View More View Less
  • 1 University of Pristina, Kosovska Mitrovica, Serbia
  • | 2 Singidunum University, Belgrade, Serbia
  • | 3 Megatrend University, Belgrade, Serbia
  • | 4 Academy of Criminal Investigation and Police Studies, Belgrade, Serbia
Restricted access

Purchase article

USD  $25.00

1 year subscription (Individual Only)

USD  $700.00

Benford's Law is a useful tool for detecting fraud in financial statements. In this paper we test the financial item named ‘Work performed by the undertaking for its own purpose and capitalised’ applying this tool. The data are taken from the financial reports of all companies submitted to the Serbian Business Register Agency for the period of 2008–2013. Our conclusion shows that there is a very high probability that the frequency distribution of the second digit does not satisfy Benford's Law. In other words, it implies that certain manipulations have been usually done with the second digit of the aforementioned item in the financial statement. This research confirms our hypothesis that financial statement frauds are usually conducted using the second digit.

  • Amiram, D.Bozanic, Z.Rouen, E. (2015): Financial Statement Errors: Evidence from the Distributional Properties of Financial Statement Numbers. Review of Accounting Studies, 20(4): 15401593.

    • Search Google Scholar
    • Export Citation
  • Ausloos, M.Cerqueti, R.Mir, T. A. (2017): Data Science for Assessing Possible Tax Income Manipulation: The Case of Italy. Chaos, Solitons – Fractals, 104: 238256.

    • Search Google Scholar
    • Export Citation
  • Benford, F. (1938): The Law of Anomalous Numbers. Proceedings of the American Philosophical Society, 78(4): 551572.

  • Berger, A.Hill, T. P. (2011): A Basic Theory of Benford's Law. Probability Surveys, 8: 1126.

  • Bhattacharya, S.Xu, D.Kumar, K. (2011): An ANN-Based Auditor Decision Support System Using Benford's Law. Decision Support Systems, 50(3): 576584.

    • Search Google Scholar
    • Export Citation
  • Bose, I.Piramuthu, S.Shaw, M. J. (2011): Quantitative Methods for Detection of Financial Fraud. Decision Support Systems, 50(3): 557558.

    • Search Google Scholar
    • Export Citation
  • Bowlin, K. (2011): Risk-Based Auditing, Strategic Prompts, and Auditor Sensitivity to the Strategic Risk of Fraud. The Accounting Review, 86(4): 12311253.

    • Search Google Scholar
    • Export Citation
  • Bumby, R.Ellentuck, E. (1969): Finitely Additive Measures and the First Digit Problem. Fundamenta Mathematicae, 65(1): 3342.

  • Charbonneau, F.Lachance, R. (2015): Rapport final de la Commission d'enquête sur l'octroi et la gestion des contrats publics dans l'industrie de la construction (Final Report of the Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry). Québec. www.ceic.gouv.qc.ca/fileadmin/Fichiers_client/fichiers/Rapport_final/Rapport_final_CEIC_Integral_c.pdf.

    • Search Google Scholar
    • Export Citation
  • Clippe, P.Ausloos, M. (2012): Benford's Law and Theil Transform of Financial Data. Physica A: Statistical Mechanics and Its Applications, 391(24): 65566567.

    • Search Google Scholar
    • Export Citation
  • Cohen, D. I. (1976): An Explanation of the First Digit Phenomenon. Journal of Combinatorial Theory, Series A, 20(3): 367370.

  • Commission regulation (EC) No 250/2009 of 11 March 2009 implementing Regulation (EC) No 295/2008 of the European Parliament and of the Council as regards the definitions of characteristics, the technical format for the transmission of data, the double reporting requirements for NACE Rev.1.1 and NACE Rev.2 and derogations to be granted for structural business statistics.

    • Search Google Scholar
    • Export Citation
  • Davis, B. (1976): Some Remarks on Initial Digits. Fibonacci Quartely, 14(1): 1314.

  • De Ceuster, M. J.Dhaene, G.Schatteman, T. (1998): On the Hypothesis of Psychological Barriers in Stock Markets and Benford's Law. Journal of Empirical Finance, 5(3): 263279.

