Benford’s Law and Fraud Detection: Facts and Legends

Andreas Diekmann and Ben Jann

German Economic Review, 2010, vol. 11, issue 3, 397-401

Abstract: Is Benford’s law a good instrument to detect fraud in reports of statistical and scientific data? For a valid test, the probability of ‘false positives’ and ‘false negatives’ has to be low. However, it is very doubtful whether the Benford distribution is an appropriate tool to discriminate between manipulated and non-manipulated estimates. Further research should focus more on the validity of the test and test results should be interpreted more carefully.

Keywords: Benford’s law; fraud detection; false positive; false negative; regression coefficients (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (6)

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DOI: 10.1111/j.1468-0475.2010.00510.x

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