What is an audit trail?
An audit trail is the record that lets anyone follow a transaction from its source document through every step to the financial statements, and back again. In accounting software it is the log of who created, changed, approved or deleted each entry, when, and what the values were before and after, kept so it cannot be edited.
Also calledaudit logchange logtransaction history
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- Records
- Who, what, when, before and after
- Links
- Entries to source documents
- Category
- Audit
What an audit trail holds and why it matters
A complete trail has two parts. The document trail links each ledger entry to its evidence: the invoice, contract, receipt or bank line. The system log records user actions: creation, edits with old and new values, approvals, reversals and deletions, with a user name and time stamp. Auditors use both to test that entries are genuine and properly approved, and to select samples. Tax authorities expect businesses to keep records that support their returns, for six years in the UK for companies and generally three years or more in the US, with longer periods in some cases. Controls depend on the trail too: segregation of duties and approval limits mean little if changes can be made without a record. Cloud ledgers such as Xero, NetSuite and Sage Intacct keep a history on every transaction; close tools such as BlackLine and FloQast record preparer and reviewer sign-offs.
Common questions
Why is an audit trail important?+
It shows that each figure in the accounts is supported and was entered and approved by authorised people. Without it, errors and fraud are harder to detect and auditors have to do more testing.
Can an audit trail be edited or switched off?+
In well-controlled systems, no: the log is read-only and kept for the retention period. Systems where users can delete history, or where everyone shares one login, weaken the trail.
What is the difference between an audit trail and audit working papers?+
The audit trail belongs to the company's records and shows how transactions were processed. Working papers belong to the auditor and record the testing done on those records.
Software that keeps an audit trail
NetSuiteCloud ERP for mid-market companies outgrowing basic accounting.Profile →
Sage IntacctMulti-entity cloud financials with dimensional reporting.Profile →
XeroCloud accounting for small businesses with a large app ecosystem.Profile →
BlackLineEnterprise close automation for reconciliations and journal entries.Profile →
FloQastClose management software automating reconciliations for mid-market teams.Profile →
WorkivaClose data linked to filings and regulatory disclosures.Profile →Part of Accountio’s accounting technology coverage · Glossary