    • Search Google Scholar
    • Export Citation
  • Deleanu, I. S. (2017): Do Countries Consistently Engage in Misinforming the International Community about Their Efforts to Combat Money Laundering? Evidence Using Benford's Law. PloS ONE, 12(1): e0169632.

    • Search Google Scholar
    • Export Citation
  • Della Porta, D.Vannucci, A. (2016): The Hidden Order of Corruption: An Institutional Approach. London: Routledge.

  • Diaconis, P. (1973): Limits of Measures of the Integers with Application to Random Number Generators and the Distribution of Leading Digits. Memorandum, NS–211, Department of Statistics, Harvard University.

    • Search Google Scholar
    • Export Citation
  • Diekmann, A. (2007): Not the First Digit! Using Benford's Law to Detect Fraudulent Scientific Data. Journal of Applied Statistics, 34(3): 321329.

    • Search Google Scholar
    • Export Citation
  • Duncan, R. L. (1969): Note on the Initial Digit Problem. Fibonacci Quarterly, 7(5): 474475.

  • Durtschi, C.Hillison, W.Pacini, C. (2004): The Effective Use of Benford's Law to Assist in Detecting Fraud in Accounting Data. Journal of Forensic Accounting, 5(1): 1734.

    • Search Google Scholar
    • Export Citation
  • Flehinger, B. J. (1966): On the Probability That a Random Integer Has Initial Digit A. The American Mathematical Monthly, 73(10): 10561061.

    • Search Google Scholar
    • Export Citation
  • Fourth Council Directive, 78/660/EEC of 25 July 1978.

  • Fu, D.Shi, Y. Q.Su, W. (2007): A Generalized Benford's Law for JPEG Coefficients and Its Applications in Image Forensics. In: Electronic Imaging, Vol. 6505, International Society for Optics and Photonics, San Jose, CA, USA: 65051L DOI: 10.1117/12.704723.

    • Search Google Scholar
    • Export Citation
  • Furlan, L. V. (1946): Das Harmoniegesetz der Statistik: Eine Untersuchung über die metrische Interdependenz der sozialen Erscheinungen (The Law of Harmony in Statistics: References 80 Investigations of the Metrical Interdependence of Social Phenomena), volume 2, Beihefte zum Assekuranzjahrbuch. Basel, Switzerland: Verlag für Recht und Gesellschaft A. G.

    • Search Google Scholar
    • Export Citation
  • Gini, C. (1957): Sulla frequenza delle cifre iniziali dei numeri osservati (On the Frequency of Initial Digits of Observed Numbers). Bulletin de l 'Institut International de Statistique, 35(2): 5776.

    • Search Google Scholar
    • Export Citation
  • Glancy, F. H.Yadav, S. B. (2011): A Computational Model for Financial Reporting Fraud Detection. Decision Support Systems, 50(3): 595601.

    • Search Google Scholar
    • Export Citation
  • Gomes da Silva, C.Carreira, P. M. (2013): Selecting Audit Samples Using Benford's Law. Auditing: A Journal of Practice – Theory, 32(2): 5365.

    • Search Google Scholar
    • Export Citation
  • Hake, E. R. (2005): Financial Illusion: Accounting for Profits in an Enron World. Journal of Economic Issues, 39(3): 595611.

  • Herzel, A. (1957): Sulla distribuzione delle cifre iniziali dei numeri statistici (On the Frequency of Initial Digits of Statistical Numbers). Atti dell XV e XVII Riunione, Societa Italiana di Statistica, Roma, pp. 205228.

    • Search Google Scholar
    • Export Citation
  • Hill, T. P. (1988): Random-Number Guessing and the First Digit Phenomenon. Psychological Reports, 62(3): 967971.

  • Hogan, C. E.Rezaee, Z.Riley, R. A.Velury, U. K. (2008): Financial Statement Fraud: Insights from the Academic Literature. Auditing: A Journal of Practice – Theory, 27(2): 231252.

    • Search Google Scholar
    • Export Citation
  • Jamain, D. (2011): Benford's Law. Dissertation Report. Department of Mathematics, Imperial College, London.

