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Zhang, S and Kang, Z (2007)

The New Toll of Fraud Audit in Information Age: Benfordís Law and Itís Empirical Test from Chinese Listed Companies,

Audit Research (China), Issue 3, pp. 81-87.

ISSN/ISBN: Not available at this time. DOI: Not available at this time.

Note - this is a foreign language paper: CHI



Abstract: Benford's Law, as a very old mathematic law, first mentioned in 1881, predicts a decreasing frequency of first digits from 1 through 9. Benford's Law has been playing an special role in fraud audit by means of the computer-assisted data analysis technology. Major motivation behind the study is introduced the Benford's law to Chinese fraud examiners and verify whether the major financial data of Chinese listed companies accords with the law. Using empirical study method, we verify the financial data from different industries and different modules. We found that the financial data from Chinese stock market accords well with the Benford's law. We also examine the difference between the financial data from 5 listed companies disclosed the fraudulent financial statements and the Benford's law. The paper concludes that the Benford's Law and its CATTs (Computer-Aided Tools and Techniques) can be regarded as a verification device of the fraudulent accounting information. The Correlation Coefficient can be treated as the index to detect symptoms of financial fraud.


Bibtex:
@article {, AUTHOR = {Zhang, Sutong AND Kang, Zhihui}, TITLE = {The New Toll of Fraud Audit in Information Age: Benford's Law and It's Empirical Test from Chinese Listed Companies,}, JOURNAL = {Audit Research}, YEAR = {2007}, VOLUME = {3}, PAGES = {81-87}, }


Reference Type: Journal Article

Subject Area(s): Accounting