International Journal of Auditing and Accounting Studies 5(2) pp. 119-163.
ISSN/ISBN: Not available at this time. DOI: 10.47509/IJAAS.2023.v05i02.01
Abstract: This study employs empirical data to examine how Benford’s law can be used to identify accounting data fraud in Nigeria. There is a need for an extra tool in the identification of accounting data fraud due to the alarmingly high level of skill of those who commit accounting data fraud, which is problematic for businesses and others who rely on financial reporting. The goals of this study were to examine the applicability of Benford’s law to Nigerian accounting data, assess how well accounting data complied with Benford’s law, and assess the possible efficacy of Benford’s law in identifying accounting data fraud in the Nigerian context. Data were taken from Cadbury Nig. Plcannual’s reports for the previous 15 years. Benford’s digits test was used to analyse the data, and the Z-Statistics and Chi-Square (x2) statistics were used to evaluate the hypotheses. Findings showed that data from errant years failed the conformance test with a 2 value more than the threshold value of 15.51, indicating anomalies, at 36.814 instead of 15.51. The conformance test was passed by the years’ data with no inaccuracies thanks to two values falling within the permitted range of 15.51. This demonstrated the usefulness of Benford’s Law in identifying accounting data fraud. Therefore, it is advised that it be used in conjunction with other audit approaches to increase audit effectiveness.
Bibtex:
@article{,
author= {Etim Osim Etim and Emmanuel E. Daferighe and Augustine Brenden Inyang and Michael Esua Ekikor},
title = {Application of Benford’s Law and the Detection of Accounting Data Fraud in Nigeria},
year = {2023},
journal = {International Journal of Auditing and Accounting Studies},
volume = {5},
number = {2},
pages = {119--163},
doi = {10.47509/IJAAS.2023.v05i02.01},
url = {https://www.arfjournals.com/ijaas/issue/238},
}
Reference Type: Journal Article
Subject Area(s): Accounting