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I was recently reading an article about how financial accounting has increasingly deviated from the ratios expected by Benford's Law. (Benford's Law and Decreasing Reliability).

The author discusses the S&L crisis, but that's not enough to say that Benford's Law is a good predictor of performance. How reliable of a predictor is Benford's Law for anticipating crises or even for company failure on a case by case basis? If you could cite specific examples from history, that would be great.


migrated to quant.stackexchange.com by Turukawa May 2 '12 at 20:39

This question belongs on our site for finance professionals and academics.

Completely random but - the applications of Benford's Law and the law itself blow my mind. –  Zermelo Nov 14 '11 at 22:08

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