Whenever a business transaction is done, some kind of information is stored in the form of a physical document. This document can later be of huge help for the business and will also help the management in the various business functions such as Auditing. These documents which would prove and document the various transactions made by the business are known as an Audit Trail.
Many a time the management of a business faces problems during an audit as the various important documents of the transactions is not available to prove the legitimacy of a transaction made. This can cause a hindrance in the audit process for a business. The management should take care of this aspect of the business and if necessary avail the assistance of a reputed financial firm that will record all the transactions made by the business.
The Advantages of Audit Trail
It is very important for the management of the business to maintain an Audit Trail so that it faces no problem in the future and the maintenance of the audit trail can also help during the audit of the company. The various advantages of maintaining an Audit Trail for a business are mentioned below:
- Helping in maintaining Accuracy
One of the biggest advantages of maintaining an audit trail is that it will help the management in maintaining a degree of accuracy by providing the correct information about the transactions in the duration. It is important for the management to know about the various metrics of the transaction such as quantity, price, timing etc. Such information will help the management to understand the current situation and will also allow it to create a plan for the future.
- Assisting in the Audit process
Conducting an audit for the company is very important. An audit will provide the management with all the necessary details about the company and will assist the management to create a future plan. But this future plan can only be correctly created if all the information in possession by the management is correct. An audit trail will help in this matter.
There are various documents that should be maintained in order to maintain a proper Audit trail. These documents include the following:
- Various Correspondences
- Purchase orders
- Receipts, etc.
- Detection of Fraud
An audit trail will help the management in tracking the various accounting transactions and will help in making sure that all the transactions are correct. The audit trails will greatly reduce the time taken during the audit of the business as all the necessary information will be quickly available. An audit trail will also help in the prevention of any fraudulent activity in the business.
- Promotes judicious use of resources
With all the information of the transactions, the management will understand which department or activity of the business requires more resources and which requires less. This will allow the business to keep a check on the number of resources utilized by the business and will prevent overuse of the resources. This will keep the cost incurred by the business at an optimum level which will, in turn, help the profitability of the business.
- Allows for proper attention to the required department of the Business
With the presence of all the necessary information about the company, the management will be able to take decisions in a proper manner and will be able to focus its attention on a specific department or business activity. The judicious use of the resources of the business will lend a hand in increasing the efficiency and profitability of the company.
These are some of the advantages of maintaining an audit trail for a business. We can see that these advantages can affect the business in a huge way. This is why it is advisable that the management should avail the assistance of a financial firm that will take every precaution while maintaining all the transactional records of the business. If you are looking for such a financial firm in the UAE for your business then JAXA Chartered Accountants can be a great fit for your business.
JAXA chartered Accountants is an ISO certified financial firm that aims to provide the best possible services to a business. The experts at Jaxa will first understand the business and then provide a customized solution to the business problem. For more details on the services provided by JAXA, feel free to Contact Us. We will be happy to assist you.