5 Benefits of Audit Trail

Posted by busysoftware on May 10th, 2021

5 benefits of an audit trail in accounting software that every business should know about

Starting from logistics to healthcare, financial, technology, and other services, every sector needs to keep an audit trail. Everyone needs immutable and secure records for all transactions being done, with whom, when, and why for checking if the data is true and accurate. Businesses mainly need audit trails in accounting software for complying with the requirements of the industry or regulations introduced by the government. On the other hand, having a well-managed audit trail can help an organization relate to its state of business both in the present and past.

Through an audit trail, a business can record its events, such as shipment delivery, order creation, exporting an order aboard, or filing to claim insurance. Businesses that involve data exchange or trade between two or more parties can benefit abundantly from audit trails. For example, a logistics company receives orders on a daily basis, and millions of local stores accept those orders, and the logistics company is responsible for delivering the goods without harm. 

Now, just like this instance, there are other organizations dealing with a large amount of data and finance every day. All such business records need to be filed and maintained for reference. So, let us find out how the audit trail in inventory management software benefits your business.

The Indian Government’s Approach To Audit Trail

The nation accepted that by 1st April 2021 the audit trail will become mandatory for each organization. But, the Corporate Affairs Ministry postponed the implementation till next year.  

In this, the government has a commendable intent by introducing transparency to boost better compliance. We can assume that the objective is to identify at which level the data of accounting software is being manipulated by any corporate management person for committing fraud on their stakeholders’(money lenders, tax authorities, shareholders) interests, and in the system, for attacking the purpose and objective of law and enforcement.

The trail of activities revolving around an individual transaction refers to the audit trail in accounting software. In the regulatory and conceptual stage, the audit trail becomes very apt and important. However, there are some concerns that forecast certain requirements stated in the government’s notification. To address this cause a few software automates audit trails for user benefit. We will come to this matter later, first, let us learn about the benefits of an audit trail. 

Benefits of an Audit Trail

The option for referring to records at any stage offers several benefits, such as defending and transparency of records for compliance, shielding the system from misuse or corruption, the accuracy, and integrity of records, security for vital and confidential information. 

These can be achieved with the following five domains:

Rebuilding of Events 

An escalation or investigation when triggered or warranted, the trick is to restore the issues by identifying, what, who, when, and how of that incident. Once you have enough details on these questions, it will help you to fight a similar issue in the future. The issue could be underlying at any technical level such as system crash, hacking, outages, or exploiting the information. 

Accountability of the User 

Anyone who can access the inventory management software is a user. Incorporating audit trails helps in promoting proper user behavior. This helps in preventing the system from modifications or use that is unauthorized, information used inadequately, and harmful viruses. Further, the users will be aware that their actions will be recorded under an identity that is unique. 

Detecting Breach

Any suspicious actions or behavior can easily be detected by the audit trails. An intrusive or unauthorized entry could become a serious issue for many accounting software and businesses. Regulations are turning towards mandating the security of the data and maintaining it without disclosure. The security of data involves intellectual designs, property, financial information, and personal data. 

Recovering the Lost Data

Some inventory management software recognizes why and how systems crash or unauthorized access relevant for avoiding future breaches or failures. In times of data loss audit trails or changes allowed by the managing bodies by recreating the information files via the alterations recorded in the trails. 

Mislenicious Problems 

By monitoring in real-time, you could access the automated audit trail in accounting software for identifying, operation issues, suspicious or unusual behavior, operator and system problems, or system implementation troubles.  

This is a list of benefits that come with inventory management software that is compliant with modern regulations. Even though there is a year’s time for the implementation of the rule, there is no harm in starting early. Frankly, you wouldn’t want to miss out on a fantastic opportunity that could help your business grow with skyrocketing statistics. 

Busy Software and its competence to the audit trail

Here’s what we promised earlier, the big disclosure on the automated audit trail. 

Accounting software such as Busy Software comes with all these benefits, additionally, the audit trail feature is automated in the system. With this feature, you will not have to fear breaches or misuse of your resources by any third-party user or administrator. 

If you are still confused, fret not Busy Software has it sorted, visit our guide pages, or contact us directly for any questions related to the software. In short, if you are thinking about smoothening your accounting solutions Busy is more than happy to be your partner.