Balmori Software Inc.

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Photo: Sharon McCutcheon

Audit trails are crucial to the running of any enterprise. Any accounting app, regardless of country of origin, regardless of software author, needs to ensure the integrity of the audit trail before anything else. It's a rock-bottom requirement of any competent accounting system.

Why a rock-bottom requirement? An "audit trail" ensures that all assertions in all financial reports are traceable back to their original source documents. An "assertion in a financial report" is any document number, peso amount, date, name, address, or narrative explanation that you see on any report.

Auditors, managers, government regulators, and tax authorities require absolute consistency of data all the way down the line, from the basic transaction to the assertions in the reports that they get.

Managers base big financial decisions on these reports; and so they want the reports to reflect the actual truth.

(We refer here to reports such as outstanding receivables/payables, sales/purchases, collections/disbursements, inventory levels, input/output VAT, taxes withheld by payors and from payees, etc.).

Preserving the audit trail prevents casual after-the-fact changes to any detail of a transaction. This is the same as saying it prevents discrepancies between source documents and the reports that aggregate the information that resides in the source documents.

Any discrepancies or inconsistencies would create confusion, would waste many man-hours in the organization's subsequent efforts to reconcile them, and would potentially lead to bad business decisions.

And this is why there is a posting (aka finalizing) procedure in a well-designed business app. The posting procedure "locks" the facts, as it were, so that they are always mutually consistent backwards and forwards.

In software design terms, "locking the facts" means not allowing edits once the transactions have been posted.



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