Benford's law
In many real collections of numbers spanning several orders of magnitude, the first digit is 1 about 30% of the time and 9 only about 4.6%.
In plain English
Amounts that grow by percentages spend longer starting with 1 than with 9: going from 100 to 200 takes a doubling, from 900 to 1,000 only 11%. So bills, populations and company accounts are full of 1s. People inventing numbers spread first digits evenly, which is why auditors use the pattern as a first screen. It needs hundreds of numbers over a wide range and doesn't apply to capped or assigned numbers.
Uncle Gary explains
Only 8% of Uncle Gary's receipts as allotment treasurer started with a 1. Several were written on beer mats.
Why it matters for your money
Accounting figures that stray far from the pattern can be a reason to read a company's numbers more carefully. It's a screen, never proof.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.