Using Benford’s Law for Fraud Detection & Auditing
Referred to as the First-Digit Law, Benford’s Law is a mathematical theory conceived over 70 years ago that has aided numerous anti-fraud professionals in solving embezzlement, insurance claims and money laundering cases. Benford's Law gives the expected patterns of the digits in unaltered data, and explains there is a large bias towards the lower digits, so much so that nearly one-half of all numbers are expected to start with the digits 1 or 2.
In this webinar, we will explain the theory behind the law and how it can be used to find potential fraud and errors to help turn your internal audit or fraud investigation into a revenue generating center.
In this session, you will learn:
• How to apply Benford’s law analysis to find outliers in processes such as cash disbursement, general ledger, insurance claims, tax assessments, etc.
• The types of data that do and do not conform to Benford’s Law
• A practical guide to apply Benford’s tests using IDEA software (1st digit, 2nd digit testing, advanced analytics – fuzzy logic, etc.)