An audit trail can be used for the following reasons:
When the above attributes are incorporated in the company, it can reduce time, cost, and efforts for recording and auditing financial transactions. The resources in the form of time, cost, and efforts can then be allocated in different directions within the company, such as planning, monitoring, organizing and directing, etc.
The audit trail has numerous benefits, some of which are mentioned below:
The Government took a step forward to establish better control and transparency in the company by introducing an amendment in Companies (Audit and Auditors) Rules 2014, which is known as the Companies (Audit and Auditors) Amendment Rules 2021, notified by the Ministry of Corporate Affairs on March 24, 2021.
The amendment provides that the auditor’s report shall include the details of:
Such an amendment can minimize fraud, and auditors can easily access the recorded transactions.