DETECTING EVIDENCE OF NON-COMPLIANCE IN SELF-REPORTED POLLUTION EMISSIONS DATA: AN APPLICATION OF BENFORD'S LAW

The paper introduces Digital Frequency Analysis (DFA) based on Benford's Law as a new technique for detecting non-compliance in self-reported pollution emissions data. Public accounting firms are currently adopting DFA to detect fraud in financial data. We argue that DFA can be employed by environmental regulators to detect fraud in self-reported pollution emissions data. The theory of Benford's Law is reviewed, and statistical justifications for its potentially widespread applicability are presented. Several common DFA tests are described and applied to North Carolina air pollution emissions data in an empirical example.Benford, digital frequency analysis, pollution monitoring, pollution regulation, enforcement, Environmental Economics and Policy, Q25, Q28,

Exploring the Law of Numbers: Evidence from China's Real Estate

The renowned proverb, Numbers do not lie, underscores the reliability and insight that lie beneath numbers, a concept of undisputed importance, especially in economics and finance etc. Despite the prosperity of Benford's Law in the first digit analysis, its scope fails to remain comprehensiveness when it comes to deciphering the laws of number. This paper delves into number laws by taking the financial statements of China real estate as a representative, quantitatively study not only the first digit, but also depict the other two dimensions of numbers: frequency and length. The research outcomes transcend mere reservations about data manipulation and open the door to discussions surrounding number diversity and the delineation of the usage insights. This study wields both economic significance and the capacity to foster a deeper comprehension of numerical phenomena.Comment: DS

AUDITING AND STATISTICS– INTERDISCIPLINARY TEACHING CONCEPT

This paper explores educational aspects of teaching statistics to auditors and controllers. It specifically focuses on employing certain methods of statistical inference in auditing, predominantly from the viewpoint of illuminating the relevant fields of statistics to university students of auditing. Key sections of this paper deal with teaching confidence intervals and Benford's Law to auditors

AUDITING AND STATISTICS– INTERDISCIPLINARY TEACHING CONCEPT

This paper explores educational aspects of teaching statistics to auditors and controllers. It specifically focuses on employing certain methods of statistical inference in auditing, predominantly from the viewpoint of illuminating the relevant fields of statistics to university students of auditing. Key sections of this paper deal with teaching confidence intervals and Benford's Law to auditors

Auditing Symposium XIII: Proceedings of the 1996 Deloitte & Touche/University of Kansas Symposium on Auditing Problems

Meeting the challenge of technological change -- A standard setter\u27s perspective / James M. Sylph, Gregory P. Shields; Technological change -- A glass half empty or a glass half full: Discussion of Meeting the challenge of technological change, and Business and auditing impacts of new technologies / Urton Anderson; Opportunities for assurance services in the 21st century: A progress report of the Special Committee on Assurance Services / Richard Lea; Model of errors and irregularities as a general framework for risk-based audit planning / Jere R. Francis, Richard A. Grimlund; Discussion of A Model of errors and irregularities as a general framework for risk-based audit planning / Timothy B. Bell; Framing effects and output interference in a concurring partner review context: Theory and exploratory analysis / Karla M. Johnstone, Stanley F. Biggs, Jean C. Bedard; Discussant\u27s comments on Framing effects and output interference in a concurring partner review context: Theory and exploratory analysis / David Plumlee; Implementation and acceptance of expert systems by auditors / Maureen McGowan; Discussion of Opportunities for assurance services in the 21st century: A progress report of the Special Committee on Assurance Services / Katherine Schipper; CPAS/CCM experiences: Perspectives for AI/ES research in accounting / Miklos A. Vasarhelyi; Discussant comments on The CPAS/CCM experiences: Perspectives for AI/ES research in accounting / Eric Denna; Digital analysis and the reduction of auditor litigation risk / Mark Nigrini; Discussion of Digital analysis and the reduction of auditor litigation risk / James E. Searing; Institute of Internal Auditors: Business and auditing impacts of new technologies / Charles H. Le Grandhttps://egrove.olemiss.edu/dl_proceedings/1012/thumbnail.jp

Application of Benford's Law in detecting accounting fraud in the Financial Sector

Mestrado em FinançasEste estudo pretende aplicar a Lei de Benford na deteção de fraude contabilística, através da análise dos resultados líquidos das empresas financeiras cotadas durante os anos de 2003 a 2012. O principal objetivo é verificar se esta lei se mantém após a crise de 2007/2008. Como medida de significância estatística utilizou-se o teste Z com um intervalo de confiança de 95%. Confirma-se que a nossa amostra segue a lei de Benford à exceção dos resultados líquidos positivos após o ano 2008 para os dígitos 1, 6 e 9,o que demonstra o efeito da crise de 2007/2008 nas empresas financeiras.This study aims to apply Benford's Law in detecting accounting fraud on the analysis of net income from listed financial companies, through years 2003-2012. Its main purpose is to confirm whether Benford?s Law is still valid after the 2007/2008 financial crisis. To measure the statistical significance, a Z test with a 95% confidence interval was employed. With the exception of a sample showing positive net income after 2008, for the digits 1, 6 and 9, it was confirmed that our sample follows Benford's Law which demonstrates the effect of the 2007/2008 crises on financial companies

DATA QUALITY IN FINANCIAL PLANNING - AN EMPIRICAL ASSESSMENT BASED ON BENFORD\u27S LAW

Planning Processes play an important role in almost any business scenario. In particular, induced by the financial crisis, financial planning as a foundation for liquidity management is paid extraordinary attention to. Its quality and reliability is usually ensured by the use of information systems. Besides process efficiency, a key factor in liquidity management is the quality of the delivered planning data. More recently, business intelligence measures to increase data quality, for instance, realized through decision support services, find their way into the planning process. In this paper, we lay the foundation to include digital analyses of reported financial planning numbers into automated decision support services. In this vein, our contribution is twofold: First, based on a large and representative data set from a renowned, multinational enterprise, we empirically prove that financial planning numbers exhibit a certain, characteristic digit distribution, namely, Benford\u27s Law. Second, we investigate whether decision support services that incorporate intelligence based on Benford\u27s Law are appropriate to increase financial planning data quality. This question is tackled via analyses that relate detailed properties of the delivered data to Benford\u27s Law as a prerequisite for the integration of automated decision support services into business intelligence systems