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Testing the Newcomb-Benford Law: experimental evidence

Uwe Hassler and Mehdi Hosseinkouchack ()

Applied Economics Letters, 2019, vol. 26, issue 21, 1762-1769

Abstract: The (Newcomb-)Benford Law has been widely used to detect fraud in data from accounting and finance, or in economic, survey and scientific data. Many empirical studies rely on the outcomes of two particular statistical tests. Our power investigation shows that these tests are weak in terms of power under specific fraudulent pattern. Much more powerful criteria are identified, and in particular, a simple, one-sided mean test is recommended.

Date: 2019
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DOI: 10.1080/13504851.2019.1597248

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