MCA defers mandating Companies to use Software with Audit Trail of each Transaction [Read Notification]

MCA defers mandating Companies to use Software with Audit Trail of each Transaction [Read Notification]

MCA - Companies - Software with Audit Trail - Transaction - Deferred -- Taxscan

The Ministry of Corporate Affairs ( MCA ) has deferred mandating Companies to use Software with an Audit Trail of each Transaction.

The MCA had notified that 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.

In rule 3, in sub-rule (1), the proviso shall be inserted which says, “Provided 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.”

In rule 8, in sub-rule (5), after clause (x), the two clauses shall be inserted.

Firstly, the details of an application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.

Secondly, the details of difference between the amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.”

The notification now shall come into force with effect from the 1 April, 2022 only.

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