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If the average Benford's law value of a population of sales transactions is 11%, which of the following is most likely to be suspicious?

a.An employee whose sales transactions average 4% using Benford's Law
b.An employee whose sales transactions average 18% using Benford's Law

User Haozhun
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Final answer:

The employee with an average of 18% for sales transactions using Benford's Law is more suspicious than one with 4% when the population average is 11%, as a higher deviation from Benford's distribution is generally more indicative of irregularities.

Step-by-step explanation:

If the average Benford's law value of a population of sales transactions is 11%, the employee whose sales transactions average 4% using Benford's Law is probably less suspicious compared to the one whose transactions average 18%. Benford's Law indicates that in many naturally occurring collections of numbers, the leading digit is likely to be small. According to Benford's Law, the number 1 should appear as the leading digit about 30.1% of the time, with percentages decreasing for larger numbers. If an employee's transactions conform to the expected Benford's Law distribution and the average is close to 11%, a significant deviation, such as 4%, would raise some suspicion. However, an average of 18% is suspiciously higher and deviates more from the mean, likely indicating that the sales transactions of this employee should warrant a closer look for potential anomalies or irregularities.

User Brian Peacock
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