View Complete Reference

Milojević, M, Terzić, I and Stanišić, S (2020)

Using Benford’s Law to Detect Tax Evasion in Micro-Enterprises in Serbia

Singidunum University International Scientific Conference, December 2020, pp. 32-38.

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

Abstract: The subject matter of this paper is to analyse the tax evasion by micro-enterprises in Serbia in respect of income tax. By applying Benford’s law, we will empirically determine the degree of authenticity of the revenues disclosed by micro-enterprises in their financial statements and whether the tax base to which income tax is paid is disclosed realistically. The research was conducted on a sample of 45 micro-companies and analysis of their financial statements for the period from 2017 to 2019. The research results show that micro-enterprises in Serbia, for the most part, disclose their net income realistically and in accordance with Benford’s law, meaning they don’t show the tendency to underestimate their income with the aim to pay lower taxes or avoid paying them entirely. However the worrying results were obtained when the operating profit was tested. The findings of this research may yield great benefits both to auditors and tax authorities.

@INPROCEEDINGS{, author={Marko Milojević and Ivica Terzić and Snežana Stanišić}, booktitle={Proceedings of Singidunum University International Scientific Conference}, title={Using Benford’s Law to Detect Tax Evasion in Micro-Enterprises in Serbia}, year={2020}, pages={32--38}, url={}, }

Reference Type: Conference Paper

Subject Area(s): Accounting