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Research Paper | Accounting | India | Volume 7 Issue 12, December 2018

An Evaluative Study of Financial Fraud Using Benford Law

Nandini Arora

Abstract: According to past researches (Nigrini, 2012) Accounting data, in general, has a remarkable conformity to Benfords Law; however, it is still an unsolved question whether accounting numbers from companies conform the Benford law and is Benford law providing the auditor with a tool which is effective and simple for the financial fraud detection. In this paper researcher has made an attempt to check the conformity of financial statement of selected sample private company and shell company. The secondary data of two companies for 6 years from the year 2011-12 to 2015-16 has been used for analysis. The result shows that incase of first company i. e. Grameen Financial Services Pvt Ltd there is no significant deviation between observed frequencies and Benford distribution. On the other hand, significant deviation was observed in case of the second company i. e. G V Film Ltd (shell company).

Keywords: Financial Statement, Financial Fraud, Benford law, Shell Companies

Edition: Volume 7 Issue 12, December 2018,

Pages: 710 - 714