Benford’s Law and transparency: an analysis of municipal expenditure

Cella, Ricardo Sartori; Zanolla, Ercilio

doi:10.15728/bbr.2018.15.4.2

Cited by 13 publications

(7 citation statements)

References 22 publications

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“…The use of Benford’s Law has proved effective in many fields: insurance [ 6 ], databases [ 7 , 8 ]), economics [ 9 , 10 ], education [ 11 ], election [ 12 ], public administration [ 13 ], real-estate [ 14 ], religion [ 15 ], statistical studies [ 16 , 17 ]. In the field of finance and accounting, Benford’s Law has been applied in audits to establish specific procedures [ 18 ] and to identify potential frauds at the company level [ 19 , 20 , 21 , 22 , 23 ], as well as to combat tax evasion by identification of companies that resort to manipulating the tax base, in order to be included in a lower tax ceiling [ 24 ].…”

Section: Introductionmentioning

confidence: 99%

Reliability of Financial Information from the Perspective of Benford’s Law

Jianu

2021

Entropy

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This study investigates the conformity to Benford’s Law of the information disclosed in financial statements. Using the first digit test of Benford’s Law, the study analyses the reliability of financial information provided by listed companies on an emerging capital market before and after the implementation of International Financial Reporting Standards (IFRS). The results of the study confirm the increase of reliability on the information disclosed in the financial statements after IFRS implementation. The study contributes to the existing literature by bringing new insights into the types of financial information that do not comply with Benford’s Law such as the amounts determined by estimates or by applying professional judgment.

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Section: Introductionmentioning

confidence: 99%

Reliability of Financial Information from the Perspective of Benford’s Law

Jianu

2021

Entropy

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“…In a completely random distribution, the occurrence of each significant first digit would be the same but, interestingly, Benford's law suggests that the number 1 as the first digit is more frequent than the 2 and thus the probabilities of occurrence of each first digit are decreasing up to 9. This tool has been applied to the detection of tax fraud (Nigrini, 1996;Macías and Igua, 2018), manipulation of GDP macroeconomic data (Holz, 2014), household income (Finn and Ranchhod, 2013;Villas-Boas et al, 2015, 2017, public spending (Cella and Zanolla, 2018), among others.…”

Section: Introductionmentioning

confidence: 99%

Self-reported income data: are people telling the truth?

González

2020

JFC

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Purpose This paper aims to detect anomalous data in income reports of Argentina, including personal income – from a sample of households – and statements of public officials. Design/methodology/approach A widely known technique in forensic accounting – such as Benford’s Law – is used. The Chi-square test and the absolute mean deviation are used for verification. The databases consulted include the income declared by households in the Permanent Household Survey – for the 2003-2017 period – and the capital declarations of high-ranking public officials – for the period 1999-2017. Findings The results suggest that income reported in the Encuesta Permanente de Hogares do not follow a Benford´s distribution, and the degree of conformity with this decreases significantly between 2007 and 2015 – coincident with the intervention period of the Instituto Nacional de Estadísticas y Censos. Patrimonial statements of public officials present an acceptable level of compliance with Benford’s law, especially among those of the legislative branch (in more than 90% of cases) although to a lesser extent among officials of the executive branch. Practical implications The results suggest that income reports from the Permanent Household Survey, for the period 2007-2015, should be used with reservations because of their possible manipulation. Originality/value During the intervention of the official statistics institute in Argentina (2007-2015), the idea of lack of credibility of its reports has been disseminated. To date, however, there is no empirical evidence to support it related to income.

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“…This is the main role of online social accountability systems. However, it remains to be seen how the citizen behaves with this type of system (Cella & Zanolla, 2018;Lavigne, 2019).…”

Section: Theoretical Basismentioning

confidence: 99%

Social Accountability: E-Monitoring Public Management in an Emerging Economy

et al. 2021

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Using the theory of planned behaviour, this research investigates whether a computerised system is capable of inducing the intention, and consequently the behaviour of individuals, to monitor public management. The CidadES -Controle Social system was the object of study and the data collection was conducted through an electronic questionnaire. Using structural equation modelling with partial least squares estimation, results indicate that intention and behaviour are mainly influenced by the usefulness that individuals attribute to this type of system. The present study broadens the understanding of behaviour in the use of e-Government systems within the important dimension of social accountability.

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Benford’s Law and transparency: an analysis of municipal expenditure

Cited by 13 publications

References 22 publications

Reliability of Financial Information from the Perspective of Benford’s Law

Reliability of Financial Information from the Perspective of Benford’s Law

Self-reported income data: are people telling the truth?

Social Accountability: E-Monitoring Public Management in an Emerging Economy

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