Benford's law first significant digit and distribution distances for testing the reliability of finanical reports in developing countries
Wediscuss 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.
Citation : Shi, J., Ausloos, M. and Zhu T. (2018) Benfords law first significant digit and distribution distances for testing the reliability of financial reports in developing countries. Physica A Statistical Mechanics and its Applications, 492, pp. 878-888
ISSN : 0378-4371
Research Institute : Finance and Banking Research Group (FiBRe)
Peer Reviewed : Yes