Audit Objective pr-17

Date of birth (over 16, under 65)

Step 1

Benford's Law

Using the main form, select the 'Benford's Law' function in order to quantify the extent to which amounts conform with that expected using Benford's law. Benford's Law can be used to identify amounts which have been made up. For example, amounts on tax return schedules, inventory counts, polling results should follow specific numeric patterns unless there are arbitrary constraints on their values All amounts may be tested using a variety of criteria such as first digit, first two digits, last digit, second digit etc. This technique can also be applied to identify circumvention of controls.

An example is purchase order limits of expense report ceiling amounts. There is a complete description of the procedure available for viewing.

Output from the process will be available in two formats:

1. As a report file (text format)
2. As a chart to visualize how numbers conform with Benford's Law.

The Benford's Law report may be loaded into Excel for for further analysis or sorting.

Also, there is a separate process to determine determine if conformity with benford's law is significantly better than in some accounts or locations, etc. There is a complete description of this procedure.





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