Wednesday, January 19, 2011

Benford's Law Analysis for Fraud Detection

I am working through Urton Anderson's fabuolously helpful book "Implementing the International Professional Practices Framework" and ran across a recommended preventative measure for fraud in chapter 9 - Benford Law's Analysis.

This rang a few vague bells - so I Googled the term and found this site that looks worth looking into. It includes a quick tutorial on how to analyze data for patterns to detect unusual or fraudulent transactions. See http://www.ezrstats.com/Benford.htm Is this vendor trustworthy? I don't know. What matters is the technique - and that the IIA thinks enough of it to expressly recommend it in its literature.

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