1

IMPACT OF ROBOTIC PROCESS AUTOMATION

IN INVENTORY AUDITING OF SELECTED RETAIL ENTERPRISES

IN SAN PEDRO CITY, LAGUNA

Presented by:

DIANG, Ricky Mib B.

CUBILLA, Rubieneth May O.

RUBIO, Mellanie Rose G.

 2

CHAPTER 1

THE PROBLEM AND ITS SETTING

Introduction

Robotization is a broad and diverse phenomenon that has become increasingly

prominent in recent years. As the business world becomes more globalized and the Internet

advances, knowledge flows become more fluid, and we are seeing a rapid phase of

digitalization of the whole society, including "Dataism" (Harari, 2018). The digital age has

brought about a number of dramatic changes in the labor market, including positions where

humans are no longer needed and are replaced by robots for specific processes. But there's also

the growth of new employment that necessarily require the acquisition of new digital skills as

well as the need for a strategic approach to information systems. Since the 1970s, robots have

been used in a variety of industries and production processes. Robots have also been used in a

variety of service industries, including tourism, financial services, and, most recently,

accounting and auditing. The field of accounting services has been directly influenced by the

evolution and acceptance of information technologies (Țugui, 2006; Toader, 2012). Starting

from general accounting software, accounting management, inventory and employee

management, etc.
 3

Since many accounting and auditing tasks are repetitive, involve tasks that deal with

multiple systems, involve high levels of transaction processing, and necessarily involve timely

decision-making, Robotic process automation (RPA) has a high potential in these areas (Chan et

al., 2018; Zhang, 2019). RPA is software that is built into an organization's existing IT

infrastructure. In sectors such as invoices or transactions processing, filling in different types of

documents and forms, online or offline worksheets, monitoring, building and updating

databases, data verification or confirmation, database concatenations, and data reconciliations,

RPA can be configured to perform repetitive tasks, thereby relieving employees of their burden.

In the context of the digital age in general, and especially in the case of the accounting

profession's rapid digitalization, this research aims to discuss the topic of RPA and the

challenges it poses to this profession in a particular topic. First, it identifies the patterns of

implementation of RPA in inventory auditing, and secondly, it explains in detail what the

implementation of an RPA entails, as well as its potential future improvements. The results of

the research can be useful to several categories of users, it may apply in retail enterprise and

inventory audit.
 4

Background of the study

Auditing plays a major role in the administration of most companies and has been

widely diverse, both in-depth and critically, to aid all aspects of management in ensuring that all

resources are adequately handled and accounted for, both internally and externally. Cross-

checking accounting reports with physical inventory and records is the method of auditing

inventory. Moreover, to achieve its goals by adopting a comprehensive, structured approach to

evaluating and enhancing the efficacy of risk assessment, control, and governance processes.

Over the past years, auditing inventory has undergone drastic changes that have expanded its

scope in a way that provides contributions to the organization it serves. These changes are

partly influenced by the rising growth of the improvement of technology as time passes by.

In today's generation, science has developed technological advancement such computer

and are created to process and store various information, commands and programs. It is also

used in accounting to process documents, as it does fast and more reliable work than the

accountant. In the past, most accounting processes were performed manually or with the

limited uses of computers for just book-keeping. While Information and Communication

Technology (ICTs) have been developed, technologies such as Artificial Intelligence (AI), Cloud,

and Big Data have been extensively and effectively utilized in accounting processes. (Yoon,
 5

2020). One of the technologies used mainly in terms of accounting is Robotic Process

Automation (RPA). It is a kind of computer software that apprehends and interprets existing

applications to process transactions, manipulate data, and communicate with other digital

systems. For this study, RPA is used as an automatic setup of the procedure and work,

promoting work efficiency.

Much of the audit evidence comes from several sources and can be burdensome for

auditors to collect. The Robotic Process Automation can streamline audit evidence collection

and potentially planning tasks by taking structured data and incorporating it from different

sources into one audit work paper. As a result, RPA can conduct audit evaluations that have

been preprogrammed in other software systems, such as Excel or Case Ware IDEA (Moffitt et

al.). In this manner, RPA can help auditors achieve near end-to-end audit process automation.

Moreover, the researchers study the impact of Robotic Process Automation in the Internal

Auditing of Selected Retail Enterprises in San Pedro City, Laguna, with RPA and enterprises as

the independent and dependent variables, respectively.

