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Benford's Law and Fraud Detection: Facts and Legends
Article first published online: 6 APR 2010
DOI: 10.1111/j.1468-0475.2010.00510.x
© 2010 The Authors. Journal Compilation © Verein für Socialpolitik and Blackwell Publishing Ltd. 2010
Additional Information
How to Cite
Diekmann, A. and Jann, B. (2010), Benford's Law and Fraud Detection: Facts and Legends. German Economic Review, 11: 397–401. doi: 10.1111/j.1468-0475.2010.00510.x
Publication History
- Issue published online: 13 JUL 2010
- Article first published online: 6 APR 2010
- Abstract
- Article
- References
- Cited By
Keywords:
- C12;
- C16
- Benford's law;
- fraud detection;
- false positive;
- false negative;
- regression coefficients
Abstract. Is Benford's law a good instrument to detect fraud in reports of statistical and scientific data? For a valid test, the probability of ‘false positives’ and ‘false negatives’ has to be low. However, it is very doubtful whether the Benford distribution is an appropriate tool to discriminate between manipulated and non-manipulated estimates. Further research should focus more on the validity of the test and test results should be interpreted more carefully.