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Benford’s Law states that most phenomena in nature begin with ‘1’s and

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Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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New post 08 Aug 2015, 09:26
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Benford’s Law states that most phenomena in nature begin with ‘1’s and ‘2s’. The law has been shown to apply very accurately to the amount of money listed on people’s income statements. Investigators have used this fact when investigating financial fraud, and can often determine when people have fabricated numbers, since the perpetrators will choose varying amounts so that the first number in each of those amounts is distributed evenly from ‘1’ to ‘9’. Proponents of Benford’s Law, therefore, argue that as the technique of applying Benford’s law becomes even more refined, an expert’s ability to determine whether a plaintiff has engaged in financial fraud will become as accurate in determining guilt as a fingerprint is today.

Which of the following, if true, casts the most doubt on the conclusion drawn by proponents of Benford’s Law?

A) In one financial fraud case, the numbers in which the amount was stated was not distributed evenly across ‘1’s and ‘9’s.
B) The use of fingerprinting is highly sophisticated since it has had over a century to evolve as a technology.
C) Benford’sLaw, after being used in several notable cases, has become highly publicized and intimately known to many likely to commit such crimes.
D) Benford’sLaw is not as accurate for numbers with fewer than six digits, though many fabricated numbers are for sums less than 100,000.
E) In the last year, several instances of financial fraud were discovered using other means besides Benford’s Law.
[Reveal] Spoiler: OA

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Re: Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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New post 08 Aug 2015, 23:45
A couple of brief notes on this question.

First of all, too wordy.
Secondly, redundant . My feeling

plaintiff has engaged in financial fraud will become as accurate in determining guilt as a fingerprint is today.

C Benford’sLaw, after being used in several notable cases, has become highly publicized and intimately known to many likely to commit such crimes.

The other options are really far away. A good question has at least two close and tempted options. Not here

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Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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New post 07 Mar 2016, 16:07
This was a weird question to me in several ways:

1. Why do we want to accuse the plaintiff? instead of the defendant?
2. Most people consider 'C' the right answer, but the technique of determining finger prints was well known for centuries and stills considered to be accurate, so why being publicized would weaken Benford's Law? I noticed people saying one could forger number against the technique, but again what makes it valid to claim numbers are easier to forger than human finger prints? even if they are, it would be external knowledge that GMAT rejects.
3. In the original explanation, 'D' was assessed as within the consideration of 'as the technique of applying Benford’s law becomes even more refined' part of original question, but if it is the problem rooted in the law itself, as stated in the answer choice 'D', how can a technique of applying the law improve the situation?

Despite the awkwardness I've had in the question itself, D appears to me to be the more correct choice than C, please refute.
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Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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New post 12 Apr 2016, 09:41
miushock wrote:
This was a weird question to me in several ways:

1. Why do we want to accuse the plaintiff? instead of the defendant?
2. Most people consider 'C' the right answer, but the technique of determining finger prints was well known for centuries and stills considered to be accurate, so why being publicized would weaken Benford's Law? I noticed people saying one could forger number against the technique, but again what makes it valid to claim numbers are easier to forger than human finger prints? even if they are, it would be external knowledge that GMAT rejects.
3. In the original explanation, 'D' was assessed as within the consideration of 'as the technique of applying Benford’s law becomes even more refined' part of original question, but if it is the problem rooted in the law itself, as stated in the answer choice 'D', how can a technique of applying the law improve the situation?

Despite the awkwardness I've had in the question itself, D appears to me to be the more correct choice than C, please refute.


IMO ,option D states that fabrication happens for sums less than 100,000. But the fabricated sums themselves may not be less than 100,000.
So in this case we cannot say for sure that this law wont work.

C on the other hand tells us that fabricators know this law in and out and can use that to bend around it.
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Re: Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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New post 19 Oct 2016, 04:03
any expert can explain further for B?
I am not sure whether my reasoning is valid,

genuinely want your explanation, thanks in advance

Quote:
B) The use of fingerprinting is highly sophisticated since it has had over a century to evolve as a technology

another approach way, fingerprint, no matter how fingerprint sophisticate , it is no impact on B's Law , so it is no impact on conclusion.

thanks a lot
have a nice day
>_~
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Re: Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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New post 20 Oct 2016, 13:28
hi Harley1980,

can you please explain how C is right option.
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Re: Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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Conclusion: Since Benford's Law can be used to determine fabrication, it is used by investigators to detect fraud.
We are tasked to find something that weakens the usefulness of Benford's Law in detecting fabrication.

A) In one financial fraud case, the numbers in which the amount was stated was not distributed evenly across ‘1’s and ‘9’s.
It is illogical to extrapolate ONE case for OTHER financial fraud cases. It is like saying because this one weird fish has one eye, it also means the rest of the fish in the pond has one eye.

B) The use of fingerprinting is highly sophisticated since it has had over a century to evolve as a technology.
Fingerprinting is used as a description to how well Benford's Law has been working for the investigators, thus this is is a shell game answer. It in no ways attack the conclusion and does not undermine the usefulness of Benford's Law

C) Benford’sLaw, after being used in several notable cases, has become highly publicized and intimately known to many likely to commit such crimes.
Bingo. If criminals are now more aware that using number ones and twos frequently will lead them to being caught then they can do something different about it. Thus, this will render Benford's Law and the conclusion useless.

D) Benford’sLaw is not as accurate for numbers with fewer than six digits, though many fabricated numbers are for sums less than 100,000.
Even if it is the case for fewer than six digits, the case for more than six digits can hold true. This answer partially undermines the conclusion but not as much as C IMHO.

E) In the last year, several instances of financial fraud were discovered using other means besides Benford’s Law.
This does not mean that Benford's Law is not useful. Discovering other means does not make Benford's law ability to detect fraud disappear.

Hope this helps!
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Re: Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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New post 11 Jan 2018, 11:11
Only C and D are two candidates for the answer b/c both sound most plausible. Nevertheless, D has shifted the scope, so let's take D out and shoot it !
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Re: Benford’s Law states that most phenomena in nature begin with ‘1’s and [#permalink]

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New post 01 Feb 2018, 08:42
Only C and D are contenders.

But Conclusion says that In future the more refined B-Law can determine fraud as accurately as fingerprint.
So what if at present it is difficult for less than 100 , 000. If refined properly it can overcome it.

Answer is C.
Re: Benford’s Law states that most phenomena in nature begin with ‘1’s and   [#permalink] 01 Feb 2018, 08:42
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