Benford's Law (Noun)
Meaning
A law used by auditors to identify fictitious populations of numbers; applies to any population of numbers derived from other numbers; "Benford's law holds that 30% of the time the first non-zero digit of a derived number will be 1 and it will be 9 only 4.6% of the time".
Classification
Nouns denoting cognitive processes and contents.
Examples
- Auditors use Benford's law to detect anomalies in financial data that may indicate fraudulent activity.
- Benford's law is a statistical tool that can be applied to any set of numbers to identify patterns that are unlikely to occur naturally.
- The company's accountant was suspicious of the expense reports, so she used Benford's law to analyze the numbers and look for any irregularities.
- Researchers have found that Benford's law can be used to identify manipulated data in a wide range of fields, from finance to science.
- By applying Benford's law to the population of numbers, the auditor was able to identify a pattern that suggested the data had been falsified.