Govt Defers Mandatory Use Of Transparent Accounting Software Use By Year

In a relief to businesses across the spectrum, the government has extended deadline for mandatory adoption of accounting software having audit trail of each and every transaction and having feature to store logs of edits.

As per a new notification by the Ministry of Corporate Affairs (MCA), implementation of mandatory use of accounting software having Audit Trail as provided under proviso to Rule 3 of the Companies (Accounts) Rules, 2014 has been deferred till March 31, 2022.

The changes were earlier proposed to be implemented from April 1, 2021. But after receiving several representations from various stakeholders expressing their inability to make quick changes in accounting software, the government decided to give one more year to businesses to prepare for new accounting system that aims to check manipulation and ensure utmost transparency in recording transactions.

The new MCA notification (Rule 3[1] of the Companies [Accounts] Rules, 2014) now reads: the books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference.

Provided that for the financial year commencing on or after the 1st day of April, 2022, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording 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.

--IANS

sn/sdr/

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor