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Assessing the omission of records from a data set using Benford’s law

Assessing the omission of records from a data set using Benford’s law PurposeThe purpose of this paper is to propose a methodology to estimate the number of records that were omitted from a data set, and to assess its effectiveness.Design/methodology/approachThe procedure to estimate the number of records that were omitted from a data set is based on Benford’s law. Empirical experiments are performed to illustrate the application of the procedure. In detail, two simulated Benford-conforming data sets are distorted and the procedure is then used to recover the original patterns of the data sets.FindingsThe effectiveness of the procedure seems to increase with the degree of conformity of the original data set with Benford’s law.Practical implicationsThis work can be useful in auditing and economic crime detection, namely in identifying tax evasion.Originality/valueThis work is the first to propose Benford’s law as a tool to detect data evasion. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Crime Emerald Publishing

Assessing the omission of records from a data set using Benford’s law

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References (11)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1359-0790
DOI
10.1108/JFC-10-2015-0060
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to propose a methodology to estimate the number of records that were omitted from a data set, and to assess its effectiveness.Design/methodology/approachThe procedure to estimate the number of records that were omitted from a data set is based on Benford’s law. Empirical experiments are performed to illustrate the application of the procedure. In detail, two simulated Benford-conforming data sets are distorted and the procedure is then used to recover the original patterns of the data sets.FindingsThe effectiveness of the procedure seems to increase with the degree of conformity of the original data set with Benford’s law.Practical implicationsThis work can be useful in auditing and economic crime detection, namely in identifying tax evasion.Originality/valueThis work is the first to propose Benford’s law as a tool to detect data evasion.

Journal

Journal of Financial CrimeEmerald Publishing

Published: Oct 3, 2016

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