CAR3:
Moderately
Having automated means of 3.24 1.136
practiced
checking the attendance and

Las Piñas Campus i
number of hours worked by

an employee
CAR4:
Reconciling the balance Highly
3.62 0.805
sheets and payroll accounts practiced
for each quarter
CRA1:
Conducting meetings to
discuss about adhering to Moderately
3.43 0.978
the policies against possible practiced
threats or risks to the
company
CRA2:
discuss the consistent Moderately
3.29 1.102
checking of vulnerabilities, practiced
blind spots, or areas of
improvement in the company
CRA3:
Highly
discuss the effectivity of 3.52 0.814
practiced
existing practices in the
business operations
* 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)
The average results of the answers from the respondents
is that they always have CCTVs positioned within the premises.

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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.
CS2:
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

Las Piñas Campus i
against company policy knowing that there is a possibility that
the management might see it happening.
CS3:
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.
CM1:
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

Las Piñas Campus i
details to check for their authenticity before committing to place
an order.
CM2:
is that they always counter check if the inventory received
reflects what it states in the source documents. Based on the
gathered data, the companies regularly double-check the
number of items received from the supplier to make sure that it
is equivalent to the number of items ordered which was stated
in the source documents. This helps identify if the supplier either
committed fraud or error in terms of their services, or one of the
employees made an incorrect count of the physical inventory or
if inventory theft has taken place.
CM3:

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is that they always conduct unannounced visits by the
management to check if the standards of business operations
are being met. Based on the gathered data, the coffee shops
want to see how the business operates during normal working
hours to catch them off guard and check what they normally do
during business hours without supervision, because some
employees have the tendency of slacking off during the job or
doing things that are not related to their work.
CIC1:
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. Based on the gathered data, the
selected companies strictly limit the people who handle
confidential information found in their databases or computers,

Las Piñas Campus i
so that no one could easily change the data that has been
encoded such as the revenue for the day, current inventory
count, etc.
CIC2:
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.
CIC3:
is that they often set up controls in the computer system that will
alert management if there are unauthorized attempts of

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accessing important documents. 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.
CIC4:
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.
CPC1:

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is that they always practice regular inventory checks. Based on
the gathered data, the companies do give importance in
checking their inventory to make sure that there is no occurrence
of theft or human error in the physical count.
CPC2:
is that they always consistently countercheck for the invoice of
the inventory bought if it matches the actual inventory count.
Based on the gathered data, the selected coffee shops regularly
recounts and monitors to see if the number of items received
from the supplier is equivalent to the number of items ordered
which was stated in the receipt, orders, etc. This helps identify if
the supplier either committed fraud or error in terms of their
services, or one of the employees made an incorrect count of
the physical inventory or inventory theft has taken place.

Las Piñas Campus i
CPC3:
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 consuming and sometimes
costly to buy a shredder since majority of the coffee shops have
just started their business.
CPC4:
is that they always keep the cash and checks in a locked cabinet
or safe that can only be accessed by authorized or assigned
personnel. Based on the gathered data, the companies

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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.
CAR1:
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.
CAR2:

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is that they always update and review the financial records on
a regular basis.
Based on the gathered data, the coffee shops regularly
update their financial records to make sure that it is up-to-date
and accurate, decreasing the possibility of backlogs or having to
search for details when it needed.
CAR3:
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

Las Piñas Campus i
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.
CAR4:
is that they always reconcile the balance sheets and payroll
accounts for each quarter. Based on the gathered data, the
companies regularly ensure their balance sheets and payroll
accounts are updated so that they can have a quick view of their
business’ financial standing, without this business owners and
accountants might not be able to draw accurate or effective
plans for the company.
CRA1:
is that they often conduct meetings to discuss adhering to the
policies against possible threats or risks to the company. Based

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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.
CRA2:
is that they often conduct meeting to discuss consistent
checking of vulnerabilities, blind spots, or areas of improvement
in the company. Based on the gathered data, the companies’
management don’t regularly check or assess their weakness,
areas they need to improve, etc to ensure that they anticipate
and are prepared for certain scenarios that could take place.
CRA3:
is that they always conduct meetings to discuss the effectivity of
existing practices in the business operations. Based on the

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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.
Problem 4: What is the frequency of the following risk
management for fraud prevention that is being practiced in
terms of segregation of duties, supervision, and
independent verification?
Table 4

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Descriptives for Fraud Prevention Practices
Standard Verbal
Fraud Prevention Practices Mean
Deviation Interpretation
Assigning and distributing the
responsibilities of the staff to
Moderately
avoid unauthorized access to 3.19 1.123
practiced
certain resources, sensitive
information, etc.
Conducting thorough
Highly
background checks on new 3.81 0.512
practiced
employees
Ensuring that all the employees
are oriented and briefed on the Highly
3.9 0.301
company policies, rules and practiced
regulations
Rewarding employees for Moderately
3.33 0.913
ethical behavior practiced
Disciplining the employees who
Highly
breach the company’s code of 3.62 0.669
practiced
ethics
Implementing an ‘open-door
policy’ for the staff to allow them
Highly
to share their opinions or 3.52 0.928
practiced
concerns with regards to
business operations
Requiring staff to immediately
report their injuries or accidents
and requiring medical Highly
3.67 0.796
certificates or proof of practiced
hospitalization or medical
treatment

