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Watrin, C, Struffert, R and Ullmann, R (2008)

Benford’s Law: an instrument for selecting tax audit targets?

Review of Managerial Science 2(3), 219-237.

ISSN/ISBN: Not available at this time. DOI: 10.1007/s11846-008-0019-9

Abstract: We consider whether Benford’s Law can be used to improve target selection prior to the start of on-site tax audits, thus increasing effectiveness and efficiency of fiscal enforcement. Laboratory experiments are conducted to obtain manipulated data and compare these to data which are known to be unmanipulated. We find that Benford’s Law can be used as a tool for audit selection, but that auditors must be cautious to ensure that Benford’s Law can be expected to apply to unmanipulated data of the prospective audit target. We also find that subjects cannot adapt sufficiently to Benford’s Law during tax fraud activity.

@article{, title={Benford’s Law: an instrument for selecting tax audit targets?}, author={Watrin, Christoph and Struffert, Ralf and Ullmann, Robert}, journal={Review of Managerial Science}, volume={2}, number={3}, pages={219--237}, year={2008}, publisher={Springer}, DOI={10.1007/s11846-008-0019-9}, }

Reference Type: Journal Article

Subject Area(s): Accounting