In order to mitigate the chances of fraudulent transactions or manipulation in the books of accounts of the company and to bring in more transparency, the Ministry of Corporate Affairs (MCA), by virtue of notification no.G.S.R. 205(E) dated 24th March 2021, requires the companies to comply with using the accounting software which has a feature of recording the audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled. However, the applicability of such amendment was later deferred for one year vide notification dated 1st April 2021, G.S.R. 247(E). Hence, the amendment is effective from the financial year commencing on or after 1st April 2022.
CA Nikhil Kumar