New Delhi: In order to curb the accounting malpractices, the ministry of corporate affairs has made it compulsory for all the companies that use a software programme to maintain their books of accounts to maintain the entire audit trail of each and every transaction. The Government said the programme feature should be such that every change made in an audit entry must be recorded with a time stamp and there should be no provision to disable the audit trail.
The provision is aimed at curbing the manipulation of books of accounts, which also includes use of fake GST invoices to inflate turnover or for evasion of taxes by fraudulently claiming input tax credit.
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In a gazette notification issued on Wednesday, the government made changes in the Companies (Accounts) Rules of 2014 to insert the necessary provision by inserting a provision in sub-rule (1) of rule 3.
“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,” the government said in the gazette notification issued on Wednesday.
