ROLE OF BENFORD’S LAW IN DETECTION OF FINANCIAL FRAUD OR CRIME OF SELECTED PUBLIC SECTOR BANKS IN INDIA
DOI:
https://doi.org/10.55829/1ksbrx43Keywords:
Financial Fraud or Crime, Digit Probability and Benford’s Law.Abstract
Most of the frauds occurred by corporate and key managerial personnel using the loophole /absence of rules and regulations connected with the bookkeeping / accounting for their personal gain. There are new methods or models developed and used in finding fraudulent practices i.e., The fraud triangle, fraud Diamond, Altman z score and Benford’s Law. Benford’s Law is widely used for Detection of financial Fraud and crime and known as digit probability. In this study, we use Benford’s Law in Detection of financial Fraud or crime of selected public sector banks. We took a sample of top five public sector bank of India. Outcomes of study investigate that the Frequency of first digit to fourth digit of SBI, PNB, BOB, BOI and Canara bank were slightly less than or more than the normal frequency of Benford’s law and it is not exact same as Benford’s law frequency. This study concludes that if any investor wants to check or collect the evidence then he or she can use Benford’s Law in Detection of financial Fraud or crime.
References
[1] Edy Sujana, I Nyoman Putra Yasa, Made Arie Wahyuni., (2018) Testing of Fraud Diamond Theory Based on Local Wisdom on Fraud Behavior, Advances in Economics, Business and Management Research, volume 69, 3rd International Conference on Tourism, Economics, Accounting, Management, and Social Science (TEAMS 2018)
[2] Mateja Gorenc., Benford’s Law as a Useful Tool to Determine Fraud in Financial Statements, International School of Social and Business Studies and Management, Slovenia, 14 (1): 19–31
[3] Lawless, Christopher J., and Robin Williams. “Helping with Inquiries or Helping with Profits? The Trials and Tribulations of a Technology of Forensic Reasoning.” Social Studies of Science, vol. 40, no. 5, 2010, pp. 731–55. JSTOR, http://www.jstor.org/stable/25746361. Accessed 28 Apr. 2023.
[4] Caplan, Dennis. “Internal Controls and the Detection of Management Fraud.” Journal of Accounting Research, vol. 37, no. 1, 1999, pp. 101–17. JSTOR, https://doi.org/10.2307/2491398. Accessed 28 Apr. 2023.
[5] Misiewicz, Kevin M. “The Normative Impact of CPA Firms, Professional Organizations, and State Boards on Accounting Ethics Education.” Journal of Business Ethics, vol. 70, no. 1, 2007, pp. 15–21. JSTOR, http://www.jstor.org/stable/25075267. Accessed 28 Apr. 2023
Downloads
Published
Issue
Section
License
Copyright (c) 2025 International Journal of Management, Public Policy and Research
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
