Audit trail of transactions from April 1 - Here's what will change for companies

Come April 1, corporate houses and companies will not be able to hide their unaccounted for transactions which they use to generate black money. This is because of the new audit trail rules laid down by the Ministry of Corporate Affairs which mandate that the records of each transaction be maintained.

The Ministry's notification makes it obligatory for companies to use only that software which provides the audit trail of each transaction and there is no way to remove this audit trail. Any changes made in the accounts will create an audit log, with the date of the change made.

The ministry sources said the existing software in use does not provide any audit trail and so the department cannot find out the date of entry in the accounts and as such it cannot trace the irregularities in the business.

The audit trail means an automatic record created on the date of every entry and any changes made thereafter. It will also ensure record of the backdate entries.

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal