Detecting Cosmetic Earnings Management Using Benford's Law

Jordan, Charles E.; Clark, Stanley J.
February 2011
CPA Journal;Feb2011, Vol. 81 Issue 2, p32
Academic Journal
The article discusses the use of General Electric physicist Frank Benford's Benford's Law in detecting cosmetic earnings management (CEM) in companies. The definition of CEM is given and the method for testing the presence of CEM is described. Articles documenting the use of Benford's law in detecting fraudulent behavior are cited such as "Computer Assisted Techniques for Fraud Detection," by David Coderre and Paul Warner, published in "The CPA Journal."


Related Articles

  • Benford's Law and Fraud Detection. Lowe, Robert // Chartered Accountants Journal;Nov2000, Vol. 79 Issue 10, p32 

    Describes the technique developed by Frank Benford in the 1920s to predict the initial digits of any non-random series of numbers. Practical auditing applications of Benford's Law; Brief profile of Benford; Empirical evidence and the application of Benford's Law to fraud detection; Examples of...

  • Detecting Fraud Using Benford's Law. DIMM, WILLIAM C. // Criminal Justice;Summer2015, Vol. 30 Issue 2, p67 

    The article illustrates how an observation made by astronomer Simon Newcomb over a century ago can be used to identify numbers that have been fabricated for fraudulent purposes. Topics discussed include his hypothesis of the probability distribution for the leading digit of naturally occurring...

  • Identity Gift: The Opposite of Identity Theft? Luebben, Aimee J. // Online Classroom;Aug2006, p2 

    The article discusses the author's discovery of identity gift, the academic equivalent of the polar opposite of identity theft, when one of her students informed an Internet disconnection one weekend resulting to the other student's slipped an assignment before the due date. The situation has...

  • Keep it legal. Howarth, Nige // e.learning age;Jun2010, p16 

    The article discusses the use of electronic learning (e-learning) as a means to communicate fraud awareness in a company. Financial services provider and insurer Legal & General was facing the challenge of how to deliver a message about fraud awareness to its 8,500 employees across various...

  • Impact of computerization on Internal Control over Cash in Municipal Councils in Tanzania: A Case of Iringa Municipal Council. Minani, Isidore // Research Journal of Finance & Accounting; 

    Computerization of accounting systems is a relatively recent innovation. However, due to its advantage of processing a large volume of data at a high speed such as sorting, rearranging and performing arithmetic calculations with high accuracy, computerization or automated accounting has...

  • IBA FEATURED PRODUCTS AND PROGRAMS.  // Illinois Banker;Feb2009, Vol. 94 Issue 2, p12 

    The article offers updates on Illinois Bankers Association (IBA) featured products and programs. The IBA announces a new Preferred Vendor partnership with Office DEPOT. Fraud-NET offers a valuable resource for banking security professionals and law enforcement which reduce the affect of fraud to...

  • Signature Based Credentials, an Alternative Method for Validating Student Access in e-Learning Systems. Belo, Orlando; Monsanto, Paulo; Lourenço, AnĂ¡lia // Proceedings of the International Conference on e-Learning;2013, p24 

    e-Learning systems are today one of the most used tools in student's life. Every time a student uses an e-Learning system he initiates a pre-defined, and often implicit, set of clicks, which somewhat characterizes his interests. The navigation habits of students can be revealed easily through a...

  • Hazards of surgical training virtually eliminated. Decoster, Roy // All Hands;Jun96, Issue 950, p20 

    Reports on the use of virtual reality computer programs to teach surgery in the United States. Generation by Dr. Richard Rowe of the National Naval Medical Center of technology to generate virtual patients; Cost of computers capable of simulating surgery; Use of human body models.

  • In home studios, artists turn high-tech. Belsie, Laurent // Christian Science Monitor;3/9/95, Vol. 87 Issue 71, p12 

    Features the importance of computers and its tools in art. Increasing number of cases of artists switching to computers for digital painting; Various cases of artists accepting the trend; Low cost of computers as the biggest factor of growing digital art; Negative ratings of the digital art.


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics