Benford's law - Wikipedia, the free encyclopedia

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7 pointsiamwil2 comments

I remember reading somewhere that this could be used to detect fraud when you're looking at a set of numbers. It's counter-intuitive, so most people, when they're making up fake data skew outside of Benford's law.

A quick search on google says that I wasn't dreaming. http://www.aicpa.org/pubs/jofa/may1999/nigrini.htm

I believe that the IRS uses Benfords law for fraud detection. If the numbers on your tax return do not conform to the law they will investigate further, as there is a good chance that you made the numbers up.

Maybe there is a potential start-up idea in generating and selling credible numbers that will fit Benfords law for creating fraudulent tax returns ;-)

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