SINALING OF INCONSISTENCES FROM THE DECLARED PATRIMONY OF POLITICIANS IN BRAZIL: Application of Newcomb-Benford

Objective: to search evidence of inconsistencies or for possible fraud or other financial illicit acts in the assets declared by candidates for political office through the application of the Newcomb-Benford Law (NB). Background: research of a empirical nature is based on the ability of the information to be useful to analyze economic-financial facts, and too as on the ability of NB Law to signal potential deviations between the observed and expected distribution. Method: The work use NBL applies, in relation to the first digits of the values of the assets, comparing the observed distribution with the expected distribution from statistical tests and indicators (Nigrini, 2012). Second, discrepant digits are analyzed by the relevance of quantity and value deviations (Bugarin & Cunha, 2015). The application of the criteria indicated by NB and the deviation of averages allows to identify the items of declared goods potentially inconsistent. Results: The individualized first-digit analysis allowed us to identify six digits that differed from the expected distribution, two of which diverged more than expected. In detail, following the application of the methods, these items were identified as potentially possessing inconsistent first-digit values, including money declared in cash in foreign and domestic currency, considered to be typical goods used in money laundering. Contributions: The results of the research demonstrate the utility application the NB Law to the control organs in the search for evidence of assets with potentially inconsistent or fraudulent values and advances beyond the convergence statement to NB to reveal the divergent items within the sample.