Playing with Benford's Law

Abstract

This paper presents a classroom experiment, the simulations, and a research which familiarize the students with the Benford's Law. This law is widely used in a tax fraud detecting procedures. This paper shows that: i) the Benford's Law can be useful in extending the simple perception of the probability which is presented at the lectures concerning the risk, ii) can be an excellent example of using data processing for the classroom tasks, iii) by the experience of the fraud detecting technique the students might change their attitude to cheating. The experiment and the prepared R codes can be used in the numerous courses, such as accounting, applied microeconomics, and quantitative methods.