APPLICATION OF BENFORD'S LAW FOR DETECTING MANIPULATION IN THE FINANCIAL STATEMENTS IN MACEDONIAN COMPANIES

Dejan Zdraveski, DZ and Margarita Janeska, MJ (2021) APPLICATION OF BENFORD'S LAW FOR DETECTING MANIPULATION IN THE FINANCIAL STATEMENTS IN MACEDONIAN COMPANIES. Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series,, 6.

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Abstract

Financial statements are a key part of the accounting information system, through which communication is established
between the information generated within the accounting and the various users of that information. The loss of
consumer confidence in the information presented in the financial statements has major consequences for the financial
market, and thus for the economy as a whole. It is therefore important to prevent making false financial statements. In
many cases, due to inadequate authorization or lack of specific knowledge, auditors are unable to fully establish the
existence of irregularities in the financial statements. Such situations, especially in terms of proving anomalies, require
the hiring of specialists - forensic accountants and the application of appropriate analytical procedures, techniques
and models. Such a model is Benford Law, which is a mathematical-statistical law used to detect anomalies in financial
statements. Application of the Benford distribution is appropriate for accounting data because it forms a distribution
that combines individual distributions.
The purpose of this paper is to present a new paradigm for recognizing anomalies in accounting analytics and
increasing the quality of financial statements, through the application of Benford’s law. Benford analysis in this paper
will be realized on the data from the audited financial statements in the last 6 years in the company "Alkaloid" -Skopje
in R. North Macedonia. This company is on the second position in the ten highest liquid companies on the Macedonian
Stock Exchange. The existence of anomalies in the financial statements will be identified through three tests: zstatistics, MAD-Mean absolute deviation and
2

- test. Microsoft Excel will be used for data analysis

Item Type:	Article
Subjects:	Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions:	Faculty of Economics
Depositing User:	Mr Dimitar Risteski
Date Deposited:	10 Jul 2023 08:38
Last Modified:	10 Jul 2023 08:38
URI:	https://eprints.uklo.edu.mk/id/eprint/8486

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