Which of the following is MOST important for an IS auditor to verify when reviewing the planned use of Benford’s law as a data analytics technique to detect fraud in a set of credit card transactions?
Which of the following is MOST important for an IS auditor to verify when reviewing the planned use of Benford’s law as a data analytics technique to detect fraud in a set of credit card transactions?
Benford’s Law is a statistical tool used to detect anomalies in datasets by analyzing the distribution of first digits. For it to be effective, the dataset must meet specific criteria. The most critical factor for an IS auditor to verify when applying Benford’s Law to credit card transactions is B. The transaction amounts are selected randomly without restriction.
The most important factor for an IS auditor to verify when reviewing the planned use of Benford’s law for fraud detection in credit card transactions is that all transactions are in the same currency (D). This ensures the dataset’s consistency, allowing the law to accurately identify anomalies indicative of fraud. Other conditions, such as random selection or avoiding analysis limitations, are relevant but secondary to this fundamental requirement.