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Mataković, IC (2019)

The empirical analysis of financial reports of companies in Croatia: Benford distribution curve as a benchmark for first digits

Croatian Review of Economic, Business and Social Statistics (CREBSS) 5(2), pp. 90-100 .

ISSN/ISBN: Not available at this time. DOI: 10.2478/crebss-2019-0014



Abstract: The financial numbers game is unfortunately alive and doing well. One of the forensic accounting techniques is based on Benfordís Law and is used for the detection of unusual transactions, anomalies or trends. The aim of this paper is to test whether the financial statements of Croatian companies deviate from Benfordís Law distribution. The financial statements of 24 companies that are in the pre-bankruptcy settlement process and 24 companies that are not in the pre-bankruptcy settlement process were analysed using the Benfordís Law test of the first digit distribution for the period from 2015 to 2018. The data used to calculate the first digits of distribution were taken from the Zagreb Stock Exchange. The chi-square test has shown that the observed companies that are not in the process of pre-bankruptcy settlement do not have the first digit distribution which follows the Benfordís Law distribution. The Kolmogorov- Smirnov Z test has shown that the distribution of the first digits from the financial statements of companies listed on the Zagreb Stock Exchange fits to Benfordís Law distribution.


Bibtex:
@article {, AUTHOR = {Ivana Cunjak Mataković}, TITLE = {The empirical analysis of financial reports of companies in Croatia: Benford distribution curve as a benchmark for first digits}, JOURNAL = {Croatian Review of Economic, Business and Social Statistics (CREBSS)}, YEAR = {2019}, VOLUME = {5}, NUMBER = {2}, PAGES = {90--100}, DOI = {10.2478/crebss-2019-0014}, URL = {https://content.sciendo.com/configurable/contentpage/journals$002fcrebss$002f5$002f2$002farticle-p90.xml}, }


Reference Type: Journal Article

Subject Area(s): Accounting, Economics