  • Joenssen, D. W. (2013): Two Digit Testing for Benford's Law. Proceedings of the 59th ISI World Statistics Congress, 25–30 August 2013, Hong Kong (Session CPS021): 38813886.

    • Search Google Scholar
    • Export Citation
  • Joksimović, D.Knežević, G. (2016): Benford's Law and the Analysis of the Numerical Data. In: Simović, D. (ed.): International Scientific Conference “Archibald Reiss Days”. Proceedings of International Significance, Academy of Criminalistic and Police Studies, Belgrade, 10 – 11 March 2016, pp. 293306.

    • Search Google Scholar
    • Export Citation
  • Joksimović, D.Knežević, G.Pavlović, V.Ljubić, M.Surovy, V. (2017): Some Aspects of the Application of Benford's Law in the Analysis of the Data Set Anomalies. In: Knowledge Discovery in Cyberspace: Statistical Analysis and Predictive Modeling. New York: Nova Science Publishers, pp. 85120.

    • Search Google Scholar
    • Export Citation
  • Joyce, B. P. (2001): E-diligence: Money Laundering Risks in the Electronic Arena. Journal of Money Laundering Control, 5(2): 146149.

    • Search Google Scholar
    • Export Citation
  • Karavardar, A. (2014): Benford's Law and an Analysis in Istanbul Stock Exchange (BIST). International Journal of Business and Management, 9(4): 160172.

    • Search Google Scholar
    • Export Citation
  • Kumar, K.Bhattacharya, S. (2007): Detecting the Dubious Digits: Benford's Law in Forensic Accounting. Significance, 4(2): 8183.

    • Search Google Scholar
    • Export Citation
  • Ljubić, M.Pavlović, V. (2016): The Role of the Accounting Profession in Prevention and Detection of Financial Statement Fraud. In: Simović, D. (ed.): International Scientific Conference “Archibald Reiss Days”. Proceedings of International Significance, Academy of Criminalistic and Police Studies, Belgrade, 10 – 11 March 2016, pp. 87100.

    • Search Google Scholar
    • Export Citation
  • Marai, A.Pavlović, V. (2013): Earnings Management vs Financial Reporting Fraud – Key Features for Distinguishing. Facta universitatis – series: Economics and Organization, 10(1): 3947.

    • Search Google Scholar
    • Export Citation
  • Martin, J. (2017): How Strong Forensic Data Analytics Capabilities Allow Companies and Contract Owners to Catch Bidding Fraud. KPMG Forensic Focus, 29 March 2017. https://assets.kpmg.com/content/dam/kpmg/ca/pdf/2017/03/ca-forensic-focus-fda-against-bidding-fraud.pdf

    • Search Google Scholar
    • Export Citation
  • McAlister, D. (1879): Law of Frequency. Nature, 20(510): 337.

  • McDaniel, L. S.Kinney, W. R. (1995): Expectation-Formation Guidance in the Auditor's Review of Interim Financial Information. Journal of Accounting Research, 33(1): 5976.

    • Search Google Scholar
    • Export Citation
  • Michalski, T.Stoltz, G. (2013): Do Countries Falsify Economic Data Strategically? Some Evidence That They Might. Review of Economics and Statistics, 95(2): 591616.

    • Search Google Scholar
    • Export Citation
  • Mir, T. A.Ausloos, M.Cerqueti, R. (2014): Benford's Law Predicted Digit Distribution of Aggregated Income Taxes: The Surprising Conformity of Italian Cities and Regions. The European Physical Journal B, 87(11): 261.

    • Search Google Scholar
    • Export Citation
  • Moser, L.Macon, N. (1950): On the Distribution of First Digits of Powers. Scripta Mathematica, 16: 290292.

  • Newcomb, S. (1881): Note on the Frequency of Use of the Different Digits in Natural Numbers. American Journal of Mathematics, 4(1): 3940.

    • Search Google Scholar
    • Export Citation
  • Ngai, E. W. T.Hu, Y.Wong, Y. H.Chen, Y.Sun, X. (2011): The Application of Data Mining Techniques in Financial Fraud Detection: A Classification Framework and an Academic Review of Literature. Decision Support Systems, 50(3): 559569.

