All businesses need to store their documentation of purchases, reports, and other activities of the company. Audit trails help maintain this necessary information. An audit trail is the manual or electronic records of all transactions made. It documents events chronologically and indicates proper internal controls in a firm. Here are a few of the main reasons your clients should have an audit trail:
Record Payroll Information
One reason a firm needs an audit trail is that it keeps track of payroll information. Businesses are required to have records of all hiring and termination activities. Sometimes there may be an employee dispute. It will help to have time cards and pay stubs to resolves issues. Audit trails can save time and resources.
Prevent Fraud
By having an audit trail, fraud can be detected and prevented. A good audit trail will enable you to confirm events and catch any suspicious activity. If someone were to commit fraud, there would be evidence left behind. Employees are less likely to commit fraud if they know an audit trail is frequently monitored.
Help with Investigations
Audit trails can help investigations run smoothly. They let businesses know what happened and when it happened. It is important to be able to create a picture so that problems can get fixed sooner. An audit trail can help solve issues regarding hacking or system failures. Be sure to keep track of all records to prevent future problems.
Keep Businesses in Compliance
Many industries are required to follow regulatory statutes in the United States. It is important to have an accurate audit trail to prevent infractions. The Gramm-Leach-Bliley Act is an example of a law that requires businesses to maintain electronic records and to have the means for proper audit. Violations will result in punishments, such as fines.
An audit trail can be simple or complex. IT can play a crucial role in making sure information is available and secure. To learn more, contact us today.
