A Survey on Benford Law in Tehran Stock Exchange



Competitiveness and availability of transparent information are necessary in capital market. Information quality effects decision making and causes better resource allocation, which in turn leads to efficiency. Information transparency results in long term vision, reaching to new sources of capital, lower cost of capital, accountable management and finally, increasing of the shareholders, wealth. This project investigated Benford’s Law as an indicator of data quality in Tehran Stock Exchange. The data used in this research included the first digit of daily close price and indexes .The study period was from the beginning of 1999 to the end of 2009.The top 25 percent of companies with regard to trading days were selected as a sample of the research. Kolmogorove-smirnov’s and Goodness of Fit tests were used to estimate the model.The results showed that the investigated data was inconsistent with Benford’s Law.