    • Search Google Scholar
    • Export Citation
  • Nigrini, M. J. (2017): Audit Sampling Using Benford's Law: A Review of the Literature with Some New Perspectives. Journal of Emerging Technologies in Accounting, 14(2): 2946.

    • Search Google Scholar
    • Export Citation
  • Pinkham, R. S. (1961): On the Distribution of First Significant Digits. The Annals of Mathematical Statistics, 32(4): 12231230.

  • Raimi, R. (1976): The First Digit Problem. The American Mathematical Monthly, 83(7): 521538.

  • Rose, J. M. (2007): Attention to Evidence of Aggressive Financial Reporting and Intentional Misstatement Judgments: Effects of Experience and Trust. Behavioral Research in Accounting, 19(1): 215229.

    • Search Google Scholar
    • Export Citation
  • Shi, J.Ausloos, M.Zhu, T. (2018): Benford's 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: 878888.

    • Search Google Scholar
    • Export Citation
  • Smith, F. (1964): Measuring Risk on Consumer Instalment Credit. Management Science, 11(2): 327340.

  • Spasić, D. (2016): Recent Changes in Regulatory Framework for Financial Reporting in Serbia – A Step Backward in Internationalization of Business? In: Okręglicka, M.Gorzeń-Mitka, I.Lemańska-Majdzik, A.Sipa, M.Skibiński, A. (eds): Proceedings of the 1st International Conference Contemporary Issues in Theory and Practice of Management 2016. Częstochowa: Wydawnictwo Wydziału Zarządzania Politechniki Częstochowskiej, pp. 403409.

    • Search Google Scholar
    • Export Citation
  • Stephens, M. A. (1970): Use of the Kolmogorov–Smirnov, Cramér–Von Mises and Related Statistics without Extensive Tables. Journal of the Royal Statistical Society, Series B (Methodological), 32(1): 115122.

    • Search Google Scholar
    • Export Citation
  • Stoessiger, R. (2013): Benford's Law and Why the Integers Are Not What We Think They Are: A Critical Numeracy of Benford's Law. Australian Senior Mathematics Journal, 27(1): 2946.

    • Search Google Scholar
    • Export Citation
  • The Serbian Business Registers Agency (SBRA) webpage: www.apr.gov.rs.

  • Tóth, I. J.Hajdu, M. (2016): Competitive Intensity and Corruption Risks in the Hungarian Public Procurement 2009–2015. Proceeding of the Corruption Research Center, Budapest, pp. 17.

    • Search Google Scholar
    • Export Citation
  • Whitney, R. E. (1972): Initial Digits for the Sequence of Primes. The American Mathematical Monthly, 79(2): 150152.

  • Zhou, W.Kapoor, G. (2011): Detecting Evolutionary Financial Statement Fraud. Decision Support Systems, 50(3): 570575.

Submit Your Manuscript
 
The author instruction is available in PDF.
Please, download the file from HERE.

 

The description of the refereeing procedure is available in PDF.
Please, download the file from HERE.

 

 

Senior editors

Editor(s)-in-Chief: Prof. Dr. Mihályi, Péter

Editor(s): Ványai, Judit

Editorial Board

  • Ádám Török (Chairman) / University of Pannonia; Budapest University of Technology and Economics
  • Edina Berlinger / Corvinus University of Budapest, Department of Finance
  • Péter Halmai / Budapest University of Technology and Economics; National University of Public Service
  • István Kónya / Institute of Economics Centre for Regional and Economic Studies, University of Pécs
  • János Köllő / Institute of Economics Centre for Regional and Economic Studies
  • István Magas / Corvinus University of Budapest, Department of World Economy; University of Physical Education, Department. of Sports and Decision Sciences
 

Advisory Board

  • Ǻslund, Anders, Institute of International Economics, Washington (USA)
  • Kolodko, Grzegorz, Kozminski University, Warsaw (Poland)
  • Mau, Vladimir, Academy of National Economy (Russia)
  • Messerlin, Patrick A, Groupe d’Economie Mondiale (France)
  • Saul Estrin, London School of Economics (UK)
  • Wagener, Hans-Jürgen, Europa Universität Viadrina (Germany)

