Analysis of Top 500 Central and East European Companies Net Income Using Benford's Law
Analysis of Top 500 Central and East European Companies Net Income Using Benford's Law
Author(s): Mario Žgela, Jasminka DobšaSubject(s): Law, Constitution, Jurisprudence, ICT Information and Communications Technologies
Published by: Fakultet organizacije i informatike, Sveučilište u Zagrebu
Keywords: Benford's Law; first digit test; net income values analysis; data auditing
Summary/Abstract: There are numerous useful methods that can be conducted in data analysis in order to check data correctness and authenticity. One of contemporary and efficient methods is application of so-called Benford's Law. In this paper we examine ways of application of this law in investigation of specific net income number set. Our aim is to make a conclusion if this number set conforms to Benford's Law. An examination target focus is set on values of top 500 central and east European companies according to their income. Data set contains 1,500 records and spans through 3 years (2007, 2008 and 2009) including 500 net incomes per year. Research is based on net income profit and loss subsets as well as absolute values of net income. Analysis covers first digit Benford's Law test and proves conformance to Benford's Law of all observed subsets.
Journal: Journal of Information and Organizational Sciences
- Issue Year: 35/2011
- Issue No: 2
- Page Range: 215-228
- Page Count: 14
- Language: English
