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What is an Audit Trail?
A reliable and clear audit trail indicates that a firm has superior internal controls and also forms the basis of objectivity in an audit.
Audit trail: the processAn audit trail includes a chronological account of steps that were completed in order to bring a transaction from order to completion.
This trail can be easy to follow or it can be incredibly complex – depending on the amount of steps that are necessary with the transaction. Following an audit trail for an invoice issued by a vendor, for example, would likely be a relatively simple process.
Often, an audit trail starts at the receipt of the invoice, and then follows it through Accounts payable, and at last ends with the check or electronic payment that was issued.
Audit trails may include more steps and be hard to follow however. This depends entirely on the company and the transaction.
Audit trails: management toolsAudit trails can be used as efficient tools for managing a company’s finances and other resources.
They are a good way to find out if a comapany's transactions are being conducted seamlessly and honestly, while also remaining as short and efficient as possible.
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