Firm-related risk factors and the likelihood of financial statement fraud in the Philippines (period 2000-2009)

This study determines a set of firm-related fraud risk factors that affect the likelihood of financial statement fraud in the Philippines. Using Donald R. Cressey's 1953 fraud triangle that identifies the factors that contribute to fraud, proxy variables are derived that are suitable to the Phi...

Full description

Saved in:
Bibliographic Details
Main Authors: Fernandez, Katrina Cartilla, Huang, Michelle Albertte San Luis, Medina, Monette Tan, Militante, Kristin Agawin
Format: text
Language:English
Published: Animo Repository 2012
Subjects:
Online Access:https://animorepository.dlsu.edu.ph/etd_bachelors/18345
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: De La Salle University
Language: English
id oai:animorepository.dlsu.edu.ph:etd_bachelors-18858
record_format eprints
spelling oai:animorepository.dlsu.edu.ph:etd_bachelors-188582022-02-02T07:25:47Z Firm-related risk factors and the likelihood of financial statement fraud in the Philippines (period 2000-2009) Fernandez, Katrina Cartilla Huang, Michelle Albertte San Luis Medina, Monette Tan Militante, Kristin Agawin This study determines a set of firm-related fraud risk factors that affect the likelihood of financial statement fraud in the Philippines. Using Donald R. Cressey's 1953 fraud triangle that identifies the factors that contribute to fraud, proxy variables are derived that are suitable to the Philippine setting. The variables are tested using logit regression with the use of fraudulent firms accused by the SEC and the matching non-fraudulent firms. The results of the study show that among the variables in Cressey's fraud triangle, only opportunity and rationalization are significant, not pressure thus Cresseys' framework is not applicable in the country. CEO, an opportunity variable implying that if the CEO of the company also acts as the chairman of the board, then there is more opportunity for the person to commit fraud, and AUDREPORT, a proxy variable for rationalization claiming that when the audit opinion contains additional language then the likelihood of fraud increases, are the main drivers of the perpetration of fraudulent financial reporting in the Philippines. However, both of these factors must be present for fraud to be committed. The offender must have the opportunity to commit fraud and rationalization that justifies the crime. Opportunity unlocks the doorway to fraud while rationalization draws the person towards it. This study also constructs a fraud prediction model, based on the fraud risk factors identified, suitable to the Philippine setting. The model derived successfully predicts the likelihood of a firm to commit fraud through publicly available information 88.89% of the time. 2012-01-01T08:00:00Z text https://animorepository.dlsu.edu.ph/etd_bachelors/18345 Bachelor's Theses English Animo Repository Misleading financial statements--Philippines Financial statements--Philippines Finance and Financial Management
institution De La Salle University
building De La Salle University Library
continent Asia
country Philippines
Philippines
content_provider De La Salle University Library
collection DLSU Institutional Repository
language English
topic Misleading financial statements--Philippines
Financial statements--Philippines
Finance and Financial Management
spellingShingle Misleading financial statements--Philippines
Financial statements--Philippines
Finance and Financial Management
Fernandez, Katrina Cartilla
Huang, Michelle Albertte San Luis
Medina, Monette Tan
Militante, Kristin Agawin
Firm-related risk factors and the likelihood of financial statement fraud in the Philippines (period 2000-2009)
description This study determines a set of firm-related fraud risk factors that affect the likelihood of financial statement fraud in the Philippines. Using Donald R. Cressey's 1953 fraud triangle that identifies the factors that contribute to fraud, proxy variables are derived that are suitable to the Philippine setting. The variables are tested using logit regression with the use of fraudulent firms accused by the SEC and the matching non-fraudulent firms. The results of the study show that among the variables in Cressey's fraud triangle, only opportunity and rationalization are significant, not pressure thus Cresseys' framework is not applicable in the country. CEO, an opportunity variable implying that if the CEO of the company also acts as the chairman of the board, then there is more opportunity for the person to commit fraud, and AUDREPORT, a proxy variable for rationalization claiming that when the audit opinion contains additional language then the likelihood of fraud increases, are the main drivers of the perpetration of fraudulent financial reporting in the Philippines. However, both of these factors must be present for fraud to be committed. The offender must have the opportunity to commit fraud and rationalization that justifies the crime. Opportunity unlocks the doorway to fraud while rationalization draws the person towards it. This study also constructs a fraud prediction model, based on the fraud risk factors identified, suitable to the Philippine setting. The model derived successfully predicts the likelihood of a firm to commit fraud through publicly available information 88.89% of the time.
format text
author Fernandez, Katrina Cartilla
Huang, Michelle Albertte San Luis
Medina, Monette Tan
Militante, Kristin Agawin
author_facet Fernandez, Katrina Cartilla
Huang, Michelle Albertte San Luis
Medina, Monette Tan
Militante, Kristin Agawin
author_sort Fernandez, Katrina Cartilla
title Firm-related risk factors and the likelihood of financial statement fraud in the Philippines (period 2000-2009)
title_short Firm-related risk factors and the likelihood of financial statement fraud in the Philippines (period 2000-2009)
title_full Firm-related risk factors and the likelihood of financial statement fraud in the Philippines (period 2000-2009)
title_fullStr Firm-related risk factors and the likelihood of financial statement fraud in the Philippines (period 2000-2009)
title_full_unstemmed Firm-related risk factors and the likelihood of financial statement fraud in the Philippines (period 2000-2009)
title_sort firm-related risk factors and the likelihood of financial statement fraud in the philippines (period 2000-2009)
publisher Animo Repository
publishDate 2012
url https://animorepository.dlsu.edu.ph/etd_bachelors/18345
_version_ 1772835325144465408