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Cross-checking copies of
source documents to see if it Highly
3.62 0.805
agrees with other proof practiced
documents
Verifying signatures before
Highly
releasing or distributing a said 3.71 0.561
practiced
document
Requesting for authorized
signatures from managers or Moderately
3.48 1.03
supervisors before approving practiced
timesheets and overtime claims
* 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)
DSD:
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

Las Piñas Campus i
at least 2-3 employees it is hard to distribute tasks to others to
ensure that segregation of duties are met.
DS1:
is that they always conduct thorough background checks on new
employees. Based on the gathered data, the companies’
management regularly assesses and checks every individual
that they hire to know if they have had any issues in the past that
could affect their performance in the coffee shops, and how they
were with their previous employer.
DS2:
is that they always ensure that all the employees are oriented
and briefed on the company policies, rules and regulations.
Based on the gathered data, the companies’ management
regularly ensures that their employees are made aware of the

Las Piñas Campus i
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.
DS3:
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.
DS4:
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

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ensure that the employees don’t take company regulations
lightly.
DS5:
is that they always implement an 'open-door policy' for the staff
to allow them to share their opinions or concerns with regards to
business operations. Based on the gathered data, the selected
coffee shops’ management encourages the staff to share their
opinions and comments to their superiors or to the management,
which makes the staff feel like their inputs are valued.
DS6:
is that they always require that injuries or accidents of staff be
reported to them immediately. And require medical certificates
or proof of hospitalization or medical treatment. Based on the

Las Piñas Campus i
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.
DIV1:
is that they always cross-check copies of source documents to
see if it agrees with other proof documents. Based on the
gathered data, the company verifies the authenticity and
accuracy of the source documents and financial records, it
doesn’t just pass through or authorized by just the same
personnel.
DIV2:

Las Piñas Campus i
is that they always verify signatures before releasing or
distributing a said document. Based on the gathered data, the
selected coffee shops double-checks the signatures of important
documents to ensure that there is no attempts of forgery.
DIV3:
is that they often request for authorized signatures from
managers or supervisors before approving timesheets and
overtime claims. Based on the gathered data, the companies’
management usually makes a point to have their superiors such
as managers or supervisors to ensure the authenticity and
accuracy of the number of hours the employees worked, their
attendance, and if they indeed worked overtime. This reduces
the chances of employees to alter their timesheets or make false
claims for overtime pay.

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Problem 5: Is there a significant difference in the
detection when grouped according to the profile?
Table 5.1

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Differences in the extent of practice for surveillance with

Sig. Decision
Y Variable F Value Interpretation
Value on H01
E
A
R
S Accept
CS 1 .229 .798 Not Significant
H01
O
F
E Accept
X CS 2 .239 .790 Not Significant
H01
I
S
T
E
N Accept
C CS 3 .511 .608 Not Significant
H01
E
Surveillance

Las Piñas Campus i
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 advanced. Surveillance aims to increase
productivity and monitor the employees during working hours,

Las Piñas Campus i
so this does not in any way relate to the existence of the
business. (Solon, 2017)
Table 5.2
Differences in the extent of practice for monitoring with
Y Sig. Decision on
Variable F Value Interpretation
E Value H01
A
R
S CM 1 .810 .460 Accept H01 Not Significant
O
F
E
X CM 2 .229 .798 Accept H01 Not Significant
I
S
T
E
N
C CM 3 .574 .573 Accept H01 Not Significant
E

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Monitoring
monitoring, when grouped according to years of existence using
One-way ANOVA. The results shows that the fraud detection
practices of monitoring obtained f-values greater than the 0.05
level of significance set by the study, thus the null hypothesis is
accepted. This means that there is no significant difference
between the practice of monitoring and the years of existence of
the business.
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

Las Piñas Campus i
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 5.3
Differences in the extent of practice for IT control with
Y Sig. Decision on
E Value H01
A
R
S Not
CIC 1 1.787 .196 Accept H01
Significant
O
F
E Not
CIC 2 .306 .740 Accept H01
X Significant
I
S
T
Not
E CIC 3 .441 .650 Accept H01
Significant
N
C
E Not
CIC 4 .587 .566 Accept H01
Significant

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IT Control
risk management practices on fraud detection, specifically IT
control, when grouped according to years of existence using
practices of IT control obtained f-values greater than the 0.05
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

