An audit trail is a time-ordered record of who did what, when and to which record, including approvals and changes. In finance it links every reported figure back through the ledger and journals to the source documents, and shows who changed or approved each step.
What is an audit trail?
The term covers two related things. The first is traceability: a figure in the management accounts opens to the general ledger lines behind it, each line to its journal entry, and each journal to the invoice, contract or bank line that supports it. The second is the activity log: a record of every action in the system, such as creating, editing, approving, posting and deleting, with the person and the time.
Together they answer the two questions an auditor or a CFO asks about any number: where did it come from, and who touched it. A trail that can be edited afterwards answers neither with confidence, so the best ones only ever grow.
What should a good audit trail record?
| Element | Example |
|---|---|
| Who | The user, or the system job, that acted |
| What | Created a journal, changed a supplier’s bank details, approved a payment |
| When | The date and time, recorded by the system, not typed in |
| Which record | The journal, invoice or master-data record affected |
| Before and after | The old and new values when something was changed |
| Why | The reason or reference entered with the change |
| Approval | Who approved it, at which level of the approval matrix |
Three properties matter as much as the content. The trail is complete, so every action is logged, including by administrators. It is tamper-evident, so a changed or deleted entry can be detected. And it is kept and readable, so auditors can query and export it.
What does an audit trail show in practice?
Why does an audit trail matter for finance teams in the GCC?
Groups with several companies, shared service teams and outside auditors depend on being able to show who approved what, especially for payments, journals and changes to supplier bank details. The audit trail is also what makes segregation of duties checkable: it proves the preparer and the approver were different people. Record retention periods are set by law in each country; confirm yours with your adviser.
Questions people ask
Is an audit trail the same as an audit log?
An audit log is the system record of actions. The audit trail is the wider chain from a reported figure back to its source documents and approvals. A good audit log is one part of a good audit trail.
Can administrators edit an audit trail?
They should not be able to. A trail that a privileged user can alter quietly gives little assurance. Look for logs that only ever grow and can show whether an entry was changed.
How do auditors use the audit trail?
They pick reported figures and trace them down to source documents, and pick source documents and trace them up to the ledger. They also test the log for unusual activity, such as journals posted at odd times or by unexpected users.