Do Analysts’ EPS Forecasts Obey Benford’s Law? An Empirical Analysis

  • Clarence Goh School of Accountancy, Singapore Management University, Singapore
Keywords: Benford’s law, earnings per share, forecasting


Benford’s law gives the expected frequencies of digits in tabulated data. In this study, I investigate the extent to which a sample of analysts’ earnings per share (EPS) forecasts obey Benford’s law. I conduct Benford’s law’s second digit and last-two digits tests on a sample of analyst EPS forecasts of S&P 500 firms from 1998 to 2018. Overall, I find that analysts’ EPS forecasts obey Benford’s law’s second digit test but do not obey the last-two digits test. These findings suggest that while analysts do not engage in number invention, they do engage in rounding when making EPS forecasts.


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How to Cite
Clarence Goh. (2022). Do Analysts’ EPS Forecasts Obey Benford’s Law? An Empirical Analysis. International Journal of Business and Society, 23(2), 773-785.