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

question 43

Multiple Choice

One of the disadvantages of Benford's Law in detecting fraud is:

• A) potential suspects are more likely to know you are trying to detect fraud than if you didn't use such detection techniques.
• B) users must be thoroughly trained in its complexities to implement and use.
• C) that those cases with the lowest probabilities do not match Benford's Law and may need further investigation.
• D) it only broadly identifies the possible existence of fraud; it fails to narrow possibilities to a manageable field of promising leads.

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Definitions:

Line Of Credit

A flexible loan from a bank or financial institution that allows a borrower to draw down, repay, and reborrow funds up to a specified credit limit.

Leverage

The use of borrowed funds to increase one's investment capacity and potentially enhance the rate of return, also referring to influencing factors or the ability to influence outcomes.

Borrowing Money

The act of obtaining funds from lenders under the agreement to repay with interest within a specified timeframe.

Increases Equity

An action or event that raises the value of an owner's shares in a company or property.