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Maintaining books of accounts is the key to seamless operations in the business world. In an effort to make business procedures transparent, the Ministry of Corporate Affairs (MCA), in its latest amendment, has mandated companies that use books of accounts to have the audit trail (edit log) feature.
According to the recent notification, the new audit trail rule in accounting software will now be implemented from 1st April,2023. This was originally planned for 2021 and but later the effective date was moved to 1st April,2022. Now, it is postponed to 1st April, 2023.
Essentially, the audit trail feature would create an edit log of every change made in the books of accounts with each change's date log. This would enable companies to track all the events such as modification, deletes etc. for every financial transaction, thereby enabling optimum business operation by bringing in transparency and reducing data manipulation. Additionally, the audit trail (edit log) feature shouldn't be disabled.
Here are some of the immediate business impacts and critical features that you should be aware of while choosing accounting software:
|Key Requirements of Audit Trail (Edit Log) Rule||The Business Impact of Audit Trail (Edit Log) Rule|
|Audit Trail (edit log) features of TallyPrime Edit Log Release 2.1|
As the deployment of the new feature approaches soon, businesses would have to understand some key features that their accounting software should have to remain compliant with the new audit trail feature. In light of the same, here are some of the key features that your accounting software should have:
One of the critical features to remain compliant with the audit trail (edit log) feature is having the time and date log within the accounting software. According to the latest amendment, the accounting software should keep records of all the edits being made in the books of accounts and shouldn't be disabled.
While the scope of keeping a tab of all the activities done within a transaction is ensuring business transparency, another crucial feature of the accounting software should be able to track and log all changes conducted – right from creation, alteration, to deletion of data within each transaction.
To remain compliant with the new rule, it is critical to ensure that the audit trail feature should be enabled all time.
Don't confuse audit log with software logging. While opting for accounting software, it is critical to note that accounting software should have a separate log. Thus being aware of the changes is crucial in selecting the right accounting software for your business.
Having insights into user details of each change within an edit log is critical to keep business processes transparent. Thus, ensure that your accounting software can capture user information right from creation to alteration to deletion of data within each financial transaction.
Another key factor that you should consider while choosing the right accounting software is that it should provide you with user versions. This would help you get a clear picture of all the changes made. Additionally, it should also provide you with version differences that would aid in understanding various elements like modifications or any changes that were made.
The purpose of the audit trail rule is to increase business efficiency. That's why opting for accounting software that provides detailed insight into chronological history by date and time is crucial to increase business efficiency.
The latest release 'TallyPrime Edit Log Release 2.1', is enhanced with the edit log feature that caters to the amendment released by the Ministry of Corporate Affairs (MCA). Following are the features of TallyPrime edit log release:
Read more about audit trail
Audit Trail – Meaning & Examples, Why do We Need an Audit Trail (Edit Log) for Businesses, How to Prepare your Business for Audit Trail (Edit Log) Rule, Audit Trail – Edit Log the New Statutory Watch Guard for Businesses, How Audit Trail (Edit log) can Lead to Increased Compliance and Transparency
Audit trail rule
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