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Anecdotal evidence suggests that a significant portion of financial statement irregularities, whether created in error or to mislead, are ignored by reporting firms, their auditors, and the SEC. Motivated by a method used by forensic investigators and auditors to detect irregularities in a variety of settings, such as elections, tax return data, and individual financial accounts, we create a composite financial statement measure to estimate the degree of financial reporting irregularities for a given firm-year. The measure assesses the extent to which features of the distribution of a firm’s financial statement numbers diverge from a theoretical distribution posited by Benford’s Law, or the law of first digits. Whether in aggregate, by year, or by industry, we find that the empirical distribution of the numbers in firms’ financial reports generally conform to the theoretical distribution specified by Benford’s Law. In a battery of construct …