How to Prepare your Business for Audit Trail (Edit Log) Rule?

In a quest to make financial processes more transparent, the Ministry of Corporate Affairs (MCA) has made it mandatory for businesses using accounting software to have the audit trail (edit log) feature. This feature will track end-to-end transactions events such record, edit, delete etc. and enable a seamless business ecosystem.

Although the reason behind this move has primarily been to bring in compliance and transparency in the business ecosystem, it also aimed to eliminate any disarray within the system, thereby enabling companies to handle their finances better. With the new audit trail (edit log) feature integrated into accounting software, businesses would be able to keep track and aggregate logs that would further help them remain compliant with the regulations.

However, since it's a new mandate, we understand that you might have certain questions pertaining to the new audit trail rule as a business. How to quickly get accustomed to the new rule? How should you prepare for the upcoming days? To provide you with a better understanding of the process, here's a detailed insight into the brief of the MCA, what it implies, and how you can prep for the upcoming mandatory rule.

Brief on the audit trail rule notified by MCA

As per the notification, businesses that fall under the purview of the MCA and are using accounting software to maintain all financial transactions will require the audit trail (edit log) feature to remain compliant with the latest regulation.

This would help companies identify any anomalies in data or unusual activities that might have happened in the system. It will also help businesses detect fraud identify problem areas, enabling seamless business processes.

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.

Things that companies should prepare for audit trail rule

With the audit trail rule, you might have several questions about how to prepare your business to be compliant with the new rule. To answer that, here are some of the key aspects that you need to keep in mind as a company to prepare for the upcoming audit trail rule:

• Evaluate if your accounting software caters to MCA guidelines: As a business, it is essential to understand the fundamentals of the MCA guideline to ensure that your accounting software comes with the audit trail (edit log) feature. To remain compliant with the new audit trail rule, every company that uses accounting software must have the audit trail feature to capture the trail of each and every transaction.

• Educate your team on the new rule: To ensure that your business easily transitions to the new rule, your staff needs to be empowered. Conducting webinars on the importance of the new amendment and ensuring that your staff adapts to the new way of working will be the key to remaining compliant.

• Automatic recording of transactions: It is mandatory for companies to investigate the current procedure of recording transactions- whether it is being recorded automatically and cannot be disabled under any circumstances. In case there's any deviation from the same, they need to bring relevant changes to remain compliant with the audit trail rule.  

• Compliant software to manage business efficiently: For a smooth business transition, make sure that you have compliant accounting software that helps you meet the new audit trail (edit log) guidelines, thereby ensuring seamless business operations.  

Audit trail (edit log) features of TallyPrime Edit Log Release 2.1

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:

• Track the edits for masters and every transaction
• Capture the date details and username when such changes (edits) are made
• Difference report to show the elements of the version that have been modified
• Reports are enhanced to filter the edited transactions
• Designed to ensure edit log feature will be enabled all the time to meet the MCA guidelines of 'Edit trail cannot be disabled.'

Watch the Video to Learn How to Work on TallyPrime and TallyPrime Edit Log on the Same System

Watch the Video to Learn How to View Edit Log for Transactions and Masters in TallyPrime Edit Log Release 2.1 Onwards

Watch the Video to Learn How to View Edit Log for Transactions and Masters in TallyPrime Release 2.1 Onwards