SAP Knowledge Base Article

3042258 - Maintenance of audit trail - Statutory Requirement - 1st April 2023

Component: XX-CSC-IN-SD (use FI-LOC-SD-IN), Version: 3, Released On: 31.10.2022

Symptom
The Ministry for Corporate Affairs in India has recently published a rule for all the Indian corporates that they need to ensure correct and compliant audit trail in their accounting
software for each and every transaction, creating a log for each change ensuring that the audit trail cannot be disabled for the financial year starting April 1st 2021 or later ammended
to April 1st 2023(Refer the attachments).

Environment
SAP ERP
SAP enhancement package for SAP ERP
SAP enhancement package for SAP ERP, version for SAP HANA
SAP S/4HANA

Resolution
The Ministry for Corporate Affairs in India has recently published a rule for all the Indian corporates that they need to ensure correct and compliant audit trail in their accounting
software for each and every transaction, creating a log for each change for the financial year starting April 1st 2021 or later the rule is amended to April 1st 2023(Refer the
attachment).

SAP software provides a full audit trail, logging and evaluating all changed data in the system. Accounting documents are recorded for all business transactions. To ensure a
comprehensive audit trail, SAP provides the following standard functionality:

No posting without a document – A posting document or journal entry must be stored in the system for every transaction. Each posting document carries the document
date, a time stamp, as well as information about the user who has posted this document.
Changes to posting documents – A posting document cannot be changed, but additional information can be added, such as a reference or a comment. Again, these
additions are tracked. To reverse a posting, a new document including all audit-relevant data is created.
Unique identification of a posting – An accounting document is identified by the company code, the document number, and the fiscal year.
Authorization concept – A detailed authorization concept for the company can be set up to ensure that only authorized users can make document postings.
Consistency checks – The system verifies whether the balance of debits and credits is zero, and also determines whether all mandatory fields are filled.
General Ledger account master data – SAP provides a standard functionality to display changes in General Ledger Account Master Data, to keep control of all changes.
Transport of changes – Configuration in the production system cannot be changed directly, instead the configurations are transported to the production system from the
development system for ECC and S/4HANA On Premise and for S/4HANA Cloud from the Quality system through the Transport Requests. These Transport Requests are
used further to track the changes of the configurations performed in the Production system.

To provide evidence of strong Internal Controls being implemented and operating, SAP Financial Compliance Management can be used for documenting the necessary controls
environment, monitoring inconsistencies in operating procedures or policy; anything factually wrong; potential fraud; illegal activity; and demonstrating adoption of best practices
across financial and operational processes.

To find more information, please check help for S/4HANA On premise here and S/4HANA Cloud here and learn more about the journal entries. To know more information on how
to Display Journal Entry Changes, refer this link.

SAP had delivered reporting solutions to file GST reporting(eg:GSTR1, GSTR3B, ITC04, GSTR6 and GSTR9) which are licensed separately. The solutions are SAP Digital
Compliance Services (DCS) for India and SAP Advanced Compliance Reporting (ACR) . Details are available for DCS here and ACR scope by country which is available for
S/4HANA On premise here and S/4HANA Cloud here.

Keywords
Audit Trail, April 1st 2023, India, Government, Maintenance of audit trail, 2021, 2022

Products

Products

SAP ERP Central Component all versions

SAP ERP all versions

SAP S/4HANA all versions

SAP enhancement package for SAP ERP all versions

SAP enhancement package for SAP ERP, version for SAP HANA all versions

This document refers to

SAP Note/KBA Title

Display Journal Entry Changes

DCS

ACR

S/4Hana Cloud
 S4Hana OP

This document is referenced by

SAP Note/KBA Title

Attachments

File Name File Size Mime Type

AccountsAmendmentRules_01042021.pdf 1576 application/pdf

MCA extends Audit Trail Date to April 1, 2023 & CSR-2 to 31.05.2022- taxguru.in.pdf 59 application/pdf