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Review article

USING DIGITAL FREQUENCIES TO DETECT ANOMALIES IN RECEIVABLES AND PAYABLES: AN ANALYSIS OF THE ITALIAN UNIVERSITIES

Fabio Ciaponi ; Department of Industrial and Information Engineering and Economics University of L’Aquila, Italy
Francesca Mandanici ; Department of Industrial and Information Engineering and Economics University of L’Aquila, Italy

Fulltext: english, pdf (908 KB) pages 86-108 downloads: 282* cite
APA 6th Edition
Ciaponi, F. & Mandanici, F. (2015). USING DIGITAL FREQUENCIES TO DETECT ANOMALIES IN RECEIVABLES AND PAYABLES: AN ANALYSIS OF THE ITALIAN UNIVERSITIES. Journal of economic and social developmen, 2 (1), 86-108. Retrieved from https://hrcak.srce.hr/135737
MLA 8th Edition
Ciaponi, Fabio and Francesca Mandanici. "USING DIGITAL FREQUENCIES TO DETECT ANOMALIES IN RECEIVABLES AND PAYABLES: AN ANALYSIS OF THE ITALIAN UNIVERSITIES." Journal of economic and social developmen, vol. 2, no. 1, 2015, pp. 86-108. https://hrcak.srce.hr/135737. Accessed 21 Oct. 2020.
Chicago 17th Edition
Ciaponi, Fabio and Francesca Mandanici. "USING DIGITAL FREQUENCIES TO DETECT ANOMALIES IN RECEIVABLES AND PAYABLES: AN ANALYSIS OF THE ITALIAN UNIVERSITIES." Journal of economic and social developmen 2, no. 1 (2015): 86-108. https://hrcak.srce.hr/135737
Harvard
Ciaponi, F., and Mandanici, F. (2015). 'USING DIGITAL FREQUENCIES TO DETECT ANOMALIES IN RECEIVABLES AND PAYABLES: AN ANALYSIS OF THE ITALIAN UNIVERSITIES', Journal of economic and social developmen, 2(1), pp. 86-108. Available at: https://hrcak.srce.hr/135737 (Accessed 21 October 2020)
Vancouver
Ciaponi F, Mandanici F. USING DIGITAL FREQUENCIES TO DETECT ANOMALIES IN RECEIVABLES AND PAYABLES: AN ANALYSIS OF THE ITALIAN UNIVERSITIES. Journal of economic and social developmen [Internet]. 2015 [cited 2020 October 21];2(1):86-108. Available from: https://hrcak.srce.hr/135737
IEEE
F. Ciaponi and F. Mandanici, "USING DIGITAL FREQUENCIES TO DETECT ANOMALIES IN RECEIVABLES AND PAYABLES: AN ANALYSIS OF THE ITALIAN UNIVERSITIES", Journal of economic and social developmen, vol.2, no. 1, pp. 86-108, 2015. [Online]. Available: https://hrcak.srce.hr/135737. [Accessed: 21 October 2020]

Abstracts
Motivation: The research aims at evaluating the anomalies and unusual patterns of accounting numbers reported by Italian universities. Prior literature and evidence on local authorities suggest that failing institutions may engage in fraudulent financial reporting to conceal their distress and avoid regulatory intervention. They
manipulate accounting values within the scope of the generally accepted accounting principles, using estimates and adjustments for achieving a desired result. Often, they overestimate the receivables and underestimate the payables in order to present a higher level of surplus or a minor deficit. Therefore, the research examines the receivables and payables values contained in the financial
reports of Italian universities during the years 2004-2012, hypothesizing that a gradual reduction of the ordinary funding from the Ministry, and the difficulty of attracting private resources, caused
financial stress and led management to accounting manipulations.
Object and methodology: We apply a mathematical law, known as Benford’s Law, to the receivables and payables reported values, obtained from the Statistical Office of the Ministry of Higher Education,
for identifying the existence of manipulated numbers.
Benford’s Law implies that, in a naturally occurring set of numbers, the leading digits of the numbers are discrete exponentially distributed rather than uniformly distributed, meaning that the numbers 1 through 9 do not have equal probability of occurring. In particular, the number 1 occurs as the leading digit about 30% of the time, while the number 9 occurs as the first digit less than 5% of the time. As Benford’s Law shows that there is some predictability in the distribution of the first digit in a series of data, it can be used to indicate the presence of fictitious or artificially manipulated numbers.
Results: Surprisingly, the statistical tests show a large degree of compliance between the observed and the expected distributions. The conformity is clear and persistent over all the 9 years.

Keywords
Benford’s Law; Italian univerisities; receivables and payables manipulations

Hrčak ID: 135737

URI
https://hrcak.srce.hr/135737

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