Versatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee

Objective: Today, in the audit profession, identifying the factors affecting audit fee is of particular importance in terms of its impact on the quality of auditing and on the competitiveness of audit firms. The aim of this study is to examine the versatility of digits distribution of financial stat...

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Autores principales:	Mohammad Hossein Safarzadeh (Ph.D), Hossein Rezaei Namavar
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2020
Materias:	distribution of financial statements benford’s law audit fee Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/310dbbb62d49429fadc5d1e179e63467
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spelling	oai:doaj.org-article:310dbbb62d49429fadc5d1e179e634672021-11-04T19:55:28ZVersatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee2008-89142476-292X10.22103/jak.2020.13192.2865https://doaj.org/article/310dbbb62d49429fadc5d1e179e634672020-04-01T00:00:00Zhttps://jak.uk.ac.ir/article_2511_f0d657896204468e2a81ceb9834785b0.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XObjective: Today, in the audit profession, identifying the factors affecting audit fee is of particular importance in terms of its impact on the quality of auditing and on the competitiveness of audit firms. The aim of this study is to examine the versatility of digits distribution of financial statements with Benford’s law and its effect on audit fee. Method: To measure the variance of distribution of financial statement digits with Benford law, the scoring practice by Kolmogorov-Smirnov method was used. In this study, the data of 101 companies lidted in the Tehran Stock Exchange, TSE, in the period 2007 to 2017 were collected from Rahavard Novin software, financial statements and the official website of TSE. The research hypotheses were tested by multivariate regression model. Results: Findings showed that the score distribution of the initial digits of financial statements has a positive but non-significant effect on audit fee. Also, for the distribution of last digits of financial statements, a negative but non-significant effect on the audit fee was observred. In other words, the deviation from Benford distribution for the first and last digits of financial statements lacks positive and significant effect on audit Fee. Conclusion: Based on Banford law, auditors can limit the distribution of their investigation to the transactions that are suspicious and more likely to be fraudulent. Therefore, auditors can be more accurate in their estimates of the importance of distortion in audit program and audit pricing.Mohammad Hossein Safarzadeh (Ph.D)Hossein Rezaei NamavarShahid Bahonar University of Kermanarticledistribution of financial statementsbenford’s lawaudit feeAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 11, Iss 1, Pp 61-83 (2020)
institution	DOAJ
collection	DOAJ
language	FA
topic	distribution of financial statements benford’s law audit fee Accounting. Bookkeeping HF5601-5689
spellingShingle	distribution of financial statements benford’s law audit fee Accounting. Bookkeeping HF5601-5689 Mohammad Hossein Safarzadeh (Ph.D) Hossein Rezaei Namavar Versatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee
description	Objective: Today, in the audit profession, identifying the factors affecting audit fee is of particular importance in terms of its impact on the quality of auditing and on the competitiveness of audit firms. The aim of this study is to examine the versatility of digits distribution of financial statements with Benford’s law and its effect on audit fee. Method: To measure the variance of distribution of financial statement digits with Benford law, the scoring practice by Kolmogorov-Smirnov method was used. In this study, the data of 101 companies lidted in the Tehran Stock Exchange, TSE, in the period 2007 to 2017 were collected from Rahavard Novin software, financial statements and the official website of TSE. The research hypotheses were tested by multivariate regression model. Results: Findings showed that the score distribution of the initial digits of financial statements has a positive but non-significant effect on audit fee. Also, for the distribution of last digits of financial statements, a negative but non-significant effect on the audit fee was observred. In other words, the deviation from Benford distribution for the first and last digits of financial statements lacks positive and significant effect on audit Fee. Conclusion: Based on Banford law, auditors can limit the distribution of their investigation to the transactions that are suspicious and more likely to be fraudulent. Therefore, auditors can be more accurate in their estimates of the importance of distortion in audit program and audit pricing.
format	article
author	Mohammad Hossein Safarzadeh (Ph.D) Hossein Rezaei Namavar
author_facet	Mohammad Hossein Safarzadeh (Ph.D) Hossein Rezaei Namavar
author_sort	Mohammad Hossein Safarzadeh (Ph.D)
title	Versatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee
title_short	Versatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee
title_full	Versatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee
title_fullStr	Versatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee
title_full_unstemmed	Versatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee
title_sort	versatility of digits distribution of financial statements with benford’s law and its impact on audit fee
publisher	Shahid Bahonar University of Kerman
publishDate	2020
url	https://doaj.org/article/310dbbb62d49429fadc5d1e179e63467
work_keys_str_mv	AT mohammadhosseinsafarzadehphd versatilityofdigitsdistributionoffinancialstatementswithbenfordslawanditsimpactonauditfee AT hosseinrezaeinamavar versatilityofdigitsdistributionoffinancialstatementswithbenfordslawanditsimpactonauditfee
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Versatility of Digits Distribution of Financial Statements with Benford’s Law and Its Impact on Audit Fee

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