WSJ discovers Benford’s Law

by Kurt Schulzke

At WSJ.com today, in Accountants Increasingly Use Data Analysis to Catch Fraud, Jo Craven McGinty reports on recent innovations in auditing that could make it harder to get away with embezzlement and financial statement fraud. The article is primarily about Benford’s Law. Money quote from yours truly:

“It [Benford’s Law] has the potential to add some big-time value,” said Kurt Schulzke, an accounting professor at Kennesaw State University in Georgia. “There has not been much innovation in the auditing profession in a long time, partly because they have ignored mathematics.”

Benford’s Law graphic

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