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Mandatory Accounting & Bookkeeping using Accounting Software with Audit Trail

ComplianceGlobally April 25, 2024
Mandatory Accounting & Bookkeeping using Accounting Software with Audit Trail

Mandatory Accounting & Bookkeeping using Accounting Software with Audit Trail

As per MCA latest Amendment notification dated 24.03.2021 Companies (Accounts) Amendment Rules, 2021, Every registered Company (Private Ltd. /Public Ltd.) have to keep its books of account on accounting software, that software should have feature to record audit trail of each transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

Each change made in books of accounts will be recorded through audit trail. Maintaining records through audit trail detect security violations and flaws of application.

There are many accounting software’s used for Audit trail, popular of those are as follows-

  1. QuickBooks
  2. SAP Audit Management
  3.  Xero

 QuickBooks & SAP are the software’s which run on cloud-based technology and our team is using them from last 10 years.

This Audit trail point will be inserted in Auditor’s report as per MCA notification.

FAQs on Companies (Accounts) Amendment Rules, 2021

  1. What is Audit Trail?

     An audit trail is a step-by-step record by which accounting or trade data can be traced to its source. An auditor can trace the financial data of a particular transaction right from the general ledger to its source document with the help of the audit trail. An audit trail is most often utilized when the accuracy of an item needs to be verified.

  1. Which softwares used for Audit Trail?

     There are many accounting softwares used for Audit trail, popular of those are as follows-

  1. QuickBooks
  2. SAP Audit Management
  3.  Xero
  1. Which are good accounting softwares which leaves Audit trail?

     QuickBooks & SAP are the software which run on cloud-based technology and   our team is using them from last 10 years. These are good accounting softwares.

    • I have a registered LLP, do I need to use Accounting software with Audit Trail?
    • No, this amendment does not apply on LLP. LLP is not required to use this software.

 

    • I have a registered OPC, do I need to use Accounting software with Audit Trail?
    • No, this amendment does not apply on OPC. This is for Private/Public Company.
    • Can I convert Private Limited Company into LLP & how it can be converted?
    • Yes, you can convert a Private Limited Company in LLP.
    • For the conversion you can follow us on complypartner.com
    • I have a registered Private Limited Company, now I want to close it. Can I close it & what will be the procedure for it?
    • Yes, you can close a Private Limted Company. For more details you can follow us on complypartner.com
    •  
    • Are there any changes in Audit report regarding Audit Trail?
    • Yes, there will be clause(g) inserted according to MCA notification Companies (Audit and Auditors) Amendment Rules, 2021 in Auditor’s report in which Auditor have to mention for accounting software used which has a feature of recording Audit Trail.
    • I have very limited transactions, which accounting package will be beneficial for me?
    • We have tailor made packages available for Accounting & Bookkeeping starting from INR 1,999 plus GST, you can check out on our link- Accounting & Bookkeeping
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