Audit Trail Feature in the Accounting Software Mandatory from April 1, 2022
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- Last Updated on 23 June, 2022
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In order to mitigate the chances of fraudulent transactions or manipulation in the books of accounts, MCA vide notification, requires the company to use the accounting software that has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled with effect from the financial year commencing on or after 1st April 2022.
The existence of such a feature in the accounting software will bring in more transparency in the disclosures of the annual report of a company. This will also bring Stress-free audit, easy error-correcting, and thereby saving time and also preventing fraud.
But with it, certain challenges may also come forth such as genuine errors corrected will always remain in logs and will increase the burden on the companies and auditors.
Also, with this amendment, the regulators are bringing out enhanced reporting from the company’s auditors.
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Dear Sir/Madam,
What about Inventory accounting ? Is it mandatory for quantity of input,production,sales & stock also require software that has a feature of recording audit trail of each and every transaction.
Kindly clarify
With effect from 01-04-2023, feature of recording Audit Trail is mandatory for maintaining Books of Account. In our view and referring to the definition of Books of Account, an audit trail feature should be mandatory for Inventory Accounting.