A Benford's law based method for fraud detection using R Library

ABSTRACT: Benford Law (BL) states that the occurrence of significant digits in many natural and human phenomena data sets are not uniformly scattered, as one could naively expect, but follow a logarithmic-type distribution. Here, we present a method that consists of the use of BL analysis over first...

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Autores principales:	Caio da Silva Azevedo, Rodrigo Franco Gonçalves, Vagner Luiz Gava, Mauro de Mesquita Spinola
Formato:	article
Lenguaje:	EN
Publicado:	Elsevier 2021
Materias:	Benford's law Statistical antifraud analysis Anomaly detection Bolsa familia Social welfare programs Science Q
Acceso en línea:	https://doaj.org/article/84f53dd261614953bd806ffa00b212b5
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spelling	oai:doaj.org-article:84f53dd261614953bd806ffa00b212b52021-12-04T04:34:23ZA Benford's law based method for fraud detection using R Library2215-016110.1016/j.mex.2021.101575https://doaj.org/article/84f53dd261614953bd806ffa00b212b52021-01-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S2215016121003654https://doaj.org/toc/2215-0161ABSTRACT: Benford Law (BL) states that the occurrence of significant digits in many natural and human phenomena data sets are not uniformly scattered, as one could naively expect, but follow a logarithmic-type distribution. Here, we present a method that consists of the use of BL analysis over first and first-two digits, three statistical conformity tests – Z-statistics, Mean Absolute Deviation (MAD) and Chi-square (χ2) as well as the summation test which looks for excessively large numbers, having fraud detection as one of its application. We developed the method for fraud detection in the case of the Brazilian Bolsa Familia welfare program. In this case, we submitted four periods of Brazilian welfare program payments to the method with a dataset of 13,442,529 records. We provide a practical implementation of the method based on open-source R library released on a public repository. Furthermore, code implementation of the algorithm as well as datasets are freely available. Advantages of the algorithm are listed below:• The method was developed based on open source libraries• The technique is simple, rapid and ease of use• Easily applicable to other social welfare program auditingCaio da Silva AzevedoRodrigo Franco GonçalvesVagner Luiz GavaMauro de Mesquita SpinolaElsevierarticleBenford's lawStatistical antifraud analysisAnomaly detectionBolsa familiaSocial welfare programsScienceQENMethodsX, Vol 8, Iss , Pp 101575- (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Benford's law Statistical antifraud analysis Anomaly detection Bolsa familia Social welfare programs Science Q
spellingShingle	Benford's law Statistical antifraud analysis Anomaly detection Bolsa familia Social welfare programs Science Q Caio da Silva Azevedo Rodrigo Franco Gonçalves Vagner Luiz Gava Mauro de Mesquita Spinola A Benford's law based method for fraud detection using R Library
description	ABSTRACT: Benford Law (BL) states that the occurrence of significant digits in many natural and human phenomena data sets are not uniformly scattered, as one could naively expect, but follow a logarithmic-type distribution. Here, we present a method that consists of the use of BL analysis over first and first-two digits, three statistical conformity tests – Z-statistics, Mean Absolute Deviation (MAD) and Chi-square (χ2) as well as the summation test which looks for excessively large numbers, having fraud detection as one of its application. We developed the method for fraud detection in the case of the Brazilian Bolsa Familia welfare program. In this case, we submitted four periods of Brazilian welfare program payments to the method with a dataset of 13,442,529 records. We provide a practical implementation of the method based on open-source R library released on a public repository. Furthermore, code implementation of the algorithm as well as datasets are freely available. Advantages of the algorithm are listed below:• The method was developed based on open source libraries• The technique is simple, rapid and ease of use• Easily applicable to other social welfare program auditing
format	article
author	Caio da Silva Azevedo Rodrigo Franco Gonçalves Vagner Luiz Gava Mauro de Mesquita Spinola
author_facet	Caio da Silva Azevedo Rodrigo Franco Gonçalves Vagner Luiz Gava Mauro de Mesquita Spinola
author_sort	Caio da Silva Azevedo
title	A Benford's law based method for fraud detection using R Library
title_short	A Benford's law based method for fraud detection using R Library
title_full	A Benford's law based method for fraud detection using R Library
title_fullStr	A Benford's law based method for fraud detection using R Library
title_full_unstemmed	A Benford's law based method for fraud detection using R Library
title_sort	benford's law based method for fraud detection using r library
publisher	Elsevier
publishDate	2021
url	https://doaj.org/article/84f53dd261614953bd806ffa00b212b5
work_keys_str_mv	AT caiodasilvaazevedo abenfordslawbasedmethodforfrauddetectionusingrlibrary AT rodrigofrancogoncalves abenfordslawbasedmethodforfrauddetectionusingrlibrary AT vagnerluizgava abenfordslawbasedmethodforfrauddetectionusingrlibrary AT maurodemesquitaspinola abenfordslawbasedmethodforfrauddetectionusingrlibrary AT caiodasilvaazevedo benfordslawbasedmethodforfrauddetectionusingrlibrary AT rodrigofrancogoncalves benfordslawbasedmethodforfrauddetectionusingrlibrary AT vagnerluizgava benfordslawbasedmethodforfrauddetectionusingrlibrary AT maurodemesquitaspinola benfordslawbasedmethodforfrauddetectionusingrlibrary
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A Benford's law based method for fraud detection using R Library

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