Which of the following proactive fraud detection methods use Benford's Law to detect fraud?
A) Vertical analysis
B) Digital analysis
C) Real-time analysis
D) Time trend analysis

Question

Quizplus · Accepted Answer

Digital analysis uses Benford's Law to detect fraud by analyzing the first digits of numerical data to determine if they conform to expected patterns. Vertical analysis compares line items on financial statements over time or against industry averages. Real-time analysis and time trend analysis both involve monitoring financial transactions in real-time to identify anomalies, but do not necessarily use Benford's Law as a detection method.

Which of the Following Proactive Fraud Detection Methods Use Benford's