Modified Benford’s Law And Evaluation Of Accuracy For Financial Data From Listed Company In China

Developing direct financing is our long-term strategic task.According to China’s thirteenth five-year development planning,foster an open,transparent,and healthy capital market is one of the top priority.As a crucial part of capital markets,security market play a financial intermediation,capital pricing and resource allocation role in providing an important basis for economic analysis and macro-control.Financial fraud may mislead investors,increase market transaction costs,distort the price discovery function,and that is an issue,fraud force most participants to pay too much attention to the accuracy of the financial data provided by listed company.Benford’s law is broadly used in the field of accounting and auditing as a professional statistic method to analyze financial data efficiently.However,one assumption by which Benford’s law set is the data evaluated must not range within a limited scope,which is conflict with many data in real world.So this paper proposes a method to modifie Benford’s law by divide data set into two sets,get the each distribution law of the first digit and weighted sum the two in order to accord with the regularities of distribution of the original data set.Then use stochastic stimulation to compare the evaluation result and verify the superiority of the modified Benford’s law by frequency comparison and text result comparison.Fininally,base on the financial data of non-ST companies,author select main financial data of china’s listed company,describe and analyze conceptual data,layering data according to the source of financial statement and characteristic of financial indicator,evaluate the accuracy of financial data by using modified Benford’s law.