Request to Extend the Implementation of Audit Trail feature in accounting software
From the Desk of the Founder
CA. Sanjay Kumar Agarwal
CA. {Member Name}
Greetings !!
As we know that the Ministry of Corporate Affairs (hereinafter referred as ‘MCA’) vide its notification dated 24.03.2021 (Companies (Accounts) Amendment Rules, 2021) has notified that, for the financial year commencing on or after the 1st day of April, 2021, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The aforesaid notification has a wide impact upon the businesses, auditors and software providers operating in the nation. There are concerns emanating from the operational areas of businesses and their details that still remain unclear and that do need to be understood and highlighted. Some of the areas of concern are as under:
To make the whole ecosystem ready and prepare all layers of professions for a successful and collaborative implementation of audit trail in the Indian business community will need time.
The order mandates an implementation from 1st of April 2021, which is less than a week from when the order was announced. Such a rushed enforcement can trigger panic, mistrust and resistance from businesses. This shall certainly increase cost of compliance and pressure on the accountants’ community.
Many enterprises are still reeling from the losses inflicted by the COVID-19 pandemic while juggling GST compliances, instituting such rule changes at such a short notice will create a fear among the smaller companies and the move may become counterproductive.
The steps that the government is taking to improve the system, but this move will have a large impact on the small and medium-sized companies, and it should not be an issue for the larger companies. It will create friction in the ease of doing business for the smaller enterprises.
The businesses are already struggling to stabilise in post COVID Scenario, and no time has been provided to businesses for implementation of the same. The implementation shall require upgradation or purchase of new software and thereafter getting used to the same.
In this regard, we have made representation before the Hon'ble Minister of Finance & Corporate Affairs Smt. Nirmala SitharamanJi(Please click here for the representation) and requested to exempt small companies from using the accounting software having feature of recording of Audit Trail w.e.f. from the 01/04/2021, else offer a software, free of cost, having aforesaid feature to the small/mid-sized concerns or recommend any suitable alternatives that can be opted by them till the implementation of the accounting software having audit trail.
I pray to the Almighty that all of us continue the same with our good deeds and positive thoughts.
Thanks a lot to all members for the tremendous support and motivation that you have given to Voice of CA. God bless us all !!!
Regards,
CA. Sanjay K. Agarwal
Founder – Voice of CA
Member Central Council of ICAI (2009-2018)
