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Detecting Fraud Using Modified Benford Analysis

Winter, Christian and Schneider, Markus and Yannikos, York Peterson, Gilbert and Shenoi, Sujeet (eds.) (2011):
Detecting Fraud Using Modified Benford Analysis.
In: IFIP Advances in Information and Communication Technology, 361, In: Advances in Digital Forensics VII, Seventh IFIP WG 11.9 International Conference on Digital Forensics, Orlando, Florida, USA, January 30 – February 2, 2011, Revised Selected Papers, pp. 129–141,
Springer, USA, Florida, Orlando, National Center for Forensic Science, ISBN 978-3-642-24211-3,
DOI: 10.1007/978-3-642-24212-0_10,
[Conference or Workshop Item]

Abstract

Large enterprises frequently enforce accounting limits to reduce the impact of fraud. As a complement to accounting limits, auditors use Benford analysis to detect traces of undesirable or illegal activities in accounting data. Unfortunately, the two fraud fighting measures often do not work well together. Accounting limits may significantly disturb the digit distribution examined by Benford analysis, leading to high false alarm rates, additional investigations and, ultimately, higher costs. To better handle accounting limits, this paper describes a modified Benford analysis technique where a cut-off log-normal distribution derived from the accounting limits and other properties of the data replaces the distribution used in Benford analysis. Experiments with simulated and real-world data demonstrate that the modified Benford analysis technique significantly reduces false positive errors.

Item Type: Conference or Workshop Item
Erschienen: 2011
Editors: Peterson, Gilbert and Shenoi, Sujeet
Creators: Winter, Christian and Schneider, Markus and Yannikos, York
Title: Detecting Fraud Using Modified Benford Analysis
Language: ["languages_typename_1" not defined]
Abstract:

Large enterprises frequently enforce accounting limits to reduce the impact of fraud. As a complement to accounting limits, auditors use Benford analysis to detect traces of undesirable or illegal activities in accounting data. Unfortunately, the two fraud fighting measures often do not work well together. Accounting limits may significantly disturb the digit distribution examined by Benford analysis, leading to high false alarm rates, additional investigations and, ultimately, higher costs. To better handle accounting limits, this paper describes a modified Benford analysis technique where a cut-off log-normal distribution derived from the accounting limits and other properties of the data replaces the distribution used in Benford analysis. Experiments with simulated and real-world data demonstrate that the modified Benford analysis technique significantly reduces false positive errors.

Title of Book: Advances in Digital Forensics VII, Seventh IFIP WG 11.9 International Conference on Digital Forensics, Orlando, Florida, USA, January 30 – February 2, 2011, Revised Selected Papers
Series Name: IFIP Advances in Information and Communication Technology
Volume: 361
Publisher: Springer
ISBN: 978-3-642-24211-3
Uncontrolled Keywords: Secure Data;Auditing, fraud detection, Benford analysis
Divisions: LOEWE > LOEWE-Zentren > CASED – Center for Advanced Security Research Darmstadt
LOEWE > LOEWE-Zentren
LOEWE
Event Location: USA, Florida, Orlando, National Center for Forensic Science
Date Deposited: 30 Dec 2016 20:23
DOI: 10.1007/978-3-642-24212-0_10
Identification Number: TUD-CS-2011-0015
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