EconStor >
Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU) >
Lehrstuhl für Rechnungswesen und Prüfungswesen, Universität Erlangen-Nürnberg >
Working Papers in Accounting Valuation Auditing, FAU Erlangen-Nürnberg >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/55146
  
Title:Applying Benford's Law to individual financial reports: An empirical investigation on the basis of SEC XBRL filings PDF Logo
Authors:Henselmann, Klaus
Scherr, Elisabeth
Ditter, Dominik
Issue Date:2012
Series/Report no.:Working papers in accounting valuation auditing 2012-1
Abstract:This study examines whether investors could use Benford's Law as an aid in determining high-risk areas for investing within their process of decision-making. The business reporting standard XBRL offers the opportunity to easily extract and analyze a sufficient number of monetary items out of single annual reports for statistical analysis purposes. Using SEC XBRL filings of S&P 500 companies (Fiscal Year 2010), we derive first digit distributions for single companies and measure the deviation from the Benford distribution. On average, we find that for all monetary numbers that are contained in the examined XBRL reports, the first digit distribution follows Benford's Law. A firm and industry-specific analysis reveals the industry Financials as being most conspicuous. Taken together, the empirical results suggest that the application of Benford's Law to annual reports might be a useful analytical tool for investors.
Subjects:Benford's Law
XBRL
interactive data
SEC filings
financial statement analysis
forensic investing
Benford'sches Gesetz
SEC Veröffentlichungen
Bilanzanalyse
Bilanzfälschung
JEL:M40
C12
C46
C81
Document Type:Working Paper
Appears in Collections:Working Papers in Accounting Valuation Auditing, FAU Erlangen-Nürnberg

Files in This Item:
File Description SizeFormat
684778548.pdf2,98 MBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/55146

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.