Abstract
We propose the application of digit analysis using the Benford law to indicate managerial engagement in the capital allocation process. First, we motivate the potential of the Benford digit analysis to identify allocation outcomes that are shaped by human engagement instead of fixed decision rules. Second, we provide a case study to illustrate how the Benford digit analysis can be used to detect allocations affected by managerial interventions. We are unaware of any study applying the Benford test to internal capital markets, while this approach appears very useful in this context. It is commonly used in the auditing, financial accounting, and fraud detection literature.
Item Type: | Journal article |
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Faculties: | Munich School of Management > Institute for Capital Markets and Corporate Finance |
Subjects: | 300 Social sciences > 330 Economics |
ISSN: | 1465-6485 |
Language: | English |
Item ID: | 62808 |
Date Deposited: | 19. Jul 2019, 12:11 |
Last Modified: | 01. Dec 2023, 08:52 |