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Several years ago, I was chatting with a forensic accountant in a pub, and he was explaining about the use of Bendford's law in their work. I'd never heard of
by Twirrim 9y ago
Several years ago, I was chatting with a forensic accountant in a pub, and he was explaining about the use of Bendford's law in their work. I'd never heard of the law before, which is partly why it piqued my curiosity at the time. He explained that it was often used as a very quick sniff test for them, but not as proof of innocence or guilt.
Given the relative ease with which it could be calculated and analysed, it essentially became the first thing that they'd do once they'd got hold of the books. They'd do a quick analysis of the numbers, look at the distribution, and then use the outcome to give hints at where something unusual was going on. In his experience some 70-75% of the time, if Benford's law suggested something was odd, it was actually odd.