A Benford's Law view of inspections' reasonability

Beyond offering room for methodological research, the assessment of data regularities has relevant implications for applications. In this respect, Benford's Law represents one of the key instruments to detect the presence of possible data manipulation. This paper contributes to this debate by dealing with the analysis of the labour inspections' reliability through an econophysic approach. Specifically, we check the validity of the Benford's Law for a large set of Italian firms' balance sheets and income statements, in both cases of firms inspected and not inspected by the National Institute of Social Security and for all the Italian regions. In so doing, we provide a panoramic view of the plausibility of the inspection activities at a regional and financial item level.