tag:blogger.com,1999:blog-19303585.post3328287481373689011..comments2019-06-07T23:00:27.316+00:00Comments on John Graham-Cumming: Running the numbers on the BBC executives expensesUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-19303585.post-40806826385487011952009-06-26T11:58:30.641+00:002009-06-26T11:58:30.641+00:00Quite impressive, you got to a stage where the con...Quite impressive, you got to a stage where the conclusions are _almost_ meaningful :)tjphttps://www.blogger.com/profile/12083964571676056519noreply@blogger.comtag:blogger.com,1999:blog-19303585.post-29263751528849809472009-06-26T10:37:52.575+00:002009-06-26T10:37:52.575+00:00Simon,
Benford's Law applies mostly to the fi...Simon,<br /><br />Benford's Law applies mostly to the first digit of numbers (although there are extensions to subsequent digits) so the endings shouldn't matter.<br /><br />VAT doesn't make a difference. Applying some mathematical function to a number (e.g. adding tax) doesn't affect the actual distribution.<br /><br />The biggest thing you'll see with expense claims is where employees hit a limit. Suppose I tell you you can spend up to £50 on lunch. We're unlikely to see many 1s because the limit skews the data.<br /><br />Recommended reading: The Effective Use of Benford's Law to Assist in Detecting Fraud in Accounting Data.<br /><br />http://www.rtedwards.com/journals/JFA/V-1/17.pdf<br /><br />John.John Graham-Cumminghttps://www.blogger.com/profile/12998100764952319513noreply@blogger.comtag:blogger.com,1999:blog-19303585.post-7916949643340551682009-06-26T10:25:20.897+00:002009-06-26T10:25:20.897+00:00Hi John,
Great blog entries; keep them comming. I...Hi John,<br /><br />Great blog entries; keep them comming. I found you via GRC.COM and the GRC Forums.<br /><br />On Benford's Law; how does this cope with prices for a wide range of goods and services often end with .95 or .99 (or .88 in Asia)?<br /><br />How does adding VAT (either 15% or 17.5%) affect Benford's Law?<br /><br />If I were filing expenses claims then I might expect to see more 8's and 9's above 10% of the time due to this pricing practice.<br /><br />Kind Regards<br /><br />Simon Zerafa<br />--Simon Zerafahttps://www.blogger.com/profile/05904134425293620714noreply@blogger.com