Blog updated on 5 April, 2022.
According to the latest notification issued by the Ministry of Corporate Affairs, the deadline for companies to start using accounting software with audit trail has been deferred by a year to April 1, 2023.
On March 24, 2021, the Ministry of Corporate Affairs issued a notification instructing companies using accounting software to choose software that can record an audit trail of every transaction that they carry out. According to the latest notification issued by the Ministry of Corporate Affairs, the deadline for companies to start using accounting software with audit trail has been extended from April 1, 2021 to April 1, 2022.
The key takeaway from this rule is that the accounting software that companies use to maintain their books must:
Include the ability to record an audit trail of every transaction that takes place
Create an edit log of each change happening in the books, along with the date and user details
Ensure that the audit trail cannot be disabled
To comply with the Government’s mandate, Zoho Books comes with audit trail feature for users in the Indian region. The audit trail in Zoho Books is part of the Activity reports in the Reports module of Zoho Books.
How does Zoho Books’ Audit trail feature work?
Zoho Books maintains a log of every change made to a record in the application, such as a contact, sales or purchase transaction, invoice or bill, journal, or even a setting. Along with the nature of the change, it also saves the timestamp and the details of the user who performed the action.
In short, the audit trail in Zoho Books provides details on the 4 Ws: when, where, what, and who.
When – The date and time an action was performed.
Where – The module under which the action was performed. This can be Invoices, Bills, Bank Feeds, Expenses, or any other module under Zoho Books.
What – A description of the action that was performed, such as creating an invoice, editing line items on the invoice, or updating the contents of a bill.
Who – The user who performed the action.
If a record is changed multiple times, the audit trail shows every version that has been created, not just the most recent. The user can compare multiple versions and track specific data that has been added, removed, or modified.
How does your business benefit from this feature?
Keeps you compliant with the standard law
Ensures end-to-end tracking of all transactions
Places effective internal control
Saves time during tax audits
A word from Zoho Books
The Government’s rule enforcing the use of audit trails for transactions recorded in accounting software is a positive step in curbing transaction fraud. While the rule is important, it is up to companies to choose the right software that offers this capability.
Zoho Books’ audit trails help companies stay compliant with the norms introduced by the Government to prevent unrecorded transactions and fraud. Read more on Zoho Books’ audit trail here.
Also, did you know that Zoho Books’ free plan for small businesses comes with audit trail as well? Well, now you do. Sign up for Zoho Books’ free plan, today!