The Companies Act 2013 requires companies to maintain an audit trail of transactions and events that occur within the organization. The audit trail must be maintained in electronic form and must be secured with appropriate controls to prevent unauthorized access.
As of 01.04.2023, there are no specific changes to the audit trail requirements under the Companies Act 2013. However, companies must ensure that their audit trail is compliant with the latest regulations and standards.
The audit trail should include all significant transactions and events that occur within the organization, including financial transactions, system access logs, and any changes made to key data. The audit trail should also include details such as the date and time of each transaction, the individuals involved, and any approvals or authorizations that were required.
The Companies Act 2013 also requires companies to retain their audit trail for a minimum period of eight years. During this time, the audit trail must be accessible and readily available for inspection by authorized parties, such as auditors, regulatory authorities, or law enforcement agencies.
The penalty for non-compliance under Section 134 can range from a fine of up to Rs. 25,00,000 to imprisonment for up to three years, or both. Additionally, the company may also face reputational damage, loss of business opportunities, and legal liabilities.
In addition to the penalties under Section 134, non-compliance with the audit trail requirements can also result in penalties under other sections of the Companies Act 2013, such as Section 447, which deals with fraud. In summary, companies must ensure that their audit trail is comprehensive, accurate, and secure, and that it meets all the requirements set out in the Companies Act 2013. By doing so, companies can help to ensure transparency, accountability, and compliance with applicable laws and regulations.