Application of Branford Analisys in detecting anomalies in the financial statements – case of Serbian large companies

The application of modern information systems in accounting significantly facilitated accounting control and planning. The use of techniques that allow rapid access to data, accurate data processing and providing reasonable assurance about the quality of the analyzed data will allow their users to create a competitive advantage over its competition. One of the most common technique for detecting anomalies and irregularities in accounting data is the Benford`s Law. Its purpose is to analyses patterns of digits in numbers sets. Benford`s Law explain frequency for each digits of numbers in normally distributed data. In order to implement analysis we use Audit Command Language (ACL). The aim of this paper is to provide an answer on main research issue: Is Benford`s Law good instrument to detect fraud in financial reports of Serbian companies? The results suggest that data of fixed assets reported in Serbian company’s financial statements do not deviate from Benford`s Law and it is proof that data are presented fairly. In contrast, data of profits/losses showed a deviation, which indicated the potential existence of fraud in the income statement.