Audit Trail Feature in the Accounting Software for Companies | Management / Auditor's Responsibility
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- Опубликовано: 14 окт 2024
- Audit Trail Feature in the Accounting Software Mandatory for Companies | Management / Auditors Responsibilities on Mandatory Audit Trail Discussed by CA. (IP) Vivek Khurana.
MCA Notification on Audit Trail:-
According to Ministry of Company Affairs (MCA) notification dated March 24, 2021 (Companies (Accounts) Amendment Rules, 2021), for the financial year beginning on or after April 1, 2021,
Every company that uses accounting software to maintain its books of account shall use only Accounting Software that has a feature of recording an -
Audit Trail of each and every transaction,
Creating an edit log of each change made in books of account along with the date when such changes were made.
Ensuring that the audit trail cannot be disabled.
The MCA has later announced that the above amendments will take effect on April 1, 2023, which suggests that accounting software used by businesses will have to comply with the Accounts Rules beginning in the financial year 2023-24.
Audit Trail?
An audit trail is a sequence of recorded computer events that involves any activity around the operating system, applications or user actions. One computer can have several audit trails that each serve a different purpose.
An audit trail is a sequential record detailing the history and events related to a specific transaction or ledger entry.
Audit Trail Responsibility:-
Proviso to Rule 3(1) of Companies (Accounts) Rules, 2014
(Management Responsibility)
Rule 11(g) of Companies (Audit and Auditors) Rules, 2014
(Auditor’s Responsibility)
Rule 3(1) of Companies (Accounts) Rules:-
Proviso to Rule 3(1) of Companies (Accounts) Rules, 2014
Provided that for the financial year commencing on or after the 1st day of April 2023,
Every Company which uses accounting software for maintaining its books of account,
shall use only such accounting software which has a feature of recording audit trail of each and every transaction,
creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
Management’s Responsibility in Audit Trail:-
Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014
The management has a responsibility for effective implementation of the requirements prescribed by account rules i.e., every company which uses an accounting software for maintaining its books of account, should use only such accounting software which has the following features:
Auditor’s Responsibility - Companies (Audit & Auditors) Rules,2014:-
11. Other matters to be included in auditors report :-
The auditor’s report shall also include their views and comments on the following matters, namely:-
(a) whether the company has disclosed the impact, if any, of pending litigations on its financial position in its financial statement;
(b) whether the company has made provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;
(c) whether there has been any delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.
(d) Omitted
(e) (i) (ii) (iii)
(f) Whether the dividend declared or paid during the year by the company is in compliance with section 123 of the Companies Act, 2013.
(g) of Companies (Audit and Auditors) Rules, 2014.
Whether the company, in respect of financial years commencing on or after the 1st April, 2022, has used such accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions recorded in the software and the audit trail feature has not been tampered with and the audit trail has been preserved by the company as per the statutory requirements for record retention
DISCLAIMER :-
This Video is for the purposes of information / knowledge and shall not be treated as solicitation in any manner or of for any other purposes whatsoever.
It shall not to be used for any legal advice /opinion and shall not to be used to rendering any professional opinion. Viewers are advised to kindly go through to original Government publications / notifications and published case laws or judicial pronouncements.
The statements and opinions expressed in video are those of the speaker and do not necessarily reflect those of the CA Sansaar or any of its employees. CASansaar Team does not take any responsibility for the views of the Speaker.
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Very useful presentation to be viewed by all accountants
Thank you Sir for wonderful presentation
Welcome
Thanks sir very well explanation
Amazing video, kindly share the pdf notes of this video plz
Can we Maintain our Book of accounts on excel…..what its called …Manual or Software …..
Software but audit trail must in that case
Company makes gst invoice in excel & we as a CA enter into our Tally with edit log software at month end of all those invoices? Is it valid complaince for MCA as date of Invoice and date of entry in software will vary.
Sir, in AS there's concept of adjusting and non-adjusting items, for adjusting items/transactions between b/s date and it approval date, we need to make the entry backdated
Can we get a copy of your presentation
Hello,
My question is what is In building materials what is that when purchasing we give 28% tax and when sell it we take 18% tax.
Are the auditors required to report on the audit trail features in their reports for FY2022-23?
Yes but mandatory trail required from 1st Arpil 23 onwards.
Once mandatory from April1,2023then why and how could we comment on it for FY2022-23 reporting?