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methods, it does not need to take into consideration how many
years a company has existed. (Gatto, 2016)
Table 5.4
Differences in the extent of practice for physical control
with regard to years of existence
Sig. Decision on
Y Variable F Value Interpretation
Value H01
E
A
R CPC 1 .488 .622 Accept H01 Not Significant
S
O
CPC 2 .631 .544 Accept H01 Not Significant
F
E
X CPC 3 .909 .421 Accept H01 Not Significant
I
S
T
E
N CPC 4 .265 .770 Accept H01 Not Significant
C
E

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Physical Control
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
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

Las Piñas Campus i
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)
Table 5.5
Differences in the extent of practice for accounting records
Y Sig. Decision on
E Value H01
A
R Not
S CAR 1 1.070 .364 Accept H01
Significant
O
F Not
CAR 2 .456 .641 Accept H01
Significant
E
X
I Not
CAR 3 .573 .574 Accept H01
S Significant
T
E
N Not
C CAR 4 .239 .790 Accept H01
Significant
E

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Accounting Records
accounting records, when grouped according to years of
existence using One-way ANOVA. The results shows that the
fraud detection practice of accounting records obtained f-values
greater than the 0.05 level of significance set by the study, thus
the null hypothesis is accepted. This means that there is no
significant difference between the practice of accounting records
and the years of existence of the business.
Regardless of the number of years the company has been
operating, it does not affect how the company records, updates,
or check their financial records and other source documents.
They still maintain proper accounting procedures and practices

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even if they the company just started or has been ongoing for
quite some time. (Australian Government, 2018)
Table 5.6
Differences in the extent of practice for risk assessment
Y Sig. Decision on
E Value H01
A
R
S Not
CRA 1 1.295 .298 Accept H01
Significant
O
F
E
X Not
CRA 2 .922 .416 Accept H01
I Significant
S
T
E
N Not
C CRA 3 .738 .492 Accept H01
Significant
E

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Risk Assessment
Based on the table above the researchers compared differences
in the evaluation of the respondents on the extent of risk
management practices on fraud detection, specifically risk
assessment, when grouped according to years of existence
detection practices of risk assessment obtained f-values greater
difference between the practice of risk assessment and the
years of existence of the business.
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

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an ongoing process, and it doesn’t take into account how long a
company has existed. (Tan L. H., 2013)
Table 5.7
A Sig. Decision on
N Value H01
N
U
A Not
CS 1 .714 .557 Accept H01
L Significant
N
E Not
T CS 2 1.494 .252 Accept H01
Significant
I
N
C
O Not
CS 3 .845 .488 Accept H01
M Significant
E

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Surveillance
surveillance, when grouped according to annual net income
detection practice of surveillance obtained f-values greater than
the 0.05 level of significance set by the study, thus the null
difference between the practice of surveillance and the annual
net income of the business.
Regardless of how much revenue the company earns, it
does not affect their methods and procedures of surveillance.
Over the course of a couple of years, surveillance methods have
evolved as this generation becomes more technologically
advanced. Surveillance aims to increase productivity and

Las Piñas Campus i
monitor the employees during working hours, so this does not in
any way relate to how much the business earns. (Solon, 2017)
Table 5.8
Sig. Decision on
A Variable F Value Interpretation
Value H01
N
N
U
A CM 1 .599 .624 Accept H01 Not Significant
L
N
E
T CM 2 1.169 .351 Accept H01 Not Significant
I
N
C
O CM 3 .910 .457 Accept H01 Not Significant
M
E

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Monitoring
monitoring, when grouped according to annual net income using
practice of monitoring obtained f-values greater than the 0.05
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

Las Piñas Campus i
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 carry this out. (Ibraahim, 2014)
Table 5.9
Sig. Decision on
A Variable F Value Interpretation
Value H01
N
N
U Not
CIC 1 .149 .929 Accept H01
A Significant
L
Not
N CIC 2 .655 .590 Accept H01
Significant
E
T
Not
CIC 3 2.641 .083 Accept H01
I Significant
N
C
O Not
CIC 4 2.868 .067 Accept H01
M Significant
E

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IT Control
control, when grouped according to annual net income using
practice of IT control obtained f-values greater than the 0.05
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 implements
them and how the employees comply with the methods, it does

Las Piñas Campus i
not need to take into consideration how much is the company’s
yearly revenue. (Gatto, 2016)
Table 5.10
with regard to annual net income
A F Sig. Decision
Variable Interpretation
N Value Value on H01
N
U Accept
A CPC 1 1.041 .400 Not Significant
H01
L
N Accept
CPC 2 1.686 .208 Not Significant
E H01
T
I
N Accept
CPC 3 .050 .985 Not Significant
C H01
O
M
E Accept
CPC 4 .837 .492 Not Significant
H01

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Physical Control
physical control, when grouped according to annual net income
detection practices of physical control obtained f-values greater
difference between the practice of physical control and the
annual net income of the business.
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

