An audit is key in establishing trust between management and stakeholders. Every industry, from logistics to healthcare, finance, technology, and other services, needs to maintain an audit trail. To verify that the data is true and accurate, everyone needs immutable and secure records for all transactions that are made, with whom, when, and why. Accounting software audit trails are mostly required by businesses to meet industry standards or laws put in place by the government.
A well-managed audit trail can also assist an organisation in understanding both the present and past states of its firm. Here at the Big Red Cloud, we have written this blog post to outline exactly what an audit trail is and the benefits it can have for your business.
What is an Audit Trail?
To put it simply, an Audit Trail is an organised record to trace the foundation of financial data and provide sequential, documentary evidence of a series of events. It is therefore used to verify the precision of data and track transactions. Important information regarding the activity on a computer system will be available to the auditor from the Audit Trail.
You can think of an Audit Trail as an insurance. You pay it no heed or need it unless something goes wrong. You don’t need it until you really need it. But if you don’t have one, the consequences can be catastrophic.
The Benefits of an Audit Trail
The option of referring to records at any stage during your daily business cycle offers several benefits for an organisation.
Accountability
Audit Trails establish individual enterprise responsibility for user behaviour. It prevents the entry of false information or unauthorized access to data. Users are also less likely to attempt to get around security measures if the user is aware that their actions are instantly recorded and connected to their own identity.
Intrusion Detection
Intrusion detection refers to the process of recognizing attempts to enter a system and gain unauthorized access. It is required by several policies to protect data privacy. It includes the security of financial records, intellectual property, and personal information.
Reconstruction of Events
When an investigation or escalation is required, the trick is to determine the what, who, when, and how of the occurrence in order to resolve the concerns. It will be easier for you to combat a problem of this nature in the future once you have enough information on these questions. Any technical issue, such as a system crash, hacking, outages, or information exploitation, could be the root of the issue. An audit trail provides all of this information to ensure answers are easily identifiable.
Problem Identification
Audit trails can be used to identify issues other than invasions as they happen. Instantaneous auditing or examining are common terms used to describe this. Instantaneous auditing can be used to examine the status of operational difficulties, unusual or suspicious actions, or system errors through real-time monitoring if a system or application is deemed crucial to an organisation’s operations or mission.
Recovering Lost Data
Some accounting software can recognise why and how systems crash or unauthorized access relevant for avoiding future breaches or failures. In times of data loss, audit trails can help recreate information files via the alterations recorded in the trails. This can help save a lot of time and money in such instances.
Operational Issues
Thanks to real-time monitoring, automated audit trails in your accounting software can help identify operational issues, suspicious or unusual behaviour, system problems, or system implementation troubles.
As you can see, an Audit Trail is very beneficial for any organization. Here at the Big Red Cloud, Audit Trails are one of our many valuable features. Big Red Cloud’s easy accounting software provides a step-by-step documented history of all transactions so that you can investigate errors if and when they arise. This is particularly relevant if a customer is invoiced incorrectly — you’re able to quickly identify who made the error and when. Knowing there is an error in your accounts is one thing but finding out how it occurred is another.
If this sounds like the service you need for your business, contact us at 01 204 8300 or at info@bigredcloud.com. We are Ireland’s #1 Cloud accounting software for small business owners who want to be more profitable. Don’t leave your finances in the dark!
