Mandatory audit trailing rules for companies come into effect from this fiscal

The Auditing and Assurance Standards Board (AASB) of the Institute of Chartered Accountants of India (ICAI) has put out an Implementation Guide to give the members the necessary direction on this new reporting obligation.

“This is a relevant move by MCA to bring in higher levels of process integrity in maintenance of books of accounts by companies. Icai as a regulatory body is committed to support steps that strengthen governance frameworks . It’s a welcome move and will help increase transparency. ICAI has also issued an implementation guide in relation to auditors responsibility in this regard,” says CA Aniket Talati, President , ICAI.

An audit trail is a list of all the data modifications that have been done throughout these eight years. Any alteration to data, including newly added, updated, or deleted data, must be documented.

The new rules for audit trailing were brought under the “Companies (Audit and Auditors) Amendment Rules, 2021″ by the Ministry of Corporate Affairs. The new rules are aimed at enabling businesses to track all financial activities with transparency and detect frauds in time.