Benford's law: Analyzing a decade of financial data

Fatima A. Alali, Silvia Romero

Research output: Contribution to journalArticlepeer-review

17 Scopus citations


This study uses a decade of financial accounting data to examine if and how they depart from Benford's Law. Using a large sample of U.S. public companies, we conduct an analysis of the first-two digits of data items generally used in research to measure total accruals and discretionary accruals and where fraud, restatements, and enforcement actions are revealed. We break down a decade of data into six subperiods; pre-SOX Period (2001), SOX 1 Period (2002-2003), SOX 2 Period (2004-2006), SOX 3 Period (2007), Crisis 1 Period (2008), and Crisis 2 Period (2009-2010). We find different indicators of manipulation during the periods studied, as well as differences between small and big companies and companies audited by Big 4 and non-Big 4 firms.

Original languageEnglish
Pages (from-to)1-39
Number of pages39
JournalJournal of Emerging Technologies in Accounting
Issue number1
StatePublished - 1 Jan 2013


  • Benford
  • Crisis
  • Manipulation
  • Post-SOX
  • Pre-SOX


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