Audit Trail

Tax Glossary Definition

Audit Trail

Audit Trail – A sequential record documenting all transactions and system activities within an organization’s financial or information environment. It serves as evidence for verifying data accuracy, identifying discrepancies or fraudulent actions, and tracing the source and flow of financial information to ensure compliance and accountability.

Example: An auditor examines the audit trail of invoices and payment entries to verify that each transaction was duly authorized and properly recorded.

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