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Nigrini, MJ (1999)

Iíve got your number

Journal of Accountancy 187(5), 79-83.

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

Abstract: ABSTRACT: Benford's law provides a data analysis method that can help alert CPAs to possible errors, potential fraud, manipulative biases, costly processing inefficiencies or other irregularities. A physicist at GE Research Laboratories in the 1920s, Frank Benford, found that numbers with low first digits occurred more frequently in the world and calculated the expected frequencies of the digits in tabulated data. CPAs can use Benford's discovery in business applications ranging from accounts payable to Y2K problems. In addition, subset tests identify small lists of serious anomalies in large data sets, making an analysis more manageable. Digital analysis is well suited to finding errors and irregularities in large data sets when auditors need computer assisted technologies to direct their attention to anomalies

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Reference Type: Journal Article

Subject Area(s): Accounting