Question

In 175 words or more What is the definition of an audit trail? As a bookkeeper, while doing your investigation into the issue presented in the discussion prompt above, would an audit trail be relevant in this situation? why or why not?

Answer 1

An audit trail (also called audit log) is a security-relevant chronological record, set of records, and/or destination and source of records that provide documentary evidence of the sequence of activities that have affected at any time a specific operation, procedure, or event.

Audit trail has been well known concept for several decades especially in the field of accounting. In its essence the term audit trail boils down to the logs which describe the workings of the system. With these logs it becomes possible to audit the system, in other words to verify that everything has gone as intended. Furthermore it is possible to reconstruct the state of the system at the certain point in the past based on the audit trail

In simple terms it is a documentation of various activities from the inception of any transaction to the completion of any transaction.

For example, a for a sales transaction the audit trail will have the documentation as follows – Bids received for the goods, evaluation reports, selection reports, goods delivered documentation, buyers confirmation of goods received, payment request sent from an organization, payment received in the bank statement.

The study of audit trails suggests that frauds are abnormalities in the normal operation of the organization and thus they can be detected by searching for anomalies in the audit trail.

For a bookkeeper the audit trail will be important below for below mentioned purposes

Audit trail is useful for the below transactions.

Fraud Prevention

Payroll and Human Resources

Audits

Loan and Investor Documents

Source Documents