IS BENFORD'S LAW EFFECTIVE IN FRAUD DETECTION FOR EXPENSE CYCLE?
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Date
2020
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Access Rights
info:eu-repo/semantics/openAccess
Abstract
Despite measures taken by firms to prevent fraud, it has been found in recent studies that losses derivedfrom fraudulent activities are increasing on a global basis. International standards on auditing do not definewhich analytical approaches and technological tools to be used in performing audit. Decisions are lefton the auditor’s judgment. Auditors try to use digital techniques to deal with mass data sets generatedby firms. Academic research may mislead practitioners as controversial outcomes exist in literatureconcerning empirical research. Benford’s Law (BL) is one of the methods used frequently in digital analysis.Although some researchers defend the use of BL in audit, especially in fraud detection, this paper disputesits effectiveness for expense cycle. Different firm’s data are tested to conclude that the use of BL is notappropriate for expense items. The reasons of this deficiency are explained in this paper.
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Keywords
Benford’s Law, Fraud, Expense Cycle, Audit
Journal or Series
Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi
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Scopus Q Value
Volume
42
Issue
2
