Benford's law first significant digit and distribution distances for testing the reliability of financial reports in developing countries

Jing Shi, Marcel Ausloos and Tingting Zhu

Papers from arXiv.org

Abstract: We discuss a common suspicion about reported financial data, in 10 industrial sectors of the 6 so called "main developing countries" over the time interval [2000-2014]. These data are examined through Benford's law first significant digit and through distribution distances tests. It is shown that several visually anomalous data have to be a priori removed. Thereafter, the distributions much better follow the first digit significant law, indicating the usefulness of a Benford's law test from the research starting line. The same holds true for distance tests. A few outliers are pointed out.

Date: 2017-11
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Journal Article: Benford’s law first significant digit and distribution distances for testing the reliability of financial reports in developing countries (2018)
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