Application Of Benford'S Law For Detecting Manipulation In The Financial Statements In Macedonian Companies

Financial statements are a key part of the accounting information system, through which communication is established between the information generated within the accounting and the various users of that information. The loss of consumer confidence in the information presented in the financial statements has major consequences for the financial market, and thus for the economy as a whole. It is therefore important to prevent making false financial statements. In many cases, due to inadequate authorization or lack of specific knowledge, auditors are unable to fully establish the existence of irregularities in the financial statements. Such situations, especially in terms of proving anomalies, require the hiring of specialists - forensic accountants and the application of appropriate analytical procedures, techniques and models. Such a model is Benford Law, which is a mathematical-statistical law used to detect anomalies in financial statements. Application of the Benford distribution is appropriate for accounting data because it forms a distribution that combines individual distributions. The purpose of this paper is to present a new paradigm for recognizing anomalies in accounting analytics and increasing the quality of financial statements, through the application of Benford’s law. Benford analysis in this paper will be realized on the data from the audited financial statements in the last 6 years in the company "Alkaloid" -Skopje in R. North Macedonia. This company is on the second position in the ten highest liquid companies on the Macedonian Stock Exchange. The existence of anomalies in the financial statements will be identified through three tests: z-statistics, MAD-Mean absolute deviation and x2 - test. Microsoft Excel will be used for data analysis.