Measuring the Quality of Auditing Services with the Help of Benford’s Law - An Empirical Analysis and Discussion of this Methodical Approach

2009 ◽  
Author(s):  
Manuela Möller
Keyword(s):  
Empirical Analysis ◽  
Benford’S Law ◽  
Methodical Approach ◽  
Benford's Law

scholarly journals Applying Benford’s Law to Examine the Quality of Reported Income Numbers of Unlisted Firms

2015 ◽  
Vol 7 (12) ◽  
pp. 211
Author(s):  
Sudershan Kuntluru ◽  
Rachappa Shette ◽  
Achalapathi K.V.
Keyword(s):  
Scenario Analysis ◽  
Listed Companies ◽  
Benford’S Law ◽  
Annual Income ◽  
Empirical Results ◽  
Benford's Law ◽  
Unlisted Firms ◽  
Reported Income

<p>The present study makes an attempt to examine the quality of reported income numbers of unlisted firms in India. The Benford’s Law is applied to examine the digital occurrence of reported income numbers of unlisted firms. The analysis is based on 43,996 reported annual income numbers of 22,147 sample firms during the financial years from 2000-01 to 2011-12. Further, the results are analyzed under four different scenarios viz., ownership, size, age and nature of industry. The empirical results show that the observed proportionate occurrence of zero is significantly less than the expected proportionate occurrence. These results are contrary to the findings of the related studies of listed companies. The results indicate lower quality of reported income numbers of unlisted firms. Based on the scenario analysis, the empirical results indicate that the proportionate occurrence of second single digits of state-owned unlisted firms confirm the Benford’s Law. The present study contributes to the literature by examining the quality of reported income numbers of unlisted firms using the Benford’s Law.</p>

Reading Russian Tea Leaves: Assessing the Quality of Bank Financial Statements with the Benford Distribution

2016 ◽  
Vol 19 (04) ◽  
pp. 1650021 ◽  
Author(s):  
Denis Davydov ◽  
Steve Swidler
Keyword(s):  
Reporting Quality ◽  
Financial Statements ◽  
Benford’S Law ◽  
Bank Failures ◽  
Recent Experience ◽  
Net Income ◽  
Balance Sheets ◽  
Detection Algorithms ◽  
Benford's Law

Benford’s Law, a rule concerning first digits of an array of numbers, has frequently been used to test for the reporting quality of financial statements. When applied to the recent experience for Russian banks, one conclusion is that the 2004 regime shift in accounting standards produced higher quality financial statements. Prior to 2004, the Benford evidence suggests that Russian banks tended to round revenues up, expenses down and thus overstate net income. It also appears that banks may have presented stronger balance sheets than warranted. In the second part of the analysis, the practical use of Benford’s Law to discern a looming bank failure appears limited. While there is, perhaps, some beneficial information to be drawn from testing for Benford distribution conformity, in isolation the tests for financial statement manipulation are inconclusive. Instead, Benford might be used with other early warning detection algorithms to recognize impending bank failures.

scholarly journals Are COVID-19 Data Reliable? A Quantitative Analysis of Pandemic Data from 182 Countries

COVID ◽  
2021 ◽  
Vol 1 (1) ◽  
pp. 137-152
Author(s):  
Noah Farhadi ◽  
Hooshang Lahooti
Keyword(s):  
Reliable Data ◽  
Benford’S Law ◽  
Global Health Security ◽  
Quality Of Data ◽  
Health Security ◽  
The Past ◽  
Six Nations ◽  
Benford's Law ◽  
The Uk

When it comes to COVID-19, access to reliable data is vital. It is crucial for the scientific community to use data reported by independent territories worldwide. This study evaluates the reliability of the pandemic data disclosed by 182 countries worldwide. We collected and assessed conformity of COVID-19 daily infections, deaths, tests, and vaccinations with Benford’s law since the beginning of the coronavirus pandemic. It is commonly accepted that the frequency of leading digits of the pandemic data shall conform to Benford’s law. Our analysis of Benfordness elicits that most countries partially distributed reliable data over the past eighteen months. Notably, the UK, Australia, Spain, Israel, and Germany, followed by 22 different nations, provided the most reliable COVID-19 data within the same period. In contrast, twenty-six nations, including Tajikistan, Belarus, Bangladesh, and Myanmar, published less reliable data on the coronavirus spread. In this context, over 31% of countries worldwide seem to have improved reliability. Our measurement of Benfordness moderately correlates with Johns Hopkin’s Global Health Security Index, suggesting that the quality of data may depend on national healthcare policies and systems. We conclude that economically or politically distressed societies have declined in conformity to the law over time. Our results are particularly relevant for policymakers worldwide.

scholarly journals Empirical Analysis of Claims Development Trapezoids following Benford’s Law

2018 ◽  
Vol 1 (2) ◽  
Author(s):  
Jochen Heberle ◽  
Tobias Gummersbach
Keyword(s):  
Hypothesis Testing ◽  
Empirical Analysis ◽  
Individual Development ◽  
Benford’S Law ◽  
Characteristic Factor ◽  
Wide Range ◽  
Benford's Law ◽  
The Individual

In this paper we make an empirical analysis of a wide range of claims developmenttrapezoids following Benford’s law. In particular we determine Benfors’s law fordifferent characteristic factors depending on claims development triangles/trapezoids.These characteristic factors are the cumulative claims payments, the incrementalclaims payments and the individual development factors. For each characteristic factor hypothesis testing is done for verifying/rejecting Benford’s law.

scholarly journals What Benford Can Tell Us About Cover Pools – An Empirical Analysis

2015 ◽  
Vol 14 (6) ◽  
pp. 829 ◽  
Author(s):  
Stephan Kienle
Keyword(s):  
Empirical Analysis ◽  
Large Data ◽  
Statistical Evidence ◽  
Large Data Sets ◽  
Benford’S Law ◽  
Data Sets ◽  
Benford's Law ◽  
The Empirical Analysis

Leading digits often follow a distribution described by Newcomb (1881) and Benford (1938). We apply this phenomenon known as Benford’s Law on cover assets provided by issuers of German covered bonds. The main finding of the empirical analysis is that leading digits of these assets seem to follow the Benford distribution. Standard statistical evidence, however, might be misleading due to effects of large data sets. Consequently, the present paper also provides an example of how to deal with large data sets when a Benford distribution is assumed. 

scholarly journals No-Reference Video Quality Assessment Based on Benford’s Law and Perceptual Features

Electronics ◽  
2021 ◽  
Vol 10 (22) ◽  
pp. 2768
Author(s):  
Domonkos Varga
Keyword(s):  
Quality Assessment ◽  
Video Quality ◽  
Perceptual Quality ◽  
Benford’S Law ◽  
Original Video ◽  
Video Quality Assessment ◽  
Volume Data ◽  
Digital Videos ◽  
Benford's Law

No-reference video quality assessment (NR-VQA) has piqued the scientific community’s interest throughout the last few decades, owing to its importance in human-centered interfaces. The goal of NR-VQA is to predict the perceptual quality of digital videos without any information about their distortion-free counterparts. Over the past few decades, NR-VQA has become a very popular research topic due to the spread of multimedia content and video databases. For successful video quality evaluation, creating an effective video representation from the original video is a crucial step. In this paper, we propose a powerful feature vector for NR-VQA inspired by Benford’s law. Specifically, it is demonstrated that first-digit distributions extracted from different transform domains of the video volume data are quality-aware features and can be effectively mapped onto perceptual quality scores. Extensive experiments were carried out on two large, authentically distorted VQA benchmark databases.

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