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Review article
https://doi.org/10.3326/fintp.38.1.4

Statistical detection of fraud in the reporting of Croatian public companies

Siniša Slijepčević   ORCID icon orcid.org/0000-0001-5600-0171 ; University of Zagreb, Department of Mathematics, Zagreb, Croatia
Branimir Blašković ; University of Zagreb, Department of Mathematics, Zagreb, Croatia

Fulltext: english, pdf (396 KB) pages 81-96 downloads: 614* cite
APA 6th Edition
Slijepčević, S. & Blašković, B. (2014). Statistical detection of fraud in the reporting of Croatian public companies. Financial theory and practice, 38 (1), 81-96. https://doi.org/10.3326/fintp.38.1.4
MLA 8th Edition
Slijepčević, Siniša and Branimir Blašković. "Statistical detection of fraud in the reporting of Croatian public companies." Financial theory and practice, vol. 38, no. 1, 2014, pp. 81-96. https://doi.org/10.3326/fintp.38.1.4. Accessed 22 Jul. 2019.
Chicago 17th Edition
Slijepčević, Siniša and Branimir Blašković. "Statistical detection of fraud in the reporting of Croatian public companies." Financial theory and practice 38, no. 1 (2014): 81-96. https://doi.org/10.3326/fintp.38.1.4
Harvard
Slijepčević, S., and Blašković, B. (2014). 'Statistical detection of fraud in the reporting of Croatian public companies', Financial theory and practice, 38(1), pp. 81-96. https://doi.org/10.3326/fintp.38.1.4
Vancouver
Slijepčević S, Blašković B. Statistical detection of fraud in the reporting of Croatian public companies. Financial theory and practice [Internet]. 2014 [cited 2019 July 22];38(1):81-96. https://doi.org/10.3326/fintp.38.1.4
IEEE
S. Slijepčević and B. Blašković, "Statistical detection of fraud in the reporting of Croatian public companies", Financial theory and practice, vol.38, no. 1, pp. 81-96, 2014. [Online]. https://doi.org/10.3326/fintp.38.1.4

Abstracts
Statistical methods based on Benford’s distribution, Z- and χ2-statistics are being successfully applied to detect likely accounting and reporting fraud, for example in the daily usage of the Internal Revenue Service in the USA, and in historical analysis of Greek macroeconomic reporting. We adapt and apply the methodology to the analysis of the reporting of some leading Croatian public companies. We find indications of reporting fraud in several of the companies analyzed. In particular we find correlation between the likelihood of reporting fraud, measured as a deviation from Benford’s law, and reported net income losses, for companies large enough (with a revenue of at least 1 billion kuna). Finally, we suggest application of the methodology to improve the internal processes, efficiency and effectiveness of the State Auditing Office.
Data availability: The data used in the study are corporate data in the public domain. For legal reasons, however, the identities of the companies are disguised. Contact the first author for the sanitized data sets that can be used to verify and replicate the analysis.

Keywords
Benford’s law; public companies; reporting; fraud detection; auditing

Hrčak ID: 119740

URI
https://hrcak.srce.hr/119740

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