data diagnostics using second order tests of benford’s law（数据诊断使用二阶测试本福德定律）.pdf

DATA DIAGNOSTICS USING SECOND ORDER TESTS OF BENFORD’S LAW by Mark J. Nigrini Saint Michael’s College Department of Business Administration and Accounting Colchester, Vermont, 05439 mnigrini@smcvt.edu and Steven J. Miller Brown University Department of Mathematics Providence, RI 02912 sjmiller@math.brown.edu June 1, 2006 Copyright © 2005-2006 by Mark J. Nigrini and Steven J. Miller. All rights reserved. We wish to thank the management of the restaurant company for allowing the use of their corporate data in the case study and the simulations. In accordance with their requests we have not shown the actual years that the data relates to and we have approximated so me of the descriptive statistics. We also wish to thank the AJPT reviewers and the editor, Dan Simunic, for their excellent comments. DATA DIAGNOSTICS USING SECOND ORDER TESTS OF BENFORD’S LAW Summary SAS No. 99 requires auditors to use analytical procedures to identify the existence of unusual transactions, events, and trends. This use of analytical procedures and the effective use of the computer on transaction level data is an efficient means for auditors to partially fulfill their duties with regards to the detection of fraud and material misstatements. Benford’s Law gives the expected patterns of the digits in numerical data, and it has been ad