Well-managed audit trails are key indicators of good internal business controls and form the basis of objectivity. Audit trails have long been done on paper or electronically. Step by step the digitalization of old generation computer systems has moved to auditors and organizations preferring electronic logs and trail systems. These electronic logs automate and make the documented history of a transaction more accurate, accessible and usable. Successful audit trails demand a simple process with a commitment by upper management and affected departments.
The quicker an abnormal change or addition to information is “red-flagged,” the better the response to mitigate against negative influences such as fraud, cyber-threats, security breaches, data corruption, or misuse of information.
An accounting trail makes it for internal controls easier to check the accuracy of financial data. By implementing a business process and using the correct tools you can target fraud, data incompleteness, and missing information; problems that breed inaccurate financial reporting. By giving corporate auditors source documents for analysis and review, the data trail improves chances that auditors will detect instances of inappropriate record-keeping behaviors, unlawful business practices and mathematical inaccuracies in period-end accounting records.