Audit Trail (Edit Log) Mandatory in India from 1st April 2023

ERPNext India Compliance
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The Ministry of Corporate Affairs (MCA) issued a notification to make Audit Trail (Edit Log) feature a mandatory requirement in an accounting software from 1st April 2023.

According to the notification, all the businesses who are using accounting software for maintaining books of accounts should have an audit trail feature comprising of the following:

  • Create edit log of each and every transaction with changes made in the books of account
  • Capture the date details when such changes (edits) are made,
  • Software to ensure that the edit trail cannot be disabled.

Many major accounting softwares available in India like TallyPrime, BUSY, Zoho Books etc have implemented the feature.

ERPNext has similar implementation, but in ERPNext “Track Changes” can be disabled, and the requirement suggests that the audit trail cannot be disabled. Also, deleted documents or transactions should also be recorded along with their edit log.

Here are some references for read:
Key Requirements of the Audit Trail (Edit Log)
TallyPrime Audit Trail Feature

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@snv and @Smit_Vora I greatly appreciate the efforts put by you and your team into developing the India Compliance App.

Can you please share your views on Audit Trail feature being a requirement from 1st April 2023, is your team working on the feature or the current versioning system in ERPNext is fine for compliance.

Thank You.

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Most of the features are already available, except for

  • This is currently configurable. We plan to work on this in India Compliance App.
  • (Optional) We can capture the reason for cancelling the document for a few doctypes.

We likely plan to enforce an audit trail for all the users of India Compliance. However, this can be disabled from a site config or something similar.