Employing Forensic Accounting to Reduce Financial Fraud Practices on

Small Businesses in Bantay

Background/Rationale:
The instances of misconduct within a business are of high potential occurrence. Financial
fraud, while not completely unavoidable, can occur without proper preventive measures. Cahilig
et al. (2022) believe that fraud has the potential to seriously disrupt any company's operations.
Consequently, to address this misconduct, an adept application of accounting principles and
investigative methodologies to unravel financial misconduct like fraud, known as forensic
accounting (Đukić et al., 2023). Forensic accounting is practice of utilizing accounting, auditing,
and investigative skills to assist in legal matters (Ochotorena et al., 2018). According to Hamdan
(2019), high forensic accounting skills will make it possible to discover most of the fraud cases.
Jikiri et al. (2023) strongly agreed the safeguarding of organizations' interests from unfavorable
consequences, thus, it is necessary to have an effective fraud prevention, detection, and response
systems. Accordingly, this study will contribute to achieving Sustainable Development Goal 16:
"peace, justice, and effective institutions", emphasizing the development effective institutions to
reduce and avoid fraudulent transactions.
This proposed study aims to determine whether the use of forensic accounting will help
to reduce fraud in small businesses. With Cressey’s fraud triangle theory and expanded version
of Wolfe and Hermanson’s fraud diamond theory, fraud happens when someone is pressured or
motivated to do the act, has the capability and opportunity, and can rationalize fraudulent
behavior. Also, Jikiri et al. (2022) concluded that peer pressure may drive people to engage with
white-collar crimes. Fraud is not just a threat to small businesses but a threat to every
organization regardless of their types and sizes (Macailao, 2020). Hamal et al. (2022) recited that
small businesses are more vulnerable than large businesses and losses are more destructive. Ruiz
(2022) stated that forensic accounting’s main goal is to uncover fraudulent acts in a business and
small businesses are at a higher risk of fraud. In conducting the study, the researchers may be
able to determine if employing forensic accounting to small businesses can reduce fraud.
Forensic accounting techniques provides help in investigating fraud since accounting and
analytical skills are used (Keeriyat et al. 2022). There is a need for small-medium enterprises to
employ forensic accounting tools to prevent frauds in organizations (Oladejo et al., 2023).
Therefore, the proposed study will be conducted.

Objectives:
The objective of the study is to determine whether the use of forensic accounting will
help reduce fraud in small businesses. The specific objectives of the study are:
1.) to identify awareness and preventive measures of financial managers about financial
fraud;
2.) to examine how internal and external factors influence the intention to use forensic
accounting;
3.) to examine perception and attitudes towards the intention to use forensic accounting; and
4.) to implement the use of forensic accounting in small businesses as means to reduce
financial fraud.

Brief Discussion of Methods:

 The proposed study will use a mixed method which involves qualitative and quantitative
approach. In qualitative approach, survey questionnaire will be used in collecting data.
Collecting of data will be administered through personal appearance. Descriptive analysis will be
used to analyze the quantitative data that will be collected. The respondents of the study will be
the managers of small businesses. The participation of the respondents will be treated with
utmost confidentiality.

References:
 Abduraji, T. S., Amparo, A. M., Cellon, N. B.Jr., Habib, M., Jikiri, F. U., Toring, C. N., &
Yagaya, A. V. (2022). Assessment of Microfinance Fraud Cases: A Philippines Study. OIDA
International Journal of Sustainable Development, (15), 37-56.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4371473
 Baldres, R. N., Gudani, V. C., & Ochotorena, F. R. (2018). Forensic Accounting: In the Context
of Banking Operations. Highest Standards: The Official Technical Journal of the Board of
Accountancy, 3, 1-17. 10.13140/RG.2.2.32086.50246
 Cahilig, R. E., Balaoing, C. A., Calnea K. M., Capinig, R. J. C., Galvez, J. D., Gonzales, R. J.,
Lldanes S. O., Ocenar, M. J., Rey, C. H., Solana M. P., & Jommel C. (2022). Fraud
Management Techniques of Small and Medium Enterprises in the City of San Jose del
Monte, Bulacan. International Journal of Academic Multidisciplinary Research, 6(10), 59-
63. 10.13140/rg.2.2.19011.78883
 Đukić, T., Pavlović, M., & Grdinić, V. (2023). Uncovering Financial Fraud: The Vital Role of
Forensic Accounting and Auditing in Modern Business Practice. Economic Themes, 61(3),
407–418. 10.2478/ethemes-2023-0021
 Ruiz, E. G., CPA. (2022). Forensic Accounting vs Auditing: A Small Business Guide. Fit Small
Business. https://fitsmallbusiness.com/forensic-accounting-vs-auditing/
 Hamdan, M. W. (2019). The Role of Forensic Accounting in Discovering Financial Fraud.
International Journal of Accounting Research, 6 (2). 10.35248/2472-114x.18.6.176
 Hamal, S. & Senvar O. (2022). Examining Fraudulent Financial Statements of Small and
Medium Sized Enterprises (SMEs) from Different Sectors in Turkey. European Journal of
Science and Technology, (41), 211-220. 10.31590/ejosat.1063728
 Keeriyat, V., Lama, B., & Nishad, A. (2022). A Study on Forensic Accounting: Descriptive
Study. International Advanced Research Journal in Science, Engineering, and Technology, 9
(4), 540-543. 10.17148/IARJSET.2022.9488
 Macailao, C. (2020). Raising the Red Flags: The Concept and Indicators of Occupational
Fraud. Multidisciplinary Review Journal, 7 (11), 26-29. 10.31838/jcr.07.11.06
 Oladejo, O. O. D., & Olorunsola, G. I. (2023). Forensic Accounting and Fraud Prevention in
Owner-Managed Small and Medium Enterprises (SMEs) in Ogun State, Nigeria.
International Journal of Research and Innovation in Social Science, 7 (10), 477–490.
10.47772/ijriss.2023.701040

Proponents:

Sacramento, Ken Jovannie S.

Sunio, Kizzneth C.
 Taberdo, Desiree Jane T.

Turqueza, Godfrey P.

Yago, Geryll Moana Marie I.