Use of Audit Trail in Zoho Books

Use of Audit Trail in Zoho Books

It was on March 24th, 2021 when the Ministry of Corporate Affairs, India released a notification that instructed companies to use accounting software that could show an audit trail of all transactions carried out. Essentially, this rule was applied so that the companies could maintain their books properly.

With the release of this notification, the accounting software that companies used was supposed to have the following things:

  1. An ability to record the audit trail of each transaction that was taking place.
  2. A feature to create and edit a log of all changes that happened in the books along with the date and use details.
  3. An ability to ensure that the audit trail feature was always enabled.
Going by this rule, Zoho Books released a fantastic new feature called the audit trail for all the users of India. This is a feature that is included in the Activity Reports module of the amazing Zoho Books software.

Details of New Software Requirements:

With this new rule of Companies (Accounts) Amendment Rules released by the Ministry of Corporate Affairs, companies are prevented from correcting transactions and fixing errors. This is to prevent them from hiding any changes. The new requirement of showing an audit trail is a result of insights from previous investigations.

In the past, many companies fudged their books by consistently changing the transaction details. The main idea behind releasing the new feature of audit trails was to prevent this problem. The Companies (Accounts) Amendment Rules mandate that the companies record audit trails of all transactions. It also specifies that the accounting software creates an edit log of all changes that are made in the books. This rule was to prevent any accounting software from making changes in entries.

Even if the businesses have been using software with a weak audit trail facility, it was possible to make the transition. The effort involved comes down to how much data and complexity the current system can possibly handle. The process of shifting to an audit trail system can be done in different phases. Zoho Books is a business accounting software that comes with a built-in audit trail functionality that allows an auditor to confidently attest to the veracity of records.

All About Audit Trail Feature:

The audit trail feature of Zoho Books enables an organization to effectively monitor all activities that happen in the transactions. This way, it is possible to prevent any kind of transaction and fraud. You can maintain a log of all changes that are made to contact, purchase transactions, sales, settings, and even a journal.

So basically, Zoho Books comes with an Audit Trail that is a feature to find out how, when and who has modified a specific transaction. Anybody can access this feature in the activity logs. For doing this, the following steps can be taken:
  1. First, go to the modules called “Reports” from the left sidebar
  2. Click on the “Activity Logs” placed under the Activity section
  3. Now, click on the > Arrow mark placed on the right side of the activity that you wish to check.
In addition, you can also check what has changed by comparing two versions of a specific transaction. You can do this by taking the below-mentioned steps.
  1. Click “Compare” in the top right corner.
  2. Choose any two versions of the transactions that you would like to compare.
  3. Finally, click on “Compare”.
All the fields that were added, modified, or even deleted are going to be highlighted in the colors green, yellow and red.

The Efficiency of Audit Trail Feature:

Zoho Books maintains a log of all possible changes that are made to any record in the application. Some common changes can be sales or purchase of transactions, invoices or bills, journals, contact, or even a setting. Other than the kind of change that is being talked about, Zoho Books is also capable of saving the timestamp and details of all users who have taken an action.

To sum this up, the feature of Audit Trail in Zoho Books offers details on “when”, “where”, “who”, and “what.”

  1. You can know the date and time on which an action was taken.
  2. You can also know the module under which an action was performed. This can include invoices, bank feeds, bills, or expenses. Actions performed under any module can be seen.
  3. You can also get a description of the action performed like creating an invoice, updating the contents of a bill, editing items on an invoice.
  4. Finally, you can also know the user who performed the action. In case a record is changed many times, the audit trail shows each version that has been created, not just the recent one. The user can also compare many versions and track data that has been added, removed, and modified.
Conclusion:
​
It was only with a positive and progressive intention that the Indian government made this rule of enforcing an audit trail for the transactions that get recorded in the accounting software. Therefore, Zoho Books made sure that the necessary steps were taken to further ensure the implementation of an “Audit Trail” feature that could curb transactional frauds.

Zoho Books is a software that enables organizations to stay compliant with the rules introduced by the government so that any unrecorded transactions can be prevented. It must be noted that although using Audit Trail is important, it is entirely on the companies to choose the right software that can offer this capability.
Hence, if you run a company that uses accounting software, make sure that you use software that is empowered with a feature of audit trail such as Zoho Books.


I hope that you learned something new
Follow me for more such posts!

Cheers!
Abhi
(Seasoned Zoho Authorized and Certified Partner)

Feel free to contact me if you have any queries
Email: abhishek(@)encaptechno(dot)com
Call: +1-416-405-8185



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