Course:
Data Analysis with Benford’s Law and Microsoft Excel
Description:
This course discusses a mathematical phenomenon known as Benford’s Law which provides formulas for the expected patterns of the digits in numerical data. The course reviews Benford’s law, requires you to download a data set from a government website, reviews how the digit patterns can be calculated and counted in Excel, shows how to graph your output, and discusses possible results from applications of Benford’s Law to corporate data.
Instructions
Read and study the written material and then analyze the prescribed data set using Excel. When you are comfortable with the material and you have done the computer work, complete the course exam.
Author: Mark J. Nigrini, Ph.D.
Author bio: Mark J. Nigrini, was formerly on the faculty at the Cox School of Business at Southern Methodist University where he taught undergraduate and graduate level auditing classes and a computer modeling class. He started his work with digital and number frequencies in 1989 when he saw the potential for auditors to use the expected digit patterns to test the authenticity of client data. In 1995 his work started receiving publicity and has been written about in forums such as The Wall Street Journal, The Globe and Mail, CA Magazine, The Financial Times, The New York Times, Business Week, and USA Today. Nigrini has published papers in academic journals such as The Journal of the American Taxation Association, Auditing: A Journal of Practice and Theory, and The Journal of Accounting Education, and in practitioner journals such as Internal Auditor, Journal of Accountancy, IT Audit Forum, The White Paper, and IEEE Potentials. He is the author of Digital Analysis Using Benford’s Law: Tests and Statistics for Auditors and Using Microsoft Access for Data Analysis and Interrogation.
Author Website: http://www.nigrini.com
Prerequisites: A basic knowledge of Excel functionality (Copy,
Paste, functions, cell-references etc.) and a basic knowledge of how to
download files from websites. No
advance preparation is required. If
your Excel skills are newly acquired, then the course may take longer than one
hour.
Course level: Basic – Covers fundamental principles and skills, This level is for participants with limited or no exposure to subject.
Field of Study: Accounting/Auditing
Instructional method: Interactive self-study.
Software/Hardware requirements:
Internet connection at 28.8-kbps or faster speed
Microsoft Excel 97 or higher
Learn about the discovery of Benford’s Law in the 1930s
Understand the mathematical assumptions underlying Benford’s calculations
Know when Benford’s Law should apply to a data set
Learn how to download a data set from the internet
Learn how to calculate digit frequencies in Microsoft Excel
Learn how to graph the output in Excel using a template supplied by the author
Understand how the digit frequency graphs might help auditors to assess the integrity of their data