Benford's law first significant digit and distribution distances for testing the reliability of financial reports in developing countries
journal contributionposted on 17.01.2018, 09:52 by Jing Shi, Marcel Ausloos, Tingting Zhu
We discuss a common suspicion about reported financial data, in 10 industrial sectors of the 6 so called “main developing countries” over the time interval [2000–2014]. These data are examined through Benford's law first significant digit and through distribution distances tests. It is shown that several visually anomalous data have to be a priori removed. Thereafter, the distributions much better follow the first digit significant law, indicating the usefulness of a Benford's law test from the research starting line. The same holds true for distance tests. A few outliers are pointed out.