Benford's Law and Fraud Detection. Facts and Legends

Andreas Diekmann and Ben Jann

No 8, ETH Zurich Sociology Working Papers from ETH Zurich, Chair of Sociology

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)
JEL-codes: C12 C16 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2010-02-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Journal Article: Benford's Law and Fraud Detection: Facts and Legends (2010)
Journal Article: Benford’s Law and Fraud Detection: Facts and Legends (2010)
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