...Wei-Cheng Shen (Milton); Hao He (Alan); Chih-Chen Lee ABSTRACT Benford’s Law has been frequently used for fraud detection and is introduced in various accounting, auditing, and analytics courses. Instead of using specialized computer-aided auditing tools, this teaching case purports to apply...

... in financial statements conforms to Benford's Law. The financial statements' line items are from a random distribution. For example, the distribution of cash flow from research and development (R&D) is likely to be different than that of sales. As such, the mixed distribution of the realized cash flows may...

... round numbers and consistent ending digits. Four fraud schemes in which the investigation of the round numbers would have uncovered the frauds are then described. The realism of the numbers in accounting textbooks and test banks is then evaluated using Benford's Law, their round number frequencies...

...Bradley J. Barney; Kurt S. Schulzke ABSTRACT False positives or “Type I errors,” wherein test results indicate fraud where none actually exists, have been described as a costly “cry wolf problem” in auditing practice. Benford's Law, which is used as one tool among many in screening for financial...