Abstract
This study investigates the conformity to Benford’s Law of the information disclosed in financial statements. Using the first digit test of Benford’s Law, the study analyses the reliability of financial information provided by listed companies on an emerging capital market before and after the implementation of International Financial Reporting Standards (IFRS). The results of the study confirm the increase of reliability on the information disclosed in the financial statements after IFRS implementation. The study contributes to the existing literature by bringing new insights into the types of financial information that do not comply with Benford’s Law such as the amounts determined by estimates or by applying professional judgment.
Highlights
Are considered to be a set of high quality standards, we expect the reliability of information by International Financial Reporting Standards (IFRS) implementation to be higher than that obtained by applying national accounting regulations
Are considered a set of high quality standards at the international level, in order to verify if IFRS implementation increased the reliability of information disclosed in the balance sheets, data would be divided in two categories: before IFRS implementation and after
One of the main objectives of this study was to analyse if the transition to IFRS provided more reliable information than that obtained by applying national accounting regulations
Summary
Citation: Jianu, I.; Jianu, I. Reliability of Financial Information from the Perspective of Benford’s Law. Entropy2021, 23, 557. https://doi.org/10.3390/e23050557Academic Editor: Stanisław DrożdżReceived: 27 March 2021Accepted: 29 April 2021Published: 30 April 2021Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.Licensee MDPI, Basel, Switzerland.Attribution (CC BY) license (https://creativecommons.org/licenses/by/
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