Benford's law first significant digit and distribution distances for testing the reliability of financial reports in developing countries
Statistical Finance
2017-12-04 v1 Statistical Mechanics
Applications
Abstract
We discuss a common suspicion about reported financial data, in 10 industrial sectors of the 6 so called "main developing countries" over the time interval [2000-2014]. These data are examined through Benford's law first significant digit and through distribution distances tests. It is shown that several visually anomalous data have to be a priori removed. Thereafter, the distributions much better follow the first digit significant law, indicating the usefulness of a Benford's law test from the research starting line. The same holds true for distance tests. A few outliers are pointed out.
Keywords
Cite
@article{arxiv.1712.00131,
title = {Benford's law first significant digit and distribution distances for testing the reliability of financial reports in developing countries},
author = {Jing Shi and Marcel Ausloos and Tingting Zhu},
journal= {arXiv preprint arXiv:1712.00131},
year = {2017}
}
Comments
22 pages, 34 references, 4 figures, 7 tables; to be published in Physica A