Accounting software with audit trail feature: MCA postpones implementation to FY23

By: |
April 08, 2021 1:45 AM

The postponement of the rule, a senior government official said, is in view of the Covid situation in the country. “Giving a year’s time to companies will ensure better compliance,” he added.

Most entities in the MSME sector do not have such software. Large companies already use such accounting software.Most entities in the MSME sector do not have such software. Large companies already use such accounting software.

The ministry of corporate affairs (MCA) has given companies a year to implement its latest regulation which mandates the use of accounting software that records each and every transaction made by them. Companies will now have time till March 31, 2022 for deploying the software.

Last month, the MCA directed all businesses using accounting software to maintain books of accounts to have audit trail features that includes recording audit trail and creating an edit log of each change made in the books of account along with the date when such change was made. Also the audit trail cannot be disabled.

The postponement of the rule, a senior government official said, is in view of the Covid situation in the country. “Giving a year’s time to companies will ensure better compliance,” he added.

Most entities in the MSME sector do not have such software. Large companies already use such accounting software.

AMRG & Associates CEO Gaurav Mohan said. “This will definitely bring in more transparency, compliance and its need cannot be stressed more. But with it certain challenges come forth such as genuine errors corrected will always remain in logs and increase burden on the companies and auditors. Such a software has to be hack-free and tamper-free where no one is able to manipulate the same”.

Moreover, this software will be used by all companies as well and shall be cost effective. An increase in compliance cannot put an undue financial stress on the companies. The regulator should consider providing free or cost effective software to all which follow the necessary compliance. This change is good for regulators and auditors but it’s practical execution with the availability of such software at the ground level has to be seen, he added.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Spectrum auction: Trai may look at new pricing model to fix reserve price for 5G auctions
2Real estate revival: It could be a cracker of a Diwali for builders
3Central assistance eligibility: States owe Rs 1.6 lakh crore to discoms as subsidies, power dues