Fact and Fiction in EU-Governmental Economic Data

2011 ◽  
Vol 12 (3) ◽  
pp. 243-255 ◽  
Author(s):  
Bernhard Rauch ◽  
Max Göttsche ◽  
Stefan Engel ◽  
Gernot Brähler
Keyword(s):  
Financial Accounting ◽  
Benford’S Law ◽  
The European Union ◽  
Accounting Data ◽  
Eu Member States ◽  
Government Accounting ◽  
Growth Pact ◽  
Benford's Law ◽  
The Stability

Abstract To detect manipulations or fraud in accounting data, auditors have successfully used Benford’s law as part of their fraud detection processes. Benford’s law proposes a distribution for first digits of numbers in naturally occurring data. Government accounting and statistics are similar in nature to financial accounting. In the European Union (EU), there is pressure to comply with the Stability and Growth Pact criteria. Therefore, like firms, governments might try to make their economic situation seem better. In this paper, we use a Benford test to investigate the quality of macroeconomic data relevant to the deficit criteria reported to Eurostat by the EU member states. We find that the data reported by Greece shows the greatest deviation from Benford’s law among all euro states.

Zur juristischen Begründung des ‚Rettungsschirms‘

2010 ◽  
Vol 61 (2) ◽  
Author(s):  
Dirk Meyer
Keyword(s):  
Market Failure ◽  
The European Union ◽  
Member States ◽  
Market Reactions ◽  
Eu Member States ◽  
Growth Pact ◽  
Financial Burdens ◽  
The Stability ◽  
System Errors ◽  
Bail Out

SummaryThe financial and guarantee aids within the European Financial Stabilisation Mechanism suspend the Stability and Growth Pact as the basis of the European Economic and Monetary Union. The actual ‘suspension’ from the ‘no bail-out’ restriction (Art. 125 TFEU) and the prohibition of funding national debts (Art. 123 TFEU) transfers risks and financial burdens from deeply indebted states to solvent EU member states. This is the beginning of an unauthorized ‘transfer union’.This analysis does not display any evidence of market failure with respect to a potential domino effect for other EU member states. In addition, a destabilizing speculation cannot be identified. The case ‘Greece’ is rather a special case which has become a common model for other member states, caused by the Council of the European Union and the aid packages. Speculations build a part of the observable market reactions apart from pure hedging, but they simply indicate political system errors.The interventions by the European Central Bank do not lead to functioning markets. These interventions rather lead to yield structures that are inadequate in terms of risks and scarcity. Therefore they will cause a misallocation of financial resources with high economic costs.

scholarly journals Detection of Anomalies in Accounting Data Using Benford’s Law: Evidence from India

2016 ◽  
Vol 4 (1) ◽  
pp. 123 ◽  
Author(s):  
Ramesh Chandra Das ◽  
Chandra Sekhar Mishra ◽  
Prabina Rajib
Keyword(s):  
Business Group ◽  
Financial Accounting ◽  
Benford’S Law ◽  
Accounting Data ◽  
Large Size ◽  
Indian Context ◽  
Fixed Assets ◽  
Benford's Law ◽  
Initial Results ◽  
Direct Tax

This study uses the financial accounting data to examine if they depart from Benford’s Law. Using large sample of Indian public listed companies, the study conducts an analysis of the “first digit analysis”, “second digit analysis”, and “first two digit analysis “of test variables such as total assets, receivables, fixed assets, property, plant and equipment, inventory, current assets, current liabilities, sales, selling and distribution expenses, cost of goods sold, cash, EBIT, direct tax, indirect tax. The initial results find that most of the variables have significant deviation from Benford’s Law distribution. Further analyses indicate that business group firms indulge more data anomalies than standalone firms and small size firms have more data anomalies than large size firms in Indian context.

Benford's Law: Analyzing a Decade of Financial Data

2013 ◽  
Vol 10 (1) ◽  
pp. 1-39 ◽  
Author(s):  
Fatima A. Alali ◽  
Silvia Romero
Keyword(s):  
Discretionary Accruals ◽  
Financial Data ◽  
Financial Accounting ◽  
Benford’S Law ◽  
Public Companies ◽  
Accounting Data ◽  
Large Sample ◽  
Big 4 ◽  
Benford's Law

ABSTRACT This study uses a decade of financial accounting data to examine if and how they depart from Benford's Law. Using a large sample of U.S. public companies, we conduct an analysis of the first-two digits of data items generally used in research to measure total accruals and discretionary accruals and where fraud, restatements, and enforcement actions are revealed. We break down a decade of data into six subperiods; pre-SOX Period (2001), SOX 1 Period (2002–2003), SOX 2 Period (2004–2006), SOX 3 Period (2007), Crisis 1 Period (2008), and Crisis 2 Period (2009–2010). We find different indicators of manipulation during the periods studied, as well as differences between small and big companies and companies audited by Big 4 and non-Big 4 firms.

