Fact and Fiction in EU-Governmental Economic Data

German Economic Review

Volumn 12, Issue 3, 2011, Pages 243-255

  Rauch, Bernhard ^a   Göttsche, Max ^a   Brähler, Gernot ^b   Engel, Stefan ^c  

^a UNIVERSITY OF REGENSBURG   (Germany)

^b ILMENAU UNIVERSITY OF TECHNOLOGY   (Germany)

^c CATHOLIC UNIVERSITY OF EICHSTÄTT INGOLSTADT   (Germany)

Author keywords

Auditing; Benford's law; Fraud detection; Government statistics

Indexed keywords

EUROPEAN UNION; FINANCIAL SYSTEM; GOVERNMENT; MACROECONOMICS; STATISTICAL ANALYSIS;

GREECE;

EID: 79959929594     PISSN: 14656485     EISSN: 14680475     Source Type: Journal    
DOI: 10.1111/j.1468-0475.2011.00542.x     Document Type: Review

References (43)

1. Bauer, J. and J. Gross (2010), Difficulties Detecting Fraud? The Use of Benford's Law on Regression Tables, Institute of Sociology, Ludwig-Maximilians-Universität München, Germany.
2. Benford, F. (1938), 'The Law of Anomalous Numbers', Proceedings of the American Philosophical Society 78, 551-572.
3. Boyle, J. (1994), 'An Application of Fourier Series to the most Significant Digit Problem', American Mathematical Monthly 101, 879-886.
4. Busta, B. and R. Weinberg (1998), 'Using Benford's Law and Neural Networks as a Review Procedure', Managerial Auditing Journal 13, 356-366.
5. Carslaw, C. A. P. (1988), 'Anomalies in Income Numbers: Evidence of Goal Oriented Behaviour', Accounting Review 63, 321-327.
6. Cho, W. K. T. and B. J. Gaines (2007), 'Breaking the (Benford) Law: Statistical Fraud Detection in Campaign Finance', American Statistician 61, 218-223.
7. Diekmann, A. (2007), 'Not the First Digit! Using Benford's Law to Detect Fraudulent Scientific Data', Journal of Applied Statistics 34, 321-329.
8. Diekmann, A. and B. Jann (2010), 'Benford's Law and Fraud Detection: Facts and Legends', German Economic Review 11, 397-401.
9. Durtschi, C., W. Hillison and C. Pacini (2004), 'The Effective Use of Benford's Law to Assist in Detecting Fraud in Accounting Data', Journal of Forensic Accounting 5, 17-34.
10. Ettredge, M. L. and R. Srivastava (1999), 'Using Digital Analysis to Enhance Data Integrity', Issues in Accounting Education 14, 675-690.
11. European Commission (2004), 'Report by Eurostat on the Revision of the Greek Government Deficit and Debt Figures', available at [state of 2010/07/13].
12. European Commission (2010a), 'Report on Greek Government Deficit and Debt Statistics', available at [state of 2010/07/13].
13. European Commission (2010b), 'Proposal for a Council Regulation (EU) No .../.... amending Regulation (EC) No 479/2009 as Regards the Quality of Statistical Data in the Context of the Excessive Deficit Procedure', available at [state of 2010/07/26].
14. European Commission (2010c), 'Report from the Commission, Convergence Report 2010', available at [state of 2010/08/06].
15. Eurostat (2003), 'European Data Quality Definition', available at
16. Gonzales-Garcia, J. and G. Pastor (2009), 'Benford's Law and Macroeconomic Data Quality', International Monetary Fund, Working Paper, available at
17. Guan, L., D. He and D. Yang (2006), 'Auditing, Integral Approach to Quarterly Reporting, and Cosmetic Earnings Management', Managerial Auditing Journal 21, 569-581.
18. Günnel, S. and K.-H. Tödter (2009), 'Does Benford's Law Hold in Economic Research and Forecasting?', Empirica 36, 273-292.
19. Hill, T. P. (1995a), 'A Statistical Derivation of the Significant-Digit Law', Statistical Science 10, 354-363.
