700 / 762
700
Chapter 15: Chi-Square Tests
Figure 15-31:
Rejection Region for
Example 15-7
Benford’s Law has been used as a method of detecting fraudulent
accounting data by looking at the first significant digit of each data entry
and comparing the actual frequency of occurrence with the predicted or
expected frequency. Most white collar criminals are unaware of
Benford’s Law and usually will use each digit about 10 percent of the
time.
Example 15-8:
Students who attend college and apply for student loans
must submit a FAFSA (Free Application for Federal Student Aid) form.
Part of the information that is required is the annual income of the parent
or parents. A sample of 3,633 forms was sampled from a particular
college and the proportions, to three decimal places, of the leading digits
for the total annual income as reported by the parents were recorded.
This information is presented in
Table 15-15
.