Measuring the Quality of European Statistics

Benford's Law ◽  
2015 ◽  
Author(s):  
Bernhard Rauch ◽  
Max Göttsche ◽  
Gernot Brähler ◽  
Stefan Engel
Keyword(s):  
Financial Data ◽  
Benford’S Law ◽  
Data Set ◽  
The Social ◽  
Benford's Law ◽  
Social Statistics ◽  
Government Deficit ◽  
Deficit Spending ◽  
European Statistics

This chapter analyzes Greek statistics which are not relevant to government deficit spending and compare the findings with the results of prior research, which had shown a significant deviation from Benford's law of the first digits distribution of Greek financial statistics. The hypothesis here is that the social data set should conform better with Benford's law than the financial data set, as the incentive for manipulation is lower. However, the results in this chapter show that, in contrast to their financial data, the Greek social statistics data have a good fit with Benford's law. The chapter interprets this outcome as a sign for the effectiveness of the Benford test.

scholarly journals THE LINK BETWEEN EARNINGS MANAGEMENT AND DIGITAL PATTERN / O elo entre gerenciamento de resultado e padrão digital

2014 ◽  
Vol 14 (1) ◽  
pp. 351
Author(s):  
Jennifer Martínez Ferrero ◽  
Beatriz Cuadrado Ballesteros ◽  
Marco Antonio Figueiredo Milani Filho
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Reporting Quality ◽  
Poor Quality ◽  
Financial Data ◽  
Benford’S Law ◽  
Similar Distribution ◽  
Data Set ◽  
Benford's Law ◽  
High Degree

<p>According to Dechow and Dichev (2002) and Lin and Wu (2014), a high degree of earnings management (EM) is associated with a poor quality of information. In this sense, it is possible to assume that the financial data of companies that manage earnings can present different patterns from those with low degree of EM. The aim of this exploratory study is to test whether a financial data set (operating expenses) of companies with high degree of EM presents bias. For this analysis, we used the model of Kothari and the modified model of Jones (“Dechow model” hereafter) to estimate the degree of EM, and we used the logarithmic distribution of data predicted by the Benford’s Law to detect abnormal patterns of digits in number sets. The sample was composed of 845 international listed non-financial companies for the year 2010. To analyze the discrepancies between the actual and expected frequencies of the significant-digit, two statistics were calculated: Z-test and Pearson’s chi-square test. The results show that, with a confidence level of 90%, the companies with a high degree of EM according to the Kothari model presented similar distribution to that one predicted by the Benford’s Law, suggesting that, in a preliminary analysis, their financial data are free from bias. On the other hand, the data set of the organizations that manage earnings according to the Dechow model presented abnormal patterns. The Benford´s Law has been implemented to successfully detect manipulated data. These results offer insights into the interactions between EM and patterns of financial data, and stimulate new comparative studies about the accuracy of models to estimate EM.</p><p>Keywords:<strong> </strong>Earnings management (EM). Financial Reporting Quality (FRQ). Benford’s Law.</p>

scholarly journals Benford’s Law as an Instrument for Fraud Detection in Surveys Using the Data of the Socio-Economic Panel (SOEP)

2011 ◽  
Vol 231 (5-6) ◽  
Author(s):  
Jörg-Peter Schräpler
Keyword(s):  
Probability Function ◽  
Fraud Detection ◽  
Numerical Data ◽  
Benford’S Law ◽  
Continuous Data ◽  
Data Set ◽  
Benford's Law ◽  
User Data

SummaryThis paper focuses on fraud detection in surveys using Socio-Economic Panel (SOEP) data as an example for testing newly methods proposed here. A statistical theorem referred to as Benford’s Law states that in many sets of numerical data, the significant digits are not uniformly distributed, as one might expect, but adhere to a certain logarithmic probability function. In order to detect fraud, we derive several requirements that should, according to this law, be fulfilled in the case of survey data.We show that in several SOEP subsamples, Benford’s Law holds for the available continuous data. For this analysis, we developed a measure that reflects the plausibility of the digit distribution in interviewer clusters. We are thus able to demonstrate that several interviews that were known to have been fabricated and therefore deleted in the original user data set can now be detected using this method. Furthermore, in one subsample, we use this method to identify a case of an interviewer falsifying ten interviews not previously detected by the fieldwork organization.

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>

Using Benford’s law on the seismic reflectivity analysis

2018 ◽  
Vol 6 (3) ◽  
pp. T689-T697
Author(s):  
Isadora A. S. de Macedo ◽  
Jose Jadsom S. de Figueiredo
Keyword(s):  
Geomagnetic Field ◽  
Point Of View ◽  
P Wave ◽  
Benford’S Law ◽  
Common Procedure ◽  
Data Set ◽  
Benford's Law ◽  
Distribution Point ◽  
Seismic Reflectivity ◽  
Reflectivity Data