Statement of the problem

The purpose of this study is to identify the impact of robotic process automation (RPA) in

inventory auditing of selected merchandising enterprises in San Pedro City, Laguna. This study

aims to answer the following specific questions;

1. What is the demographic profile of the respondents in terms of;

 6

1.1. Name (optional)

1.2. Years of employment in the company

2. What is the effect of robotic process automation (RPA) in inventory auditing in terms of;

2.1. Accuracy of data

2.2. Efficiency of work and;

2.3. Risk control of the company’s operation

3. Performance of the employees in terms of;

3.1. Working hours

3.2. Familiarity with the system used by the company

4. Is there a significant effect on robotic process automation (RPA) to inventory auditing of the

selected companies?

Statement of hypothesis

There is no significant effect between the robotic process automation (RPA) and the

inventory auditing of the selected merchandising enterprises.

 7

Theoretical framework

The Technology Acceptance Model, which Davis (1986) first proposed in his doctoral

thesis, arose from psychological theories. Instead of intention to use, the original TAM model

used attitude towards using to mediate actual device use. Attitude towards using was defined

by two factors: perceived usefulness and ease of use, with ease of use also having a causal

impact on perceived usefulness. Davis set system design characteristics as an external variable

influencing both perceived usefulness and ease of use in the original model. (Marangunic &

Granic, 2015). Perceived usefulness, according to Davis (1989), represents an individual's beliefs

about the degree to which system use will improve her job efficiency, while perceived ease of

use is characterized as the degree to which an individual believes system use is free of effort.

Perceived
Usefulness

ROBOTIC Behavioral Actual System

PROCESS Intention Use
ATUOMATION
Perceived
ease of use

Figure 1. Technology acceptance model. (Venkatesh & Davis, 1996)

 8

The external variables construct has been shaping the core Technology acceptance

model constructs by incorporating various aspects derived from various research sources, such

as management support, prior experience, personal innovativeness, self-efficacy, difficulty, and

perceived enjoyment. The most frequently referred variables has been identified to be system

quality, training, compatibility, computer anxiety, self-efficacy, enjoyment, computing support

and experience. (Lee, Kozar & Larsen 2003). According to Legris, Ingham, and Collerette(2003 ,

there is no consistent trend in the selection of the chosen variables, but that exploring and

incorporating such variables into TAM provides a clearer understanding of what activities to

consider in an organizational environment while trying to increase the use of technology.

It has become one of the most widely used acceptance frameworks in the area of

information systems. This reality, however, is also a source of criticism. TAM, according to

Bagozzi (2007), is too simplistic to understand person level decisions and behavior through

various technologies and adoption contexts, and it also lacks possible gaps in decision-making

and decision-makers also he added that the intention-behavior linkage is accepted uncritically

in IS research. As an example, the use-to-goal-attainment gap reflects TAM's view of use

behavior as a final goal, rather than recognizing that use behavior can be a means to greater

goals. Second, it doesn’t consider the various psychological steps that might occur between the

intention formation and the actual behavior. Lastly, the uncertainties that arise after the
 9

adoption decision may force decision-makers to make a complex effort to adopt the

technology, thereby affecting the intention-behavior linkage process.

Conceptual framework

This conceptual framework shows the image for conducting this research about robotic

process automation and internal auditing of selected merchandising enterprises in San Pedro

City, Laguna. 

INPUT PROCESS OUTPUT

 Demographic Profile  Accuracy of data

of the respondents

 Survey questionnaire  Efficiency of work

 Inventory Auditing

 Gathering of data  Risk control of

company’s operation
 Robotic Process
Automation

Figure 2. Conceptual Frameworks

Under INPUT are the demographic profile of the respondents in terms of age, years of

employment~. It also includes the effect of robotic process automation in terms of accuracy of

data, efficiency of work and risk control of the company’s operation and performance of the

employees in terms of time of working and the familiarity with the system used by the

company.
 10

Under PROCESS are the methods in conducting this research: data gathering and survey

questionnaires. While under OUTPUT are the result and proposed output of the study. 

Scope and limitation

This study will be focusing on the impact of robotic process automation (RPA) to the

inventory auditing of the selected merchandising enterprises in San Pedro city, Laguna. The

data collection will be conducted to 100 randomly selected inventory auditing employee in

selected merchandising enterprises in San Pedro city, Laguna who will represent the

population.

This research assesses and analyze the effects of applying advanced technology known

as robotic process automation (RPA) to the operations in inventory auditing and the decision

making of the selected merchandising businesses. This research will not cover other

department in an enterprises and other advance technology. Each employee will answer the

same questionnaire given by the researchers. The given data will only be applicable to the

respondents of the research and it will not applicable to impact of robotic process automation

(RPA) to the inventory auditing of other merchandising enterprises who estrangements to the

population of this research. The questionnaires will be the main source of data and it will be

prepared by the researchers.

