Frequencies of leading digits from IRS tax files are 152, 89, 63, 48, 39, 40, 28, 25,
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Frequencies of leading digits from IRS tax files are 152, 89, 63, 48, 39, 40, 28, 25, and 27 (corresponding to the leading digits of 1, 2, 3, 4, 5, 6, 7, 8, and 9, respectively, based on data from Mark Nigrini, who provides software for Benford data analysis). Using a 0.05 significance level, test for goodness-of-fit with Benford’s law. Does it appear that the tax entries are legitimate?
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To test for goodnessoffit with Benfords law we can use the chisquared test The chisquared test is a nonparametric test that compares the observed frequencies of a categorical variable to the expected ...View the full answer
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Related Book For
Mathematical Interest Theory
ISBN: 9781470465681
3rd Edition
Authors: Leslie Jane, James Daniel, Federer Vaaler
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