Digital Frequency Testing (DFT) is a simple and potentially effective tool that can be used efficiently in the certification audit as well as in the service of forensic investigations to rationalize the use of extended audit procedures at the substantive phase of the audit. To further the hegemony of DFT, this paper summarizes certain aspects of the excellent treatment of DFT offered by Reddy and Sebastin (2012). In the following, the paper takes up the development of a Benford Screening Window (BSW) that can be employed to create alerts as to when datasets under audit examination do not seem to conform to the DFT profile as corrected from the Benford (1938) paper. The BSW is tested vis-à-vis the log10expectation function, two accounting industry datasets downloaded from COMPUSTATTM, and the 12 years of in-kind committee contributions dataset developed by Reddy and Sebastin (2012). The paper finds a reasonable fit for these datasets for the BSW and hence suggests an overall calibration cut-off taken from the results obtained by passing the Reddy-Sebastin datasets through the BSW. In this paper, the authors have programmed an ExcelTMVBA driven Decision Support System (DSS) to aid in the creation of these audit alerts which is available for free as a download with no restriction on its use.

Digital Frequency Testing (DFT) is a simple and potentially effective tool that can be used efficiently in certification audit as well as in the service of forensic investigations to rationalize the use of extended audit procedures at the substantive phase of the audit. Reddy and Sebastin (2012), in their study—“Entropic Analysis in Financial Forensics”—have offered an excellent treatment of DFT. Their study is, without doubt, a standard reading in auditing and assurance courses. This is to say that their work represents the important blend of academics and application that gives credential validity to their treatment of forensic testing as it relates to the audit context.

Commenting on the nature of the study by Reddy and Sebastin (2012), in the present paper we derive a practical screening window from corrections that we made to the Benford dataset that can be used to create possible audit alert information to aid in the decision regarding the use of extended audit procedures at the substantive testing phase. The Appendix offers the discussion of a Decision Support System (DSS) that we have created to facilitate the creation of the requisite audit alert information.

Accounting Research and Audit Practices, Digital Frequency Testing (DFT), Benford Screening Window (BSW), Decision Support System (DSS), Benford Datasets, Reddy, Sebastin Results, Form, Audit Alert Screening Heuristic.