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The Ministry of Corporate Affairs (MCA) recently issued a notification to amend the date on which the audit trail rule in accounting software to be mandated for companies.
According to the 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.
|5 Features to Evaluate Audit Trail Accounting Software|
According to the notification issued on 24th March, 2021, all the businesses who are using accounting software for maintaining books of accounts should have an audit trail feature comprising of the following:
Further, the rules state the edit log feature should have been operated throughout the year for all the transactions recorded in the software, the edit log feature has not been tampered with, and the edit log feature has been preserved by the company.
These amendments reflect a laudable intent of the government to bring in more transparency and improve compliance. Although at a conceptual and regulatory level, the requirement of audit trail is very important and apt, there were a few concerns that many associations, trade and industry bodies observed and raised with the ministry. These concerns emanated with respect to the operational areas of businesses and were highlighted to the ministry via representations made by these bodies:
The regulation needs to address these in the right manner so that businesses or CA are not affected or penalized for things like lack of technical expertise, lack of clear understanding, etc., Also, business owner/ auditor cannot be expected to be technologically enabled to detect hacking or tampering of the application.
Post the deferment of Audit Trail to 1st April, 2022, many trade associations along with software service providers have been working with the ministry to bring out a detailed version of the amendment. Tally has been driving many such discussions as the leading software product developer of the country.
Tally has been constantly interacting with the ministry, the trade associations and CA federation to collate and debrief the concerning aspects of the amendment. Thus far the ambiguous elements have slowly been defined, and market concerns and operational issues are being handled to meet the expectations of both business owners and the department.
The outcome from of these interactions can be seen in the market readiness for audit trail. Unlike 2021, now the business world and CA community are better placed to implement and manage Audit Trail in their accounting software.
The solutions designers from Tally, who were active participants in these dialogues have used their rich experience to design and shape TallyPrime to meet the requirements necessary for a successful implementation of edit log functionality. Being the mass market product that TallyPrime is, it should be flexible enough to meet the requirements of varied business segments, across various levels, and meet the security and speed parameters that is always expected from Tally.
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
Business Impact of Audit Trail (Edit Log) 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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