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The Ministry of Corporate Affairs (MCA) notified a rule mandating every business that uses accounting software to maintain their books of account to have an audit trail feature. The new rule mandates every company maintains a record and edit log of each transaction.
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
With audit rule notified, you might be having several concerns about the impact and implications of the audit trail rule on businesses. Is it applicable to all businesses? Is your existing accounting software compliant with the new rule? What are the penalties if it doesn’t adhere to the new audit trail (edit log) rule? Do you need to change how you have been operating all these years?
To answer that, the new amendment, which aims to bring transparency and accountability while restricting any data manipulation, will also enable better productivity for businesses.
|Businesses who Should Follow the Audit Trail (Edit Log) Rule|
Companies that fall under the purview of the MCA will be impacted by the new audit trail rule. Having said that, here’s a quick rundown of the impact the new audit trail rule will have on businesses:
The existing accounting software that companies are using to maintain their books of account should have the audit trail facility that would be able to log any changes that are done pertaining to any transactions.
Suppose the existing accounting software doesn’t have the audit trail facility or cannot enhance its capabilities within the software. In that case, companies will have to look for an alternative option to remain compliant with the new rule.
To ensure that businesses adhere to the new audit trial rule, their staff need to be enabled to tackle the change in the accounting software. They may have to bring in some degree of change in the way they are using the accounting software.
At this moment, the repercussions and penalties that companies may have to bear in case of non-compliance with the audit trail notification are not clear.
As per the new amendment, accounting software will be required to have the following features:
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, 5 Features to Look in Audit Trail (Edit Log) Accounting Software, 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
, Key Requirements of the Audit Trail (Edit Log) Rule Issued by MCA, Audit Trail Rule (Edit Log) Applicability – Businesses who Should Follow the Rule, How to Prepare your Business for Audit Trail (Edit Log) Rule
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