You might think that if you looked at the first digit in randomly selected numbers that the distribution would be uniform. Actually, it is not! Simon Newcomb and later Frank Benford both discovered that the digits occur according to the following distribution: (digit, probability) (1, 0.301), (2, 0.176), (3, 0.125), (4, 0.097), (5, 0.079), (6, 0.067), (7, 0.058), (8, 0.051), (9, 0.046) The IRS currently uses Benford's Law to detect fraudulent tax data. Suppose you work for the IRS and are investigating an individual suspected of embezzling. The first digit of 150 checks to a supposed company are as follows: Digit 1 2 4 6 78 9 Observed 33 18 25 22 18 16 11 7 -0 Frequency a. State the appropriate null and alternative hypotheses for this test. b. Explain why a = 0.01 is an appropriate choice for the level of significance in this situation. c. What is the P-Value? Report answer to 4 decimal places P-Value = d. What is your decision? O Fail to reject the Null Hypothesis O Reject the Null Hypothesis

You might think that if you looked at the first digit in randomly selected numbers that the distribution would be uniform. Actually, it is not! Simon Newcomb and later Frank Benford both discovered that the digits occur according to the following distribution: (digit, probability) (1, 0.301), (2, 0.176), (3, 0.125), (4, 0.097), (5, 0.079), (6, 0.067), (7, 0.058), (8, 0.051), (9, 0.046) The IRS currently uses Benford's Law to detect fraudulent tax data. Suppose you work for the IRS and are investigating an individual suspected of embezzling. The first digit of 150 checks to a supposed company are as follows: Digit 1 2 4 6 78 9 Observed 33 18 25 22 18 16 11 7 -0 Frequency a. State the appropriate null and alternative hypotheses for this test. b. Explain why a = 0.01 is an appropriate choice for the level of significance in this situation. c. What is the P-Value? Report answer to 4 decimal places P-Value = d. What is your decision? O Fail to reject the Null Hypothesis O Reject the Null Hypothesis

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Concept explainers

Estimation

A new framework of data analysis where the new statistical methods are used for interpreting the results and analyzing the data is known as estimation in statistics.

Question

e. Write a statement to the law enforcement officials that will use it to decide whether to pursue the case
further or not. Structure your essay as follows:
Explain why a Goodness of Fit test should be applied in this situation.
Using your answers to parts c and d, make a conclusion about whether the individual is likely to have
embezzled, and then tell the law enforcement officials whether they should pursue the case or not.

You might think that if you looked at the first digit in randomly selected numbers that the distribution
would be uniform. Actually, it is not! Simon Newcomb and later Frank Benford both discovered that the
digits occur according to the following distribution: (digit, probability)
(1, 0.301), (2, 0.176), (3, 0.125), (4, 0.097), (5, 0.079), (6, 0.067), (7, 0.058), (8, 0.051), (9, 0.046)
The IRS currently uses Benford's Law to detect fraudulent tax data. Suppose you work for the IRS and are
investigating an individual suspected of embezzling. The first digit of 150 checks to a supposed company
are as follows:
Digit
2
4
7
Observed
33 18 25 22 18 16 11 7-0
Frequency
a. State the appropriate null and alternative hypotheses for this test.
b. Explain why a = 0.01 is an appropriate choice for the level of significance in this situation.
c. What is the P-Value? Report answer to 4 decimal places
P-Value =
d. What is your decision?
O Fail to reject the Null Hypothesis
O Reject the Null Hypothesis

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