ICAI Issues FAQs for MCA’s Mandatory Audit Trail Norm

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Updated – February 14, 2024 at 08:56 PM.

CA Institute comes up with revised implementation guide

The CA Institute’s implementation guide clarifies that an auditor is not required to assess appropriateness of audit trail of previous years and the assessment will be applicable for prospective periods for financial years commencing on or after April 1,2023
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The CA Institute has issued Frequently Asked Questions (FAQs) to assist its members in handling various practical situations arising from Government norm requiring companies to use only accounting software  having “audit trail” features.

These FAQs are now part of the revised implementation guide now issued by the Institute of Chartered Accountants of India (ICAI), sources said.

Last year, ICAI had come out with an implementation guide that came in handy for members in ensuring compliance of the MCA’s diktat on audit trail.

2021 mandate

MCA had initially in March 2021 mandated every company that uses accounting software to maintain its books of accounts to only use software that has the feature to record audit trail of each and every transaction put through after April 1, 2022. However, later this timeline was deferred to April 1, 2023.Also, companies had been mandated to create edit logs of each change made in account books with the proper dates. As per the MCA’s rule amendments, companies must ensure that the audit trail is not disabled and auditors have to report if this norm is not adhered to by the company concerned.

The CA Institute’s implementation guide clarifies that an auditor is not required to assess appropriateness of audit trail of previous years and the assessment will be applicable for prospective periods for financial years commencing on or after April 1,2023.

The implementation guide clarifies that the primary responsibility for maintenance of audit trail is that of the management.

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