Benford’s Law in Forensic Analysis of Registered Turnover

Glogić Edin () and Jasak Zoran ()
Additional contact information
Glogić Edin: College for finance and accountingFINra Tuzla and University “VITEZ” Vitez, Faculty of Business Economics
Jasak Zoran: College for finance and accounting FINra Tuzla

Journal of Forensic Accounting Profession, 2021, vol. 1, issue 1, 50-60

Abstract: Forensic accounting in scientific sense is the part of accounting that assumes the practice of scientific techniques and methods in conducting investigations and detecting criminal activities in financial statements, business statements and companies. One such tool in detecting anomalies in accounting records is the Benford’s Law, which gives the expected pattern of digit frequencies in numeric data sets according to their position in numbers. Because of this property, Benford’s law has become a significant forensic tool for the detection of anomalies, especially in financial business. One of the most important sources is account turnover data in the observed period, which has a debt and credit side. A classic way of analyzing these liabilities is to merge them and then look for a pattern of leading digits. In such approach, it is not possible to properly determine the source of anomalies, which are a guide to deeper analysis. For such purposes, a variant of the Hosmer-Lemeshow test is designed.

Keywords: Benford’s Law; Hosmer-Lemeshow Test; Forensic Accounting; Forensic Analysis (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/jfap-2021-0004 (text/html)

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:vrs:jfaccp:v:1:y:2021:i:1:p:50-60:n:3

DOI: 10.2478/jfap-2021-0004

Access Statistics for this article

Journal of Forensic Accounting Profession is currently edited by Benina Veledar

More articles in Journal of Forensic Accounting Profession from Sciendo
Bibliographic data for series maintained by Peter Golla ().