Audit trail

An audit trail is the sequence of records that shows how a transaction got into the books. It starts with the source document, such as a receipt or an invoice, and follows every step after it: who entered it, who coded it, who approved it, when it was exported and which journal entry it became.

What makes a trail useful

An auditor or a tax officer should be able to pick any line in the general ledger and walk back to the original document without asking anyone. They should also be able to go the other way, picking a receipt and finding where it landed. When either direction breaks, for example because a receipt was keyed in by hand with no image attached, the transaction is supported by someone's memory rather than by evidence.

Logged changes, not silent ones

Every change needs a timestamp and a name. If an expense is recoded from meals to office supplies, the trail should show both the old and the new value and who made the switch. Systems that let users overwrite records without a history make the books easier to tidy and much harder to defend.

Audit trails also support internal controls. They show that the person who approved a payment was not the person who created the supplier, which is what segregation of duties depends on.