EBS Journal of Management Sciences 1(1), pp. 14-31.
ISSN/ISBN: Not available at this time. DOI: Not available at this time.
Abstract: This study employed Benford’s law as a tool for fraud detection and prevention in corporate organizations. The law is based on the principle of observing digit distribution to ensure conformity with the law. Utilizing historical data of selected quoted companies which resulted in an observed frequency count of 1349 digit observations, the study described the utility of the principle in practice. The respondents to other research questions comprised accountants, auditors and accounting tutors, distributed across three states in south-eastern Nigeria. Benford’s Law V2.0 software was used in the digit analysis, while Two-Way Analysis of Variances was used in analyzing the questionnaire responses. Three hypotheses were formulated and tested in the study. The results of empirical data analysis proved the utility of Benford’s law in fraud detection and a statistical technique to be employed in audit analytical procedure. Respondents perceived that statistical techniques were far more adequate than their predecessors' financial ratios and/or intuition based red flags. This research adds to knowledge by advocating the inclusion of more advanced statistical techniques in audit fraud detection schemes. Employing such in the design of audit analytical procedure could have the dual effect of mitigating risk of auditors and exposing material misstatement inherent in financial statements.
Bibtex:
@article{,
author = {Egbunike, Francis Chinedu and
Amakor, Chinelo Ifeoma},
title = {Fraud & auditors analytical procedure: A test of Benford’s law},
year = {2013},
journal = {EBS Journal of Management Sciences},
volume = {1},
number = {1},
pages = {14—31},
url = { https://www.researchgate.net/publication/319811781},
}
Reference Type: Journal Article
Subject Area(s): Accounting