Las Piñas Campus i
maintain the integrity of the work of each and every employee is
doing. It is more of an ethical or habitual factor and does not
matter how much a company earns. (Koranteng, 2011)
Table 5.11
A F Sig. Decision
N Variable Value Value on H01 Interpretation
N
U
A
Accept
L CAR 1 1.411 .274 Not Significant
H01
N
E Accept
T CAR 2 .855 .483 Not Significant
H01
I
N Accept
CAR 3 1.616 .223 Not Significant
C H01
O
M Accept
E CAR 4 1.363 .288 Not Significant
H01

Las Piñas Campus i
Accounting Records
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
significant difference between the practice of accounting records
and the annual net income of the business.
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)

Las Piñas Campus i
Table 5.12
A Sig. Decision
N Variable F Value Interpretation
Value on H01
N
U
A
L CRA 1 .465 .710 Accept H01 Not Significant
N
E
T
CRA 2 1.125 .367 Accept H01 Not Significant
I
N
C
O
M CRA 3 .890 .466 Accept H01 Not Significant
E
Risk Assessment

Las Piñas Campus i
risk management practices on fraud detection, specifically risk
assessment, when grouped according to annual net income
detection practice of risk assessment obtained f-values greater
annual net income of the business.
affect the way they assess and mitigate risks or the methods and
an ongoing process, and it doesn’t take into account how much
a business earns. (Tan L. H., 2013)

Las Piñas Campus i
Table 5.13
F Sig. Decision
U
M
B Accept
E CS 1 .462 .712 Not Significant
H01
R
O
F
E Accept
M CS 2 .594 .628 Not Significant
H01
P
L
O
Y
E
Accept
E CS 3 .336 .800 Not Significant
H01
S

Las Piñas Campus i
Surveillance
surveillance, when grouped according to number of employees
detection practice of surveillance obtained f-values greater than
difference between the practice of surveillance and the number
of employees.
Regardless of the number of employees the coffee shops
have, it does not affect their methods and procedures of
surveillance. Over the course of a couple of years, surveillance
methods have evolved as this generation becomes more
technologically advanced. Surveillance aims to increase

Las Piñas Campus i
productivity and monitor the employees during working hours,
so this does not in any way relate to the number of employees.
(Solon, 2017)
Table 5.14
Sig. Decision
Value on H01
U
M
B
E Accept
R CM 1 2.176 .128 Not Significant
H01
O
F
E
Reject
M CM 2 4.571 .025 Significant
H01
P
L
O
Y
E Accept
E CM 3 .471 .706 Not Significant
H01
S

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Monitoring
monitoring, when grouped according to number of employees
detection practice of monitoring obtained f-values greater than
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 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.

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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.

Las Piñas Campus i
Table 5.15
F Sig. Decision on
N Value Value H01
U
M Not
B CIC 1 .201 .894 Accept H01
Significant
E
R
O Not
CIC 2 .600 .624 Accept H01
F Significant
E
M Not
P CIC 3 .522 .673 Accept H01
Significant
L
O
Y
E Not
E CIC 4 .640 .599 Accept H01
Significant
S

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IT Controls
control, when grouped according to number of employees using
practice of IT controls obtained f-values greater than the 0.05
between the practice of IT control and the number of employees.
Regardless of the number of employees hired by the
business, it does not affect the way they handle and secure their
digital data found in computers or databases. IT organization
and management controls is dependent on how the
management implements them and how the employees comply
with the methods, it does not need to take into consideration how

Las Piñas Campus i
many number of employees there are. (Gatto, 2016)
Table 5.16

with regard to number of employees
Sig. Decision on
N Value H01
U
M
B CPC 1 .093 .963 Accept H01 Not Significant
E
R
O
F CPC 2 .248 .862 Accept H01 Not Significant
E
M
P
L CPC 3 .579 .637 Accept H01 Not Significant
O
Y
E
E CPC 4 .224 .878 Accept H01 Not Significant
S

Las Piñas Campus i
Physical Controls
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
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 handle these the
same way they were trained or instructed, regardless of how
many they are they go through the same training and orientation.

Las Piñas Campus i
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)

Las Piñas Campus i
Table 5.17
Sig. Decision
N Value on H01
U
M
B CAR 1 .423 .739 Accept H01 Not Significant
E
R
O
CAR 2 5.161 .017 Reject H01 Significant
F
E
M
P
L CAR 3 .981 .425 Accept H01 Not Significant
O
Y
E
E CAR 4 .959 .434 Accept H01 Not Significant
S

Las Piñas Campus i
Accounting Records
accounting records, when grouped according to number of
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.

Las Piñas Campus i
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 i
Table 5.18
N Sig. Decision
U Variable F Value Interpretation
Value on H01
M
B
E
R
Accept
CRA 1 .454 .718 Not Significant
H01
O
F
E
M Accept
CRA 2 .759 .532 Not Significant
P H01
L
O
Y
E
Accept
E CRA 3 .265 .850 Not Significant
H01
S

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Risk Assessment
Based on the table above the researchers compared
risk management practices on fraud detection, specifically risk
assessment, when grouped according to number of employees
detection practices of risk assessment obtained f-values greater
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

Las Piñas Campus i
an ongoing process, and it doesn’t take into account how many
staff are employed. (Tan L. H., 2013)
Problem 6: Is there a significant difference in the
prevention when grouped according to profile?

