This is a welcome move to protect the Shareholder’ and Investors’ interests. This is almost like food safety and road safety. Audit trail of Data will ensure Data security and integrity.
The highway does not offer a lot of flexibility for the drivers and the public. It has lots of restrictions. But it offers speed and safety.
Pen and Paper to Digital accounting
Let us first understand the evolution of Accounting software 25 years ago. During then, accounting was happening in pen and paper. Compiling data was too difficult and time-consuming. Also, the companies were growing due to the industrial growth and so were the number of transactions. This made manual accounting more difficult. At that point in time, everyone was new to computers. They were all been looking for simple software to automate their inventory and accounting. Adopting a simple Accounting software to move away from pen and paper was the right decision 30 years ago.
The world has moved on:
- Dial phone to Pagers to Mobile phone
- Typewriters to Electronic Printers to PC to Laptops to Mobile
If we see, in the 30 years of time, there were many developments in the digital space. However, under the name of user-friendliness, the business has been stuck to the same accounting software which does not provide data integrity, security, and audit trials is a real cause of concern. Moreover, accounting software does not provide decision support for business leaders.
End-to-end data for Enterprise with Audit Trials
Data security and data integrity are most critical for the success of the enterprise. Many of the enterprises are still operating in a disconnected mode. They use multiple software for a different business function. This makes the MIS and decision-making very complex and difficult. Audit trails are very important to ensure there are no malpractices in the system.
- User roles to be created to ensure data integrity.
- Any transaction number created in the system cannot be removed at any cost.
- All transactions should have a creator and approver.
- Before approval, the transaction can be deleted (but the system will hold the transaction details, but will not be considered for reports or further transactions)
- The approved transactions can void. But before the void, the related previous transaction must be void.
- All data transactions created in the system must be available with their Transaction date and the date of entry. This is very important if the user is creating the transaction on the current data or on the backdate
Auditors to play a key role:
Auditors should take the prime responsibility to educate the business on the need for data integrity. This was a long pending pain in the system now got the direction from the policymakers.
Conclusion: High-speed car needs a good highway with restrictions and security. The same way high-speed business needs end-to-end business software with audit trails.
