Can Benford’s Law Detect Tax Fraud? - Deepstash
What Is Benford's Law?

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 ...

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Can Benford’s Law Detect Tax Fraud?

forbes.com

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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 ...

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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...

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The chi-square test has the following steps:

  • determine the expected frequency of the first digit;
  • determine the observed frequency of the first digit;
  • calculate the diffe...

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