Accounting audit trail mandatory from April 1

Starting from 1st April 2023, the Ministry of Corporate Affairs (MCA) has made it mandatory for companies to maintain an audit trail for all their transactions. The new audit trail requirement introduced by the MCA is ahead of its time and is also an essential step towards greater transparency and accountability in business operations. Maintaining a detailed record of all transactions would help all stakeholders identify the source of the financial irregularities. Using these tools auditors and investigative agencies will ensure a more compliant financial reporting framework.

So, what exactly is an audit trail? An audit trail is a record of all the transactions in a company, including financial transactions, operational activities, and administrative tasks. It includes information about who initiated the transaction, when it was initiated, and the nature of the transaction. This information is recorded systematically and chronologically, making it easy to trace the history of any particular transaction.