Applications of the Newcomb-Benford law in the tax audit of the service tax (ISS)

Authors

  • Josenildo dos Santos Universidade Federal de Pernambuco; Departamento de Ciências Contábeis e Atuariais
  • José Francisco Ribeiro Filho Universidade Federal de Pernambuco; Departamento de Ciências Contábeis e Atuariais
  • Umbelina Lagioia Universidade Federal de Pernambuco; Departamento de Ciências Contábeis e Atuariais
  • Bartolomeu Figueiredo Alves Filho Universidade Federal de Pernambuco; Departamento de Ciências Contábeis e Atuariais
  • Ivson José Caldas de Araújo Universidade Federal de Pernambuco; Departamento de Ciências Contábeis e Atuariais

DOI:

https://doi.org/10.1590/S1519-70772009000100006

Keywords:

Newcomb-Benford Law, Accounting-fiscal auditing, Frauds

Abstract

This paper aimed to check if the quantitative accounting model based on the Newcomb-Benford Law (NB-law) is applicable to ISS tax auditing. For this purpose, the result of the quantitative accounting model was confronted with the result of the accounting-fiscal audit registered in the Final Fiscalization report elaborated by the tax authorities of a municipal government in a city in the Brazilian Northeast. A case study was carried out in a publicity company and the analysis period covers the receipts (NFs) issued between 2002 and 2005. For data collection, multiple sources of evidence were used within reach for the study objectives. As for data treatment, descriptive (position and dispersion measures) and inference statistics (hypothesis and significance test and correlation analysis) were used. The results of the case study evidenced the applicability of the model based on the NB-law for the ISS tax auditing process, because this signaled the possible deviations in the issuing and bookkeeping of the receipts, which were confirmed by the results of the fiscalization.

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Published

2009-04-01

Issue

Vol. 20 No. 49 (2009)

Section

Articles

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How to Cite

Santos, J. dos, Ribeiro Filho, J. F., Lagioia, U., Alves Filho, B. F., & Araújo, I. J. C. de. (2009). Applications of the Newcomb-Benford law in the tax audit of the service tax (ISS) . Revista Contabilidade & Finanças, 20(49), 63-78. https://doi.org/10.1590/S1519-70772009000100006