Las Piñas Campus i
Table 6.1
Differences in the extent of practice for segregation of
duties with regard to years of existence
Sig. Decision
Y Value on H02
E
A
R
S
O
F
E
X DSD .441 .650 Accept H02 Not Significant
I
S
T
E
N
C
E
Segregation of Duties

Las Piñas Campus i
risk management practices on fraud prevention, specifically
segregation of duties, when grouped according to years of
fraud prevention practice of surveillance obtained f-values
significant difference between the practice of segregation of
duties and the years of existence of the business.
Regardless of the amount of revenue earned by the
company within a year, it 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

Las Piñas Campus i
matter how long a business has been operating as long as the
management distributes opportunities evenly.
Table 6.2
Differences in the extent of practice for supervision of
duties with regard to years of existence
Sig. Decision on
Y Variable F Value Value H02
Interpretation
E
A Not
DS1 .484 .624 Accept H02
R Significant
S Not
DS2 .229 .798 Accept H02
Significant
O
F Not
DS3 1.429 .265 Accept H02
Significant
E Not
DS4 1.222 .318 Accept H02
X Significant
I
S Not
DS5 1.613 .227 Accept H02
T Significant
E
N
C Not
DS6 .408 .671 Accept H02
E Significant

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Supervision
supervision, when grouped according to years of existence
prevention practice of supervision obtained f-values greater than
difference between the practice of supervision and the years of
existence of the business.
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

Las Piñas Campus i
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)
Table 6.3
Differences in the extent of practice for independent
verification with regard to years of existence
Y
E Sig. Decision
A Value on H02
R
S
O
F DIV1 .527 .599 Accept H02 Not Significant
E
X
I
S DIV2 .383 .688 Accept H02 Not Significant
T
E
N
C
E
DIV3 .614 .552 Accept H02 Not Significant

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Independent Verification
independent verification, when grouped according to years of
fraud prevention practice of independent verification obtained f-
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.
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

Las Piñas Campus i
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)
Table 6.4
duties with regard to annual net income
A Sig. Decision
N Value on H02
N
U
A
L
N
E
T Not
DSD .780 .521 Accept H02
Significant
I
N
C
O
M
E

Las Piñas Campus i
segregation of duties, when grouped according to annual net
fraud prevention practice of segregation of duties obtained f-
segregation of duties and the annual net income of the business.
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

Las Piñas Campus i
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)

Las Piñas Campus i
Table 6.5
Differences in the extent of practice for supervision with
A F Sig. Decision
N
U
Accept
A DS1 .300 .825 Not Significant
H02
L
Accept
N DS2 .783 .519 Not Significant
H02
E
Accept
T DS3 .584 .633 Not Significant
H02
I Accept
DS4 .757 .534 Not Significant
N H02
C Accept
O H02
M
Accept
E DS6 .366 .778 Not Significant
H02

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Supervision
supervision, when grouped according to annual net income
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

Las Piñas Campus i
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, it depends on
the management. (Siayor, 2010)
Table 6.6
verification with regard to annual net income
Sig. Decision
A Value on H02
N
N
U Not
DIV1 .502 .686 Accept H02
A Significant
L
N
E Not
T DIV2 .886 .468 Accept H02
Significant
I
N
C
O Not
M DIV3 1.058 .393 Accept H02
Significant
E

Las Piñas Campus i
independent verification, when grouped according to annual net
independent verification and the annual net income.
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

Las Piñas Campus i
carrying out this task and not how much a company earns
annually. (Kuman, 2016)
Table 6.7
duties with regard to number of employees
Sig. Decision
N Value on H02
U
M
B
E
R
O
F
E Accept
DSD 1.238 .327 Not Significant
M H02
P
L
O
Y
E
E
S

Las Piñas Campus i
segregation of duties, when grouped according to number of
employees using One-way ANOVA. The results show that the
fraud prevention practice of segregation of duties obtained f-
segregation of duties and the number of employees.
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

Las Piñas Campus i
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)

Las Piñas Campus i
Table 6.8
Differences in the extent of practice for supervision with
Sig. Decision
Value on H02
U
M
Accept
B DS1 .256 .856 Not Significant
H02
E
R
Accept
H02
O
F
Accept
H02
E
M
P Accept
L H02
O
Y Accept
DS5 1.183 .346 Not Significant
E H02
E
S Accept
H02

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Supervision
supervision, when grouped according to number of employees
difference between the practice of supervision and the number
of the employees.
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

Las Piñas Campus i
personnel are responsible for reporting problems, such as policy
violations or illegal actions. It has nothing to do with the number
of employees because it depends on the management. (Siayor,
2010)