Political aspects of security of the European Union Member States

2020 ◽  
pp. 97-105
Author(s):  
Aleksandra Kusztykiewicz-Fedurek
Keyword(s):  
European Union ◽  
Negative Impact ◽  
The European Union ◽  
Member States ◽  
Eu Member States ◽  
Political Security ◽  
New Institutions ◽  
The Stability ◽  
Key Aspects ◽  
The Eu

Political security is very often considered through the prism of individual states. In the scholar literature in-depth analyses of this kind of security are rarely encountered in the context of international entities that these countries integrate. The purpose of this article is to draw attention to key aspects of political security in the European Union (EU) Member States. The EU as a supranational organisation, gathering Member States first, ensures the stability of the EU as a whole, and secondly, it ensures that Member States respect common values and principles. Additionally, the EU institutions focus on ensuring the proper functioning of the Eurozone (also called officially “euro area” in EU regulations). Actions that may have a negative impact on the level of the EU’s political security include the boycott of establishing new institutions conducive to the peaceful coexistence and development of states. These threats seem to have a significant impact on the situation in the EU in the face of the proposed (and not accepted by Member States not belonging to the Eurogroup) Eurozone reforms concerning, inter alia, appointment of the Minister of Economy and Finance and the creation of a new institution - the European Monetary Fund.

scholarly journals A Note on Distributions of True versus Fabricated Data

1996 ◽  
Vol 83 (3) ◽  
pp. 776-778 ◽  
Author(s):  
Theodore P. Hill
Keyword(s):  
Empirical Evidence ◽  
Case Studies ◽  
Goodness Of Fit ◽  
Recent Case ◽  
Benford’S Law ◽  
Accounting Data ◽  
Goodness Of Fit Tests ◽  
Benford's Law

New empirical evidence and statistical derivations of Benford's Law have led to successful goodness-of-fit tests to detect fraud in accounting data. Several recent case studies support the hypothesis that fabricated data do not conform to expected true digital frequencies.

THE EUROPEAN UNION AND ITALY RELATIONS IN THE CONTEXT OF SUPRANATIONAL FISCAL REGULATION

2021 ◽  
pp. 208-221
Author(s):  
Dmitrii О. Mikhalev ◽  
◽  
Egor’ A. Sergeev ◽  
Keyword(s):  
European Union ◽  
Budget Deficit ◽  
Stability And Growth Pact ◽  
The European Union ◽  
Internal Factors ◽  
Growth Pact ◽  
Discretionary Fiscal Policy ◽  
The Government ◽  
The Stability ◽  
The Eu

The article presents a retrospective analysis of relations between the government of Italy and the European Union institutions in the context of supranational fiscal regulation in 2002–2019. The authors analyze the influence of external and internal factors on the state of public finance in Italy, note the reasons that made it difficult to meet the requirements of the Stability and Growth Pact, study the main issues on the agenda in the EU-Italy relations and their evolution. The authors also come to conclusion that unlike the earlier discussions about correcting budget deficit in Italy, current focus of supranational fiscal governance is shifted to preventing it, what challenges the economic sovereignty of Italy and country’s opportunities to conduct a discretionary fiscal policy.

scholarly journals Applying Benford’s Law to Examine the Quality of Reported Income Numbers of Unlisted Firms

2015 ◽  
Vol 7 (12) ◽  
pp. 211
Author(s):  
Sudershan Kuntluru ◽  
Rachappa Shette ◽  
Achalapathi K.V.
Keyword(s):  
Scenario Analysis ◽  
Listed Companies ◽  
Benford’S Law ◽  
Annual Income ◽  
Empirical Results ◽  
Benford's Law ◽  
Unlisted Firms ◽  
Reported Income

<p>The present study makes an attempt to examine the quality of reported income numbers of unlisted firms in India. The Benford’s Law is applied to examine the digital occurrence of reported income numbers of unlisted firms. The analysis is based on 43,996 reported annual income numbers of 22,147 sample firms during the financial years from 2000-01 to 2011-12. Further, the results are analyzed under four different scenarios viz., ownership, size, age and nature of industry. The empirical results show that the observed proportionate occurrence of zero is significantly less than the expected proportionate occurrence. These results are contrary to the findings of the related studies of listed companies. The results indicate lower quality of reported income numbers of unlisted firms. Based on the scenario analysis, the empirical results indicate that the proportionate occurrence of second single digits of state-owned unlisted firms confirm the Benford’s Law. The present study contributes to the literature by examining the quality of reported income numbers of unlisted firms using the Benford’s Law.</p>

Sign in / Sign up

Export Citation Format

Share Document