Corvinus University of Budapest
Department of Economics
Fővám tér 8 Budapest, H-1093, Hungary

Indexing and Abstracting Services:

  • EconLit
  • Elsevier GEO Abstracts
  • GEOBASE
  • International Bibliographies IBZ and IBR
  • JEL
  • Referativnyi Zhurnal
  • RePEc
  • SCOPUS
  • Social Science Citation Index
  • Index Copernicus

 

2020  
Total Cites 275
WoS
Journal
Impact Factor
0,875
Rank by Economics 325/377 (Q4)
Impact Factor  
Impact Factor 0,534
without
Journal Self Cites
5 Year 0,500
Impact Factor
Journal  0,38
Citation Indicator  
Rank by Journal  Economics 347/549 (Q3)
Citation Indicator   
Citable 37
Items
Total 37
Articles
Total 0
Reviews
Scimago 13
H-index
Scimago 0,292
Journal Rank
Scimago Economics and Econometrics Q3
Quartile Score  
Scopus 225/166=1,4
Scite Score  
Scopus Economics and Econometrics 392/661 (Q3)
Scite Score Rank  
Scopus 0,668
SNIP  
Days from  289
sumbission  
to acceptance  
Days from  447
acceptance  
to publication  

2019  
Total Cites
WoS
212
Impact Factor 0,914
Impact Factor
without
Journal Self Cites
0,728
5 Year
Impact Factor
0,650
Immediacy
Index
0,156
Citable
Items
45
Total
Articles
45
Total
Reviews
0
Cited
Half-Life
3,9
Citing
Half-Life
9,5
Eigenfactor
Score
0,00015
Article Influence
Score
0,052
% Articles
in
Citable Items
100,00
Normalized
Eigenfactor
0,01891
Average
IF
Percentile
28,437
Scimago
H-index
12
Scimago
Journal Rank
0,439
Scopus
Scite Score
214/165=1,3
Scopus
Scite Score Rank
Economics and Econometrics 355/637 (Q3)
Scopus
SNIP
0,989

 

Acta Oeconomica
Publication Model Hybrid
Submission Fee none
Article Processing Charge 900 EUR/article
Printed Color Illustrations 40 EUR (or 10 000 HUF) + VAT / piece
Regional discounts on country of the funding agency World Bank Lower-middle-income economies: 50%
World Bank Low-income economies: 100%
Further Discounts Editorial Board / Advisory Board members: 50%
Corresponding authors, affiliated to an EISZ member institution subscribing to the journal package of Akadémiai Kiadó: 100%
Subscription fee 2021 Online subsscription: 588 EUR / 732 USD
Print + online subscription: 688 EUR / 860 USD
Subscription fee 2022 Online subsscription: 600 EUR / 750 USD
Print + online subscription: 704 EUR / 880 USD
Subscription Information Online subscribers are entitled access to all back issues published by Akadémiai Kiadó for each title for the duration of the subscription, as well as Online First content for the subscribed content.
Purchase per Title Individual articles are sold on the displayed price.

Acta Oeconomica
Language English
Size B5
Year of
Foundation
1966
Publication
Programme
2021 Volume 71
Volumes
per Year
1
Issues
per Year
4
Founder Magyar Tudományos Akadémia
Founder's
Address
H-1051 Budapest, Hungary, Széchenyi István tér 9.
Publisher Akadémiai Kiadó
Publisher's
Address
H-1117 Budapest, Hungary 1516 Budapest, PO Box 245.
Responsible
Publisher
Chief Executive Officer, Akadémiai Kiadó
ISSN 0001-6373 (Print)
ISSN 1588-2659 (Online)

Monthly Content Usage

Abstract Views Full Text Views PDF Downloads
Apr 2021 36 2 0
May 2021 30 1 0
Jun 2021 13 0 0
Jul 2021 26 0 0
Aug 2021 35 0 0
Sep 2021 39 0 0
Oct 2021 16 0 0