Las Piñas Campus i
Table 6.9
verification with regard to number of employees
N Sig. Decision on
U Value H02
M
B
E Not
DIV1 2.642 .083 Accept H02
R Significant
O
F Not
DIV2 1.057 .393 Accept H02
Significant
E
M
P
L
O
Y DIV3 3.925 .027 Reject H02 Significant
E
E
S

Las Piñas Campus i
independent verification, when grouped according to number of
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 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)

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CHAPTER 4
SUMMARY, CONCLUSIONS & RECOMMENDATIONS
Summary of Findings
1. Demographic Profile
1.1 Years of Existence
1.1.1 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 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 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

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1.2.1 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.
income between P100,000 and P300,000 with a
percentage of 14.3 out of the total respondents.
income less than P100,000 with a percentage of
61.9 out of the total respondents.
1.3 Number of Employees
1.3.1 out of 21 of the coffee shops have more than 10
employees with a percentage of 19 out of the total
respondents.

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1.3.2 out of 21 of the coffee shops have at least 5 to 10
employees with a percentage of 19 out of the total
respondents.
employees with a percentage of 28.6 out of the
total respondents.
employees with a percentage of 33.3 out of the
total respondents.
2. Type of Fraud
2.1 Asset Misappropriation
2.1.1 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.

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2.1.2 out of 21 of the coffee shops are aware and
have policies implemented for cash theft with a
percentage of 76.2 out of the total respondents.
have policies implemented for inventory theft
with a percentage of 9.5 out of the total
respondents.
have policies implemented for check tampering
and forgery with a percentage of 4.8 out of the
total respondents.
2.2 Vendor Fraud
have policies implemented for receiving

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counterfeit money sales with a percentage of
4.8 out of the total respondents.
have policies implemented for bribery and
kickbacks with a percentage of 9.5 out of the
total respondents.
have policies implemented for billing schemes
respondents.
2.3 Accounting Fraud
have policies implemented for personal
purchases with a percentage of 4.8 out of the
total respondents.

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have policies implemented for fake supplier
respondents.
have policies implemented for accounts
receivable fraud with a percentage of 14 out of
the total respondents.
have policies implemented for accounts
payable fraud with a percentage of 19 out of the
total respondents.
have policies implemented for embezzlement
with a percentage of 19 out of the total
respondents.

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2.4 Payroll Fraud
have policies implemented for timesheet fraud
respondents.
have policies implemented for cash advance
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.

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3.1.2 “Viewing or utilizing the use of the CCTV
footage on a scheduled basis” obtained a mean
of 3.62 which is interpreted as Highly Practiced.
3.1.3 “Allowing authorized people to handle and
check the monitoring of the CCTVs” obtained a
mean of 3.48 which is interpreted as Moderately
Practiced.
3.2 Monitoring
3.2.1 “Verifying the authenticity of the supplier by
checking the important details before making a
purchase” obtained a mean of 3.81 which is
interpreted as Highly Practiced.
3.2.2 “Counterchecking if the inventory received
reflects what is stated in the source documents

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(receipts, order forms, etc.)” obtained a mean of
3.9 which is interpreted as Highly Practiced.
3.2.3 Conducting unannounced visits by the
management to check if the standards of
business operations are being met obtained a
mean of 3.57 which is interpreted as Highly
Practiced.
3.3 IT Controls
3.3.1 Restricting access to company proprietary
information to only those who have authorized
access and need it in the course of their job
ModeratelyPracticed.
3.3.2 Securing passwords for databases or any
important files or documents saved in

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computers obtained a mean of 3.71 which is
3.3.3 Setting up controls in the computer system that
will alert management if there are unauthorized
attempts of accessing important documents
Moderately Practiced.
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 obtained a
Practiced.

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3.4.2 Consistently counter checking for the invoice of
the inventory bought if it matches the actual
inventory count obtained a mean of 3.62 which
is interpreted as Highly Practiced.
3.4.3 Disposing of confidential information properly,
by shredding documents and completely
removing printed data from electronic devices
before redeploying or exposing of them
3.4.4 Keeping the cash and checks in a locked
cabinet or safe that can only be accessed by
authorized or assigned personnel obtained a
Practiced.
3.5 Accounting Records

Las Piñas Campus i
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 obtained a mean of 3.76 which is
3.5.3 Having automated means of checking the
attendance and number of hours worked by an
employee obtained a mean of 3.24 which is
interpreted as Moderately Practiced.
3.5.4 Reconciling the balance sheets and payroll
accounts for each quarter obtained a mean of

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3.6 Risk Assessment
3.6.1 Conducting meetings to discuss about adhering
to the policies against possible threats or risks
to the company obtained a mean of 3.43 which
is interpreted as Moderately Practiced.
3.6.2 Conducting meetings to discuss the consistent
checking of vulnerabilities, blind spots, or areas
of improvement in the company obtained a
Practiced.
3.6.3 Conducting meetings to discuss the effectivity
of existing practices in the business operations
Highly Practiced.

