Keep reading for FREE
Benford’s law is an observation about the distribution of first digits in unmanipulated numerical data sets. Benford’s law states that the first digit in naturally occurring collections of numbers is more likely to be small than large.
In a number set 0 to 99
11% of the numbers start with 1. Likewise, with every other digit from 2 to 9.
In a number set 0 to 199
more than 50% of the numbers start with 1 and less than 6% start with 2 to 9.
In a number set 0 to 299
37% start with 1, 37% start with 2, and 3.7% each start with 3 through 9.
When number sets obey Benford’s law
30% start with 1, while less than 5% start with 9.
Benford observed that the first digits of naturally occurring multidigit numbers follow a different pattern.
Benford’s law can uncover fictitious numbers in random data sets because data manipulated for tax evasion purposes will likely deviate from Benford’s law, and in that case it is supposed that there had been a tax fraud act.
The difference between the expected and observed frequencies is determined through use of a chi-square test. A chi-square statistic measures how a model of expectations compares with actual observed data.
The chi-square test has the following steps:
When the value computed by the chi-square test exceeds a predetermined critical value, it is appropriate to accept the hypothesis of tax fraud.
MORE LIKE THIS
Ready for the next level?
Read Like a Pro
Explore the World’s
Take Your Ideas
Just press play and we take care of the words.
No Internet access? No problem. Within the mobile app, all your ideas are available, even when offline.
2 Million Stashers
Best app ever! You heard it right. This app has helped me get back on my quest to get things done while equipping myself with knowledge everyday.
This app is LOADED with RELEVANT, HELPFUL, AND EDUCATIONAL material. It is creatively intellectual, yet minimal enough to not overstimulate and create a learning block. I am exceptionally impressed with this app!
Great interesting short snippets of informative articles. Highly recommended to anyone who loves information and lacks patience.
Don’t look further if you love learning new things. A refreshing concept that provides quick ideas for busy thought leaders.
Brilliant. It feels fresh and encouraging. So many interesting pieces of information that are just enough to absorb and apply. So happy I found this.
Even five minutes a day will improve your thinking. I've come across new ideas and learnt to improve existing ways to become more motivated, confident and happier.
I have only been using it for a few days now, but I have found answers to questions I had never consciously formulated, or to problems I face everyday at work or at home. I wish I had found this earlier, highly recommended!
Great for quick bits of information and interesting ideas around whatever topics you are interested in. Visually, it looks great as well.
Read & Learn
Access to 200,000+ ideas
Access to the mobile app
Unlimited idea saving & library
Unlimited listening to ideas
Downloading & offline access
Claim Your Limited Offer
Get Deepstash Pro
75% OFF | 1-Year Pro Subscription