The Focus is the Sampling Theory in the Fields of Traditional Accounting Audit and Digital Audit: testing the NewcombBenford Law for the first digit of in public accounts

Josenildo dos Santos, Josedilton Alves Diniz and Luiz João Corrar
Additional contact information
Josenildo dos Santos: University of São Paulo
Josedilton Alves Diniz: University of Brasília
Luiz João Corrar: University of São Paulo

Brazilian Business Review, 2005, vol. 2, issue 1, 69-86

Abstract: The presentation and demonstration of the Newcomb-Benford Law (1881,1938), as a powerful methodology in labor planning in the Audit field, were emphasized by Hill (1998), Pinkham (1961) and Raimi (1985), but its integration with tests of Hypotheses proved more effective for this purpose. For such, the purpose of this article is to present a proposal of an accounting-metric model for the fields of Financial Accounting and Digital Accounting, different from the traditional model used in Brazil. Initially, the accounting-metric, based on the relationship between the Newcomb-Benford Law and The Hypotheses tests (Z-test and Qui-square), introduced by Nigrini (2000) was evidenced. Subsequently, a practical application, using a case study for twenty municipalities of the State of Paraíba was developed to verify the effectiveness of the model presented in this work, considering a population of approximately 104 thousand pledge notes. The methodological procedure used during the development of this research was the deduction method, and, based on a practical application from the pledge notes of the municipalities of Paraíba mentioned above, abstracting the 1st digit and applying the Newcomb-Benford law, measuring the significance level using Hypothesis Tests. It was then verified that the model adopted was capable of delineating the DNA-equivalent of the behavior of the public expenses of the municipalities being analyzed, and the accounting-metric method developed here was verified, and is effective. One thereby concluded that there is a strong sign of overinvoicing and fractioning of expenses to dodge the limit established by Federal Law No. 8666/93, which disciplines acquisitions by bid.

Keywords: samply theory; audit. (search for similar items in EconPapers)
Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://bbronline.com.br/index.php/bbr/article/download/486/736 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bbz:fcpbbr:v:2:y:2005:i:1:p:69-86

Access Statistics for this article

Brazilian Business Review is currently edited by Emerson Mainardes

More articles in Brazilian Business Review from Fucape Business School Fucape Business School Brazilian Business Review Av. Fernando Ferrari, 1358, Boa Vista CEP 29075-505 Vitória-ES. Contact information at EDIRC.
Bibliographic data for series maintained by Sarah Lasso ( this e-mail address is bad, please contact ).