Get Ready: Audit trail feature in accounting software compulsory from 1st April 2022

Get Ready: Audit trail feature in accounting software compulsory from 1st April 2022

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Get Ready: Audit trail feature in accounting software compulsory from 1st April 2022

1. MCA by virtue of notification no. G.S.R. 205(E) dated 24th March 2021, requires the companies to comply with using the accounting software which has a feature of recording the audit trail of each and every transaction. This has been incorporated in the companies (accounts) Rules,2014 in proviso to rule 3(1)
2. An edit log of each change has to be made in books of account along with the date when such changes were made.
3. The date of applicability of such amendment was supposed to be 1st April, 2021 but had been deferred for one year and is now applicable from 1st April 2022.
4. 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.
5. 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.
6. Further, it is the responsibility of the auditor to comment on; whether all transaction entered by the company is being recorded in such software or not, and further whether the audit trail feature has been tampered with or not, and the company is preserving such audit trail or not.

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