Luhn Algorithm: A Little Known Tool for Auditors

Buying with Credit CardLuhn Algorithm also known as ‘modulus 10’ or ‘mod 10’ algorithm, was created by Hans Peter Luhn in 1954.
It is widely used in Credit/Debit card numbers, IMEI numbers, and Canadian Social Insurance numbers.

What is Luhn Algorithm?

To understand what Luhn algorithm is, we first need to understand what is ‘modulo’. Modulo or Modulus is the remainder after dividing the number with another number. Consider the example 7 divided by 3 has; quotient 2 and remainder 1.
Therefore, modulo 10 equal 0 means after dividing the number with 10, the remainder should be 0. In simple terms the number (dividend) should be a multiple of 10 (divisor).

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Beneish M-Score: Identifying Financial Statement Manipulations

Analyzing Financial DataAccording to the ACFE’s “Report to the Nation 2016” financial statement fraud occurred in less than 10% of the cases reported by the respondents. But it caused the highest median loss of $975,000. Asset misappropriation schemes was reported in more than 83% of the cases with median loss of $125,000. And Corruption cases fell in the middle with 35.4% of cases with median loss of $200,000. Several cases included schemes in more than one category.

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Investment Portfolio Tracker

We all invest in stocks and Mutual funds and tracking their performance sometimes becomes a problem.

So I found this wonderful tracker by Kyith on which is an excellent tool to keep track of your investments. Kyith has made a google spreadsheet for tracking the stocks. I have just converted that google spreadsheet into excel spreadsheet and added some functionalities and also removed certain features like cash register, dividend tracker (Which I didn’t required).

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Benford Law in Analyzing Accounting Data

Benford law named after physicist Frank Benford, also called first-digit law is an observation about the frequency distribution of leading digits in natural sets of numerical data.

Benford‘s Law states that many sets of numbers follow a predictable pattern, no matter what their origin or subject. The digit 1 will be the leading digit approximately 30% of the time. A leading digit is simply the left-most digit in a number (0 cannot be a leading digit). In fact, digits 1, 2, or 3 lead approximately 60% of the time. 9 as a leading digit appears only 4.5% of the time.

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