Croatian Economic Survey 23(1), pp. 31-61.
ISSN/ISBN: Not available at this time. DOI: 10.15179/ces.23.1.2
Abstract: The objective of preparing and presenting financial statements is to provide information about the financial position and performance of an entity, which is useful to a wide range of users of financial statements for business decisions. If information presented in the financial statements is not full disclosure and/or is incorrect, the presented image of the business entity will be wrong, as well as business decisions made on the basis of such financial statements. Unfortunately, many entities knowingly manipulate revenues and expenses to manage earnings in a way that suits the entity management. Detecting frauds in financial statements is the primary task of forensic accountants. This paper analyzes the possibilities of applying Benford’s law in the forensic analysis of income statements of economic entities in Bosnia and Herzegovina, to detect possible earnings manipulation. The results of the research confirm that the positions of revenues and expenses in the income statements of economic entities in Bosnia and Herzegovina generally follow Benford’s law, but also stress the need to increase attention and conduct additional forensic investigations for certain items as indicators of financial statement manipulation.
Bibtex:
@article{,
author = {Ševala Isaković-Kaplan and Lejla Demirović and
Mahir Proho},
title = {{Benford’s Law in Forensic Analysis of Income Statements of Economic Entities in Bosnia and Herzegovina}},
year = {2021},
journal = {Croatian Economic Survey},
volume = {23},
number = {1},
pages = {31--61},
doi = {10.15179/ces.23.1.2},
url = {https://hrcak.srce.hr/258357},
}
Reference Type: Journal Article
Subject Area(s): Accounting