In a relief for businesses across the spectrum, the government has extended the deadline for the mandatory adoption of accounting software that has an audit trail of every transaction and has a function to store change logs.
In accordance with a new notification from the Ministry of Commercial Affairs (MCA), the implementation of the mandatory use of accounting software with an audit trail, in accordance with provision 3 of the rules on companies (accounts ), 2014 has been postponed to March 31, 2022.
The changes had previously been proposed to be implemented from April 1, 2021. But after receiving several representations from various stakeholders expressing their inability to make rapid changes to accounting software, the government decided to give it one more year. to companies to prepare for the new accounting system which aims to control manipulations and guarantee the greatest transparency in the recording of transactions.
The new MCA notification (Rule 3 enterprises [Accounts] Rules, 2014) now reads as follows: Account books and other relevant books and documents kept electronically should remain accessible in India in order to be usable for future reference.
Provided that for the fiscal year beginning on or after April 1, 2022, each company that uses accounting software to keep its books of account, only uses that accounting software which has a function of recording the track of ” auditing each transaction, creating a change log of each change made to the books of account with the date on which those changes were made and ensuring that the audit trail cannot be turned off.
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