20. Hill, T. P. (1995b), 'Base-Invariance Implies Benford's Law', Proceedings of the American Mathematical Society 123, 887-895.
21. Hill, T. P. (1999), 'The Difficulty of Faking Data', Chance 12, 27-31.
22. Judge, G. and L. Schechter (2009), 'Detecting Problems in Survey Data using Benford's Law', Journal of Human Resources 44, 1-24.
23. Kinnunen, J. and M. Koskela (2003), 'Who is Miss World in Cosmetic Earnings Management? A Cross-National Comparison of Small Upward Rounding of Net Income Numbers among Eighteen Countries', Journal of International Accounting Research 2, 39-68.
24. Krämer, W. (2010), 'The Cult of Statistical Significance', SFB 823, Discussion Paper No. 44/2010.
25. Leemis, L. M., B. W. Schmeiser and D. Evans (2000), 'Survival Distributions Satisfying Benford's Law', American Statistician 54, 236-241.
26. Möller, M. (2009), 'Measuring the Quality of Auditing Services with the Help of Benford's Law - An Empirical Analysis and Discussion of this Methodical Approach', available at
27. Morrow, J. (2009), 'Benford's Law, Families of Distributions and a Test Basis', available at [state of 2010/07/20].
28. Newcomb, S. (1881), 'Note on the Frequency of Use of the Different Digits in Natural Numbers', American Journal of Mathematics 4, 39-40.
29. Nigrini, M. J. (1996), 'A Taxpayer Compliance Application of Benford's Law: Tests and Statistics for Auditors', Journal of the American Taxation Association 18, 72-91.
30. Nigrini, M. J. (2000), Digital Analysis Using Benford's Law, Vancouver, BC.
31. Nigrini, M. J. (2005), 'An Assessment of the Change in the Incidence of Earnings Management around the Enron-Andersen Episode', Review of Accounting and Finance 4, 92-110.
32. Nigrini, M. J. and L. J. Mittermaier (1997), 'The Use of Benford's Law as an Aid in Analytical Procedures', Auditing A Journal of Practice and Theory 16, 52-67.
33. Niskanen, J. and M. Keloharju (2000), 'Earnings Cosmetics in a Tax-Driven Accounting Environment: Evidence from Finnish Public Firms', European Accounting Review 9, 443-452.
34. Nye, J. and C. Moul (2007), 'The Political Economy of Numbers: On the Application of Benford's Law to International Macroeconomic Statistics', B.E. Journal of Macroeconomics 7.
35. Pinkham, R. S. (1961), 'On the Distribution of First Significant Digits', Annals of Mathematical Statistics 32, 1223-1230.
36. Raimi, R. A. (1976), 'The First Digit Problem', American Mathematical Monthly 83, 521-538.
37. Schäfer, C., J.-P. Schräpler, K.-R. Müller and G. Wagner Gert (2005), 'Automatic Identification of Faked and Fraudulent Interviews in the German SOEP', Schmollers Jahrbuch 125, 183-193.
38. Skousen, C. J., L. Guan and T. S. Wetzel (2004), 'Anomalies and Unusual Patterns in Reported Earnings: Japanese Managers Round Earnings', Journal of International Financial Management and Accounting 15, 212-234.
39. Thomas, J. K. (1989), 'Unusual Patterns in Reported Earnings', Accounting Review 64, 773-787.
40. Tödter, K.-H. (2009), 'Benford's Law as an Indicator of Fraud in Economics', German Economic Review 10, 339-351.
41. Van Caneghem, T. (2002), 'Earnings Management Induced by Cognitive Reference Points', British Accounting Review 34, 167-178.
42. Van Caneghem, T. (2004), 'The Impact of Audit Quality on Earnings Rounding-Up Behaviour: Some UK Evidence', European Accounting Review 13, 771-786.
43. Watrin, C., R. Struffert and R. Ullmann (2008), 'Benford's Law: An Instrument for Selecting Tax Audit Targets?', Review of Managerial Science 2, 219-237.