Govt extends implementation of mandatory audit trail of companies' accounts till Apr 1, 2022

The government has extended till April 1, 2022, the date for implementation of rule making it mandatory for companies using accounting software for maintaining their books to use software that allows to record audit trail of each and every transaction.

The rule was to come into force from April 1, 2021. However, in a notification on Thursday, the Ministry of Corporate Affairs extended the implementation till April 1, 2022.

"In the Companies (Accounts) Rules, 2014, in proviso to sub-rule (1) of rule 3, for the figures, letters and words "1st day of April, 2021", the figures, letters and words "1st day of April, 2022" shall be substituted," it said.

Also read: Govt tells companies to use software to record audit trail of each transaction

Earlier on March 24, the Ministry of Corporate Affairs had issued a notification making it mandatory for the companies to record audit trail of each and every financial transaction done on their accounting software.

Experts had said the move will help curb back-dating of transactions. "This change will disincentivise the backdating of entries in books of accounts and ensure that the corporate sector maintains books of accounts in true and correct manner," said CA Rajat Mohan, partner, AMRG and Associates.

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