Benford’s Law is one of the most underrated and widely used techniques that are commonly used in various applications. United States IRS neither confirms nor denies their use of Benford’s law to detect any number of manipulations in income tax filing. Across the Atlantic, the EU is very open and proudly claims its use of Benford’s law. Today, this is widely used in accounting to detect any fraud. Nigrini, a professor at the University of Cape Town, also used this law to identify financial discrepancies in Enron’s financial statement. In another case, Jennifer Golbeck, a professor at the University of Maryland, was able to identify bot accounts on twitter using Benford’s law. Xiaoyu Wang from the University of Winnipeg even published a report on how to use Benford’s law on images. In the rest of this article, we will take about Benford’s law and how it can be applied using R.
The applications to images and music were new to me. Very cool. H/T R-Bloggers