Chi square test and Benford's law I have read that Chi square test is not correct technique for Benford's distribution.
Also, the chi-square test applies when both variables are categorical.
I am little confused if any or both of above statements are true and related? And if so, is it right to use chi sq test for Benford in Audit use cases?

As @whuber explained, the "problem" with use the chi-squared test to assess conformity to Benford's law is that it lacks statistical power. The discrete version of the Kolmogorov-Smirnov goodness-of-fit test (GOF) has better power. There are, however, other alternatives designed especially to test conformity to Benford's law See here for a wider discussion of the matter.
