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Govt defers mandatory use of transparent accounting software use by year

This comes as relief to businesses across the spectrum

Accounting | software | accounting firms

IANS  |  New Delhi 

ICDS, Accounting

In a relief to businesses across the spectrum, the government has extended deadline for mandatory adoption of having audit trail of each and every transaction and having feature to store logs of edits.

As per a new notification by the Ministry of Corporate Affairs (MCA), implementation of mandatory use of having Audit Trail as provided under proviso to Rule 3 of the (Accounts) Rules, 2014 has been deferred till March 31, 2022.

The changes were earlier proposed to be implemented from April 1, 2021. But after receiving several representations from various stakeholders expressing their inability to make quick changes in software, the government decided to give one more year to businesses to prepare for new accounting system that aims to check manipulation and ensure utmost transparency in recording transactions.

The new MCA notification (Rule 3[1] of the [Accounts] Rules, 2014) now reads: the books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference.

Provided that for the financial year commencing on or after the 1st day of April, 2022, every company which uses accounting 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, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.



(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Sat, April 03 2021. 13:46 IST