Audit Trail and Edit Log With Tally Prime from April 2023

An Audit trail is a log of activities performed related to any transaction. Hence, it is also called an edit log. This concept is widely used in Accounting. Thus, the log can be used to trace the creation, alteration, and deletion of the record. Hence, especially the auditor can verify the details of such activities during the audit process. See below how to activate the audit trail in tally prime.

audit trail meaning

Audit Trail Applicability in India

The Ministry of Corporate Affairs has made it mandatory to keep the audit trail/edit log w.e.f 01.04.2022. In order to implement this rule, necessary amendments have been made by the government. However, later this has been postponed until 1st April 2023.

According to the revised rule, for the financial year commencing on or after the 1st day of April 2022, every company shall use only such accounting software which has a feature of recording the audit trail of each and every transaction. The software should be able to create a log of each change made in the books of account along with the date when such changes were made.

This has reference to the below MCA notifications:

How to maintain Audit Trail in Tally Prime?

The latest version of Tally Prime 2.1 provides features for maintaining the audit trail. The new feature is called the “Edit log”. The new users can download the software from their website. However, the existing tally prime users need to upgrade to version 2.1, if not already done.

image audit trail tally prime

Thus, the edit log in tally creates the log of created, modified, and deleted transactions with the name of its user. The system records the activities of transactions related to items, ledgers, and groups. Alternatively, this feature can be accessed from the tally prime daybook.

See: Tally prime shortcut keys

How to Enable Edit log in Tally prime?

Time needed: 2 minutes

From the Gateway of tally prime

  1. press ALT + K or Click on Company >> Alter from the Top menu.

    enable edit

  2. Press F12 from the company alteration screen

  3. Enable “set edit log Applicability” to Yes

    applicability option

  4. Press CTRL + A to Save

How to access Edit log activities?

The edit activities can be accessed from the following screens:

  • Click Company >> Edit log from the top menu
  • Day Book
  • Item, Ledger, Group Alteration screen

You may also see the below official video from Tally solutions guiding the Tally prime feature.

Enhanced Features in TallyPrime

  1. Mandatory Compliance Date: The Ministry of Corporate Affairs (MCA) has mandated the use of audit trail/edit log features in accounting software starting from April 1, 2023. This requirement ensures that all changes in the books of accounts are recorded with details of the user and the date of modification.
  2. Enhanced Features in TallyPrime: The latest version of TallyPrime includes an enhanced edit log feature that tracks the creation, alteration, and deletion of transactions and masters (like ledgers and stock items). This feature is enabled by default in the TallyPrime Edit Log release, ensuring compliance with MCA guidelines.
  3. User-Friendly Access: Users can easily access the edit log activities from various screens such as the Company menu, Day Book, and Item/Ledger/Group Alteration screens. This makes it convenient to track and review changes.
  4. Comparison and Reporting: TallyPrime now allows users to compare different versions of transactions to identify modifications. Enhanced reports also provide options to filter and sort edited or deleted transactions, aiding in better internal control and audit readiness.
  5. Installation and Setup: For companies under MCA’s purview, it is recommended to download and install the TallyPrime Edit Log release. This version ensures that the edit log feature is always enabled, complying with statutory requirements.

Incorporating these updates will ensure that the article remains current and provides comprehensive information on the latest features and compliance requirements for TallyPrime users.

Implementation Guide by ICAI

  1. Implementation Guide Issued: The Institute of Chartered Accountants of India (ICAI) has released an implementation guide to help companies comply with the mandatory audit trail requirements. This guide clarifies that auditors are responsible for ensuring the audit trail feature is operational throughout the year for all transactions.
  2. Mandatory from April 2023: The Ministry of Corporate Affairs (MCA) has mandated that all companies must use accounting software with an audit trail feature starting from April 1, 2023. This requirement aims to enhance transparency and accountability in financial reporting.
  3. Detailed Record-Keeping: Companies are required to maintain a detailed audit trail of all transactions, including financial, operational, and administrative activities. This includes information about who initiated the transaction, when it was initiated, and the nature of the transaction.
  4. Internal Controls: The implementation guide emphasizes the importance of internal controls related to the audit trail. Companies must ensure that the audit trail is not disabled and that all changes in the books of accounts are recorded with proper dates.

These updates are crucial for ensuring compliance and improving the accuracy and reliability of financial records. If you need more detailed information on any specific aspect, feel free to ask!