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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. obtained a
Practiced.
4.2 Supervision
4.2.1 Conducting thorough background checks on
new employees obtained a mean of 3.81 which
is interpreted as Highly Practiced.
4.2.2 Ensuring that all the employees are oriented
and briefed on the company policies, rules and
regulations obtained a mean of 3.9 which is

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4.2.3 Rewarding employees for ethical behavior
4.2.4 Disciplining the employees who breach the
company’s code of ethics obtained a mean of
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
Highly Practiced.
4.2.6 Requiring staff to immediately report their
injuries or accidents and requiring medical
certificates or proof of hospitalization or medical
treatment obtained a mean of 3.67 which is

Las Piñas Campus i
4.3 Independent Verification
4.3.1 Cross-checking copies of source documents to
see if it agrees with other proof documents
Highly Practiced.
4.3.2 Verifying signatures before releasing or
distributing a said document obtained a mean of
4.3.3 Requesting for authorized signatures from
managers or supervisors before approving
timesheets and overtime claims obtained a
mean of 3.648 which is interpreted as

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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:
a. In terms of asset misappropriation, majority of the
coffee shops are aware and have policies or practices
against cash theft.

Las Piñas Campus i
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
against fake supplier fraud.
d. In terms of payroll fraud, majority of the coffee
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.

Las Piñas Campus i
d. With regard to physical control, it is highly
practiced.
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.

Las Piñas Campus i
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.
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.

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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.
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

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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
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Las Piñas Campus i
APPENDICES

Las Piñas Campus i
“APPENDIX A”
LETTER OF ACCEPTANCE FOR ADVISER

Las Piñas Campus i
“APPENDIX B”
LETTER FOR SURVEY TOOL OF EVALUATOR

Las Piñas Campus i

Las Piñas Campus i

Las Piñas Campus i
“APPENDIX C”
SURVEY INSTRUMENT

Las Piñas Campus i

Las Piñas Campus i

Las Piñas Campus i
“APPENDIX D”
LETTER TO RESPONDENTS

Las Piñas Campus i
“APPENDIX E”
RELEVANT RAW STATISTIC RESULTS
ANOVA by A2
Sum of Squares df Mean Square F Sig.
CS1 Between Groups .403 2 .202 .229 .798
Within Groups 15.882 18 .882
Total 16.286 20
Total 12.952 20
CS3 Between Groups 1.356 2 .678 .511 .608
Within Groups 23.882 18 1.327
Total 25.238 20
CM1 Between Groups .268 2 .134 .810 .460
Total 3.238 20
Total 1.810 20
Total 15.143 20
CIC1 Between Groups 2.856 2 1.428 1.787 .196

Las Piñas Campus i
Total 17.238 20
CIC2 Between Groups .403 2 .202 .306 .740
Total 12.286 20
CIC3 Between Groups 1.179 2 .590 .441 .650
Total 25.238 20
Total 31.143 20
CPC1 Between Groups .549 2 .275 .488 .622
Total 10.667 20
Total 10.952 20
CPC3 Between Groups 2.368 2 1.184 .909 .421
Total 25.810 20
Total 9.810 20
CAR1 Between Groups 2.196 2 1.098 1.070 .364
Total 20.667 20
CAR2 Between Groups .280 2 .140 .456 .641

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Total 5.810 20
CAR3 Between Groups 1.545 2 .772 .573 .574
Total 25.810 20
Total 12.952 20
CRA1 Between Groups 2.408 2 1.204 1.295 .298
Total 19.143 20
CRA2 Between Groups 2.256 2 1.128 .922 .416
Total 24.286 20
CRA3 Between Groups 1.003 2 .501 .738 .492
Total 13.238 20

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Variable F Value Sig. Value Decision on Ho Interpretation

CS 1 .229 .798 Accept Ho Not Significant
CM 1 .810 .460 Accept Ho Not Significant
CIC 1 1.787 .196 Accept Ho Not Significant
CIC 2 .306 .740 Accept Ho Not Significant
CPC 1 .488 .622 Accept Ho Not Significant
CAR 1 1.070 .364 Accept Ho Not Significant
CAR 2 .456 .641 Accept Ho Not Significant
CRA 1 1.295 .298 Accept Ho Not Significant
CRA 2 .922 .416 Accept Ho Not Significant

Las Piñas Campus i
ANOVA by A2
Total 1.810 20
Total 5.810 20
POSTHOC


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ANOVA by A3
Total 16.286 20
Total 12.952 20
Total 25.238 20
CM1 Between Groups .898 3 .299 2.176 .128
Total 3.238 20
Total 1.810 20
CM3 Between Groups 1.162 3 .387 .471 .706
Total 15.143 20
Total 17.238 20
Total 12.286 20

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Total 25.238 20
CIC4 Between Groups 3.162 3 1.054 .640 .599
Total 31.143 20
Total 10.667 20
Total 10.952 20
CPC3 Between Groups 2.393 3 .798 .579 .637
Total 25.810 20
Total 9.810 20
Total 20.667 20
CAR2 Between Groups 2.117 3 .706 3.249 .048
Total 5.810 20
CAR3 Between Groups 3.810 3 1.270 .981 .425
Total 25.810 20

