One of the major disadvantages of Benford's law in detecting fraud is:
A) You know exactly what you are looking for.
B) It is a fairly expensive method to use.
C) You have enormous amounts of information to sift through.
D) It only broadly identifies the possible existence of fraud and can include non-fraud factors.

Question

Quizplus · Accepted Answer

A: With benford's law you don't plan ahead and know the symptoms you are looking for. you don't have any idea of the kinds of frauds that could be occurring; you are just hunting for fraud using the shotgun approach. this approach entails pulling the trigger and hoping that a few pellets hit something important.
B: Benford's law is the least expensive method to implement and use. this is one of the major advantages of benford's law. it is also inexpensive because you aren't querying the data and analyzing it.
C: Generally you can only use benford's law on certain items, such as invoices or credit memos. if you are using acl, the response gives you enormous amounts of information that you have to analyze, and the information identifies thousands of red flags; however, this load of information occurs with the use of data-mining software and not benford's law.

One of the Major Disadvantages of Benford's Law in Detecting