Audit Trails: What You Need to Know
An audit trail is a comprehensive, chronological record of business transactions with evidence that traces each activity back to its source. These records are used to verify the accuracy and validity of data pertaining to things like trades, company spending, and source of funds.
Information to Include in Audit Records
An audit record or event should be created each time a business performs an action using system resources. Publication 1075, Exhibit 9 contains extensive guidelines regarding what actions must be recorded. Each individual record must contain several vital pieces of information:
- Date and time
- Unique user ID
- Type of event
- Success or failure of action
- Origin of request
- Name of the object introduced/deleted
- Description of modification to security databases
A complete audit trail will consist of the above details related to all relevant actions outlined in Publication 1075.
Why Audit Trails Are Important
It’s essential for you — and the businesses you serve — to maintain reliable audit trails. A clear, well-kept audit trail is valuable because it:
- Helps establish internal controls and processes to protect the business
- Aids in identifying items like missing transactions or fraudulent charges
- Allows for a smooth audit process by ensuring compliance with federally regulated record-keeping requirements
By encouraging clients to maintain their audit trail, you’re helping to prepare them to pass an audit should they face one. Additionally, if your clients have better records, you can also operate with improved confidence through the filing process. A reliable audit trail is also crucial for you when managing numerous client accounts as keeping a complete record of client interactions and documents submitted can protect you by placing the accountability on your clients to report their filing details accurately.
Automate Your Audit Trail With FileJet
Audit trails may seem intimidating. After all, they require you to keep up with a large volume of highly-detailed data, in an organized fashion, for an extended period — and for all the entities you serve. However, many cloud-based applications used for business management functions already have built-in audit trail capabilities — like our FileJet platform. FileJet allows you to store and maintain client data for up to 1,000 entities through an intuitive, customized interface. Clients visit a secure personal portal to submit filing information directly to you. The FileJet system automatically creates an audit trail by which you can hold the client accountable for the information they’ve provided come filing time. For more information about FileJet, please contact us today.