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Total 12.952 20
Total 19.143 20
Total 24.286 20
CRA3 Between Groups .591 3 .197 .265 .850
Total 13.238 20
F Decision
Variable Sig. Value Interpretation
Value on Ho
CM 1 2.176 .128 Accept Ho Not Significant
CM 2 4.587 .016 Reject Ho Significant

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CAR 2 3.249 .048 Reject Ho Significant
ANOVA by A3

Total 16.286 20
Total 12.952 20
Total 25.238 20
Total 3.238 20
Total 1.810 20

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Total 15.143 20
Total 17.238 20
Total 12.286 20
Total 25.238 20
Total 31.143 20
Total 10.667 20
Total 10.952 20
CPC3 Between Groups 1.143 2 .571 .417 .665
Total 25.810 20
Total 9.810 20

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Total 20.667 20
Total 5.810 20
Total 25.810 20
CAR4 Between Groups 1.875 2 .938 1.524 .245
Total 12.952 20
Total 19.143 20
CRA2 Between Groups 2.819 2 1.410 1.182 .329
Total 24.286 20
CRA3 Between Groups .541 2 .270 .383 .687
Total 13.238 20
Sig. Decision on
Value Ho

Las Piñas Campus i
CM 1 3.195 .065 Accept Ho Not Significant

CM 2 4.571 .025 Reject Ho Significant
CAR 2 5.161 .017 Reject Ho Significant
CRA 2 1.182 .329 Accept Ho Not Significant
ANOVA
Total 1.810 20
Total 5.810 20

Las Piñas Campus i
“APPENDIX F”
CERTIFICATE OF STATISTICIAN

Las Piñas Campus i
“APPENDIX G”
CERTIFICATE OF TURNITIN

Las Piñas Campus i
“APPENDIX H”
CERTIFICATE OF GRAMMARIAN

Las Piñas Campus i
CURRICULUM
VITAE

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RISK MANAGEMENT ON FRAUD DETECTION AND PREVENTION

OF COFFEE SHOPS IN LAS PIÑAS CITY

A Research paper presented to the

Bueron, Louise Jill S.

This undergraduate thesis entitled “RISK MANAGEMENT ON FRAUD

PROF. RYAN JAY CARASCO, CPA

ORAL EXAMINATION COMMITTEE

Approved by Oral Examination Committee with the grade of______.

MAICO ANTONIO JR., CPA ANNELEN B. MARCOS, CPA, MBA

AMIR AUDITOR, CPA, MSA

Accepted and approved in partial fulfilment of the requirements for the

LETICIA C. GAMAD, MBA, MAED, DBA

College of Business Administration and Accountancy

The researchers wishes to express their outmost gratitude

and appreciation for the selfless help of the following individuals:

First and foremost, we would like to thank GOD for sustaining

us and guiding us throughout the entire span of our research, truly

the wisdom and guidance that He provided enabled us to

accomplish all that were required of us.

We would also like to thank our research adviser, SIR RYAN

JAY CARASCO, for his insights and recommendations on how we

were to finalize and continually progress in our research.

We’d also like to acknowledge our research professor, SIR

AMIR AUDITOR, for his unending efforts in sharing valuable inputs

that aided us during the course of our study.

College of Business Administration and Accountancy

We would also like to extend our gratitude to OTHER

PROFESSORS, PANELISTS, EVALUATORS who gave their time

We extend our thanks to our friends and family who showed us

their never-ending support.

Lastly, we would also like to acknowledge the INSTRUCTOR

from various establishments who patiently and willingly

participated in answering all our queries to help us progress in our

study, without them the study wouldn’t have been possible to

College of Business Administration and Accountancy

Name of : University of Perpetual Help

Address : Risk Management on Fraud

Title : Risk Management on Fraud

Author : Louise Jill S. Bueron

Degree : Bachelor of Science in Accounting

Date : October 2018

College of Business Administration and Accountancy

This study focused on the risk management on fraud detection

and prevention of coffee shops in Las Piñas City. It was

administered to a purposive and non-probability sample of 42

coffee shops located in Las Piñas City.

This study utilized descriptive quantitative research and

employed statistical treatment of data using frequency,

descriptive, one-way ANOVA, and Post Hoc tests.

As the study concluded there is a significant difference

between the practices of independence verification on the number

of employees with regards to risk management in terms of fraud.

There is also a significant difference between the practice of

keeping accounting records and the number of employees. Lastly,

the study also concluded that there is a significant difference

between the practice of monitoring and the number of employees.

College of Business Administration and Accountancy

TABLE OF CONTENTS vii

LIST OF TABLES xii

LIST OF FIGURES xix

1 THE PROBLEM AND ITS SETTING

Statement of the Problem 10