Benford’s law (BL) is a mathematical theory of leading digits. This law predicts that the distribution of first digits of real-world observations is not uniform and follows a trend in which measurements with a lower first digit (1, 2, …) occur more frequently than those with higher first digits (…, 8, 9). A data set from earth’s geomagnetic field, the estimated time in years between reversals of earth’s geomagnetic field, the seismic P-wave speed of earth’s mantle below the southwest Pacific, and other geophysical data obey the BL. Although there are other statistical methods for analyzing a data set, we test, for the first time, the analysis of the seismic reflectivity through the Benford distribution point of view. We applied the BL on real reflectivity data from two wells from the Penobscot field and another two from the Viking Graben field. In both data sets, the reflectivity was in conformity with the BL. Moreover, after analyzing the effect of sonic and density logs despiking on Benford’s distribution through the BL, we found an optimum coefficient for the despiking process, which was a common procedure used to edit the well-log data before its use on reservoir studies.

scholarly journals Asthmatics Treatment Updation and Compliance in the Asthma Management in Northern Districts of Tamilnadu

2020 ◽  
Vol 11 (3) ◽  
pp. 4990-4997
Author(s):  
Mani Dhandayuthapani ◽  
Murugesh Shivashankar
Keyword(s):  
Asthma Management ◽  
P Value ◽  
Asthma Treatment ◽  
Women Patients ◽  
Medical Practitioners ◽  
Asthmatic Patients ◽  
The Social ◽  
Asthma Patients ◽  
Social Statistics

The purpose of this study is to evaluate the treatment of asthmatics in Tamilnadu's northern districts and its compliance in socio-economic aspects. A random sampling, and the non comparative study conducted among 500 asthmatic people around the northern districts of Tamilnadu, including Chennai, Kanchipuram, Vellore, and Puducherry. The questionnaire asked the asthmatics about their treatment updation, and compliance in asthma management, in an open-ended and easily understandable manner. The P-value calculated through the social statistics software and p-value of <0.10 was considered statistically significant. A total of 500 patients enrolled in this study. Total Men asthmatic patients enrolled were 272(55.4%), and women patients were 228(45.6). In asthma, there are two types of drugs involved in the treatment.1.Reliever drugs and 2. Controller drugs. Four hundred seventeen patients in treatment, 6% of patients were in reliever treatment, 69% were in the controlled, and 25% in both the drugs treatment, respectively.In addition,patients in ICS+ LABA combination was 390.21% of patients were in Formoterol+ Beclomethasone(FBE) combination, 39% in Formoterol +Budesonide(FBU), 6% in Formoterol+Fluticasone(FF),4% in Formoterol+Momentasone(FM) and 30% in Salmeterol+Fluticasone(SF). Money spent on their treatment.24% patients spent less than Rs.150 for their asthma treatment for a month, 29% spent Rs.150-300 and more than Rs 300 spent by 47% of the patients. In Asthma Management, Medical practitioners had prescribed ICS +LABA combination for their asthma patients; as a result, patients felt an improved quality of life.

Relational factors affecting dog social attraction to human partners

2010 ◽  
Vol 11 (3) ◽  
pp. 482-503 ◽  
Author(s):  
Manuela Wedl ◽  
Iris Schöberl ◽  
Barbara Bauer ◽  
Jon Day ◽  
Kurt Kotrschal
Keyword(s):  
Companion Animals ◽  
Dyadic Relationships ◽  
Intact Male ◽  
Data Set ◽  
Social Attraction ◽  
Factors Affecting ◽  
The Social ◽  
Relational Factors ◽  
Dog Attachment

We previously showed (Kotrschal et al., 2009) that owner personality and human–dog relationship predicted the performance of a human–dog dyad in a practical task. Based on the same data set we presently investigate the effects of individual and social factors on the social attraction of dogs to their owners. Twenty-two male and female owners and their intact male dogs were observed during a “picture viewing” test, where we diverted the owner’s attention away from their dog whilst it was permitted to move freely around the room. Owner personality axis “neuroticism” and dog personality axis “vocal and aggressive” were, respectively, positively and negatively related to the time the dog stayed in proximity to the owner. Quality of relationship and attachment also had significant effects on this proximity. We conclude that personality and the nature of the human–dog relationship may all influence dogs’ social attraction to their owners. Keywords: companion animals; dog–human attachment; dyadic relationships; human-animal interactions; human–dog attachment; human–dog relationship; human–dog social interactions; personality; pets

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.

Reading Russian Tea Leaves: Assessing the Quality of Bank Financial Statements with the Benford Distribution

2016 ◽  
Vol 19 (04) ◽  
pp. 1650021 ◽  
Author(s):  
Denis Davydov ◽  
Steve Swidler
Keyword(s):  
Reporting Quality ◽  
Financial Statements ◽  
Benford’S Law ◽  
Bank Failures ◽  
Recent Experience ◽  
Net Income ◽  
Balance Sheets ◽  
Detection Algorithms ◽  
Benford's Law

Benford’s Law, a rule concerning first digits of an array of numbers, has frequently been used to test for the reporting quality of financial statements. When applied to the recent experience for Russian banks, one conclusion is that the 2004 regime shift in accounting standards produced higher quality financial statements. Prior to 2004, the Benford evidence suggests that Russian banks tended to round revenues up, expenses down and thus overstate net income. It also appears that banks may have presented stronger balance sheets than warranted. In the second part of the analysis, the practical use of Benford’s Law to discern a looming bank failure appears limited. While there is, perhaps, some beneficial information to be drawn from testing for Benford distribution conformity, in isolation the tests for financial statement manipulation are inconclusive. Instead, Benford might be used with other early warning detection algorithms to recognize impending bank failures.

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