Risk factors and the prediction of fraud in the Philippine setting

• Main Authors: Paredes, Maria Alyssa M., Regidor, Dan Paolo H., Reyes, Joselle Marie R., Yeo, Natalie Jane L.
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Corporations > Corrupt practices; Commercial crimes; Accounting fraud; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/10833
• Institution: De La Salle University

This study identified the risk factors empirically related to corporate fraud in the Philippines. It was based on the original study conducted by Skousen et. al (2006) entitled Contemporaneous Risk Factors and the Prediction of Financial Statement Fraud, and it identified a number of individual factors related to fraud in various setting to Philippine based companies. The researchers assigned potential fraud risk factors as representatives to the elements of the fraud diamond. These risk factors were then examined, and those with significant effects on fraud prediction were retained. A fraud prediction model was constructed using these factors. The analysis yielded a number of risk factors that were related to pressure. These factors were Sales over Total Assets (SALTA) and Total Debt over Total Assets (LEVERAGE). The resulting fraud prediction model correctly classified fraud and no-fraud firms 76.7percent of the time, which was higher than that of the Skousen's study.