 11

Significance of the study

The study will be undertaken to find out the impact of robotic process automation (RPA)

to the operations of inventory auditing of the selected merchandising enterprises in making

decisions in San Pedro city, Laguna.

The findings of the researcher paper will benefit the following individuals and group of

people:

Merchandising enterprises. It will help the merchandising enterprise adopt to the fast-changing

technology and to lessen their operating cost while giving a better service to the consumers.

Inventory Audit. It is hoped that this study will help the inventory audit to enhance auditor’s

ability to do their jobs and give them more time to focus on more complex part of their jobs.

Also, it is hoped that this will give the inventory auditing a quality, more accurate, and less

errors data.

Consumers. This is hoped to give the consumers better service and fast and hassle-free

transactions.

Students. This will give information to the students for future purposes.
 12

Definition of terms

For the purpose of clarifications, the important terms used in this research have been

defined.

The following terms are:

Inventory Auditing – a method of cross-checking accounting reports with physical inventory and

records.

Merchandising Enterprise - engages in the sale of tangible goods to consumers. These

businesses incur costs, such as labor and materials, to present and ultimately sell products

Robotic Process Automation - is the technology that allows anyone today to configure

computer software, or a “robot” to emulate and integrate the actions of a human interacting

within digital systems to execute a business process.

Technological Advancements - is the generation of information or the discovery of knowledge

that advances the understanding of technology.

Physical Inventory - is an actual count of the goods in stock; this can involve counting, weighing,

and otherwise measuring items, as well as asking third parties for counts of inventory items

that have been consigned to them.

Software system - is a type of computer program that is designed to run a computer's hardware

and application programs.

Company operations - refer to activities that businesses engage in on a daily basis to increase

the value of the enterprise and earn a profit.

 13

Artificial intelligence - refers to the simulation of human intelligence in machines that are

programmed to think like humans and mimic their actions.

Auditor - are specialists who review the accounts of companies and organizations to ensure the

validity and legality of their financial records. They can also act in an advisory role to

recommend possible risk aversion measures and cost savings that could be made.

References

Bagozzi, Richard P. (2007). The legacy of the technology acceptance model and a proposal for a

paradigm shift. https://aisel.aisnet.org/jais/vol8/iss4/12/

Chan et al., (2018) , Zhang, (2019) https://www.sirc.net/mt-

content/uploads/2020/07/rpa_whitepaper_and_playbook.pdf

https://www.sciencedirect.com/science/article/pii/S0377221721002629

Davis, Fred D. (1986). The Technology Acceptance Model.

https://www.sciencedirect.com/topics/social-sciences/technology-acceptance-

model#:~:text=Technology%20Acceptance%20Model%20(TAM%3B%20Davis,of%20use%20and

%20perceived%20usefulness

Harari, Yuval Noah. (2016) Homo Deus: A Brief History of Tomorrow. Harvill Secker, United

Kingdom.

Lee, K., Kozar, K. & Larsen, K. (2003). The technology acceptance model: Past, Present, and

Future. https://aisel.aisnet.org/cgi/viewcontent.cgi?article=3217&context=cais
 14

Legris, P. , Ingham, J., & Collerette, P. (2003). Why do people use information technology? A

critical review of the technology acceptance model.

https://www.researchgate.net/publication/222398924_Why_do_people_use_information_te

chnology_A_critical_review_of_the_technology_acceptance_model

Marangunic N. & Granic, A. (2015). Universal Access in the Information Society International

Journal Technology acceptance model: a literature review from 1986 to 2013.

https://www.researchgate.net/publication/270896990_Universal_Access_in_the_Information_

Society_International_Journal_Technology_acceptance_model_a_literature_review_from_198

6_to_2013 - https://link.springer.com/article/10.1007%2Fs10209-014-0348-1

Țugui (2006), Toader (2012). Enterprise Resource Planning’s Revolution for the “facelift” of

Accounting Profession. https://www.researchgate.net/figure/CIG-Graduate-ERP-

Consultant_tbl2_282846417

Yoon, Sora. (2020). A study on the Transformation of Accounting Based on New Technologies:

Evidence from Korea, 12, 8669. file:///C:/Users/user/Downloads/sustainability-12-08669-v2.pdf

 15

Ratings

Leader: Diang, Ricky Mib B.

NAME RATINGS REASON

Cubilla, Rubieneth May O.
Rubio, Mellanie Rose G.
Contributed well enough
10/10 for the revision and
formulation of the
frameworks.
Contributed well enough
10/10 for the revision and
formulation of the
frameworks.