An audit trail provides basic information to backtrack through the entire trail of events to its origin, usually the original creation of the record. This may include user activities, access to data, login attempts, administrator activities, or automated system activities.
Audit records contain elements defined by the company which include:. Some audit trails look more closely at actions within certain applications to chronicle more than a simple system or application launch. These logs can pinpoint elements such as specific changes to a database or information contained therein, and can also detect improper web-browsing or email use.
Many IT departments have more than one audit trail that can be system-, application-, or event-defined. Highlighting abnormal activities or use deemed "out of the ordinary" can initiate an investigation. An accurate and well-defined audit trail provides the evidence to find answers and solve issues. Long term maintenance of audit logs can prove difficult for many organizations because the logs can occupy extensive storage space that may not be readily available.
However, if possible, maintain the audit trail for the life of the records. These can be extremely useful in historical reporting and solving problems in the future.
IT Audit Trails are constructed to address numerous activities that make up an event or series of events that can be investigated to find areas of concern. Problem activities include security breaches from hackers, in-house or out-of-house authentication problems, unauthorized usage, unusual levels of activity, or system failures. Records include the automated events scheduled through the operating system OS , network access, application events, and manual activities of the various users.
Normal activity may include accessing applications and system authentication. However, when an unusual or abnormal use is detected such as large-scale data change, application failures, or unauthorized access, the system provides means to follow a trail to identify the problem and then remediate.
Other unusual activity that could arise may be inconsistent patterns of activity by users, attempts to bypass systems or protocols, large scale changes to the information, and unusual internet activity. The National Institute of Standards and Technology NIST promotes conducting a periodic review using a timeline that is appropriate for the security needs of the company.
Each industry and organization will vary with their review plans, but regulations may dictate a specific time frame in which logs must be reviewed. For example, if you have an audit committee involved with your business, they may define a regularly scheduled review, such as bi-annually or annually.
The need to support compliance, security, and operations is found in most if not all industries. The laws that both mandate and regulate the use of electronic records make audit records an important element in defending against security breaches, supporting compliance reporting, and ultimately passing numerous kinds of internal and external audits.
Industries that have provisions to track information integrity include government agencies and universities who maintain sensitive, confidential information, and any company that uses electronic records containing confidential information.
Each industry, whether tracking records or transactions, will benefit from maintaining accurate audit logs. Industry uses of audit trails include:. To that end, there is a growing need for industries as well as government and educational agencies to maintain and provide accurate and auditable information. If an organization is utilizing a database management system to manage records, chances are high that they record audit trails.
As previously mentioned, audit trails are commonly managed by staff within the IT department, such as a security manager or network administrator. A key point to keep in mind is that any user, whether a manager, employee, end-user, legal staff, an accountant, or others who touch an electronic record, will be included in the audit trail of the record.
The ability to follow records back to their origin provides numerous benefits, including transparency and a defense of records for compliance, record integrity and accuracy, system protection from misuse or harm, and security of sensitive or vital information.
Required Audit Trail System Features Audit trails are primarily used to ensure the integrity of electronic records. All audit trails must be: Available Audit trails must be maintained in such a way to ensure they're always available to regulators in a format that can be copied and reviewed.
Automated Audit trail entries cannot be manually updated by users. Archived All audit trails must be kept as long as their corresponding electronic records are required to be stored.
Traceable Each entry must be attributable to the person who directly entered the record. Contemporaneous Each entry must be time stamped using a controlled clock system which cannot be changed.
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Privacy Policy. In accounting, an audit trail is used to trace back to source records or transactions like accounting entries creating financial information in the sequence of events. In software and data security, real-time audit logs record real-time sequential user and system activities with a timestamp as events and changes to system records occur.
The purpose of an audit trail is to reduce errors, fraudulent activities, and unauthorized system access, improve internal controls, and verify the accuracy of underlying accounting transactions flowing to financial statements. Barbara is currently a financial writer working with successful B2B businesses, including SaaS companies.
She is a former CFO for fast-growing tech companies and has Deloitte audit experience. We've paired this article with a comprehensive guide to accounts payable. Get your copy of the Accounts Payable Survival Guide! Get the FREE guide. What is an Audit Trail? If there is a dispute from a patient regarding a breach of contract, a health provider needs to make certain that there is evidence to back up the assertion that HIPAA laws weren't breached.
For these reasons, it's essential to preserve documentation for the entire active life of the activity. Most businesses maintain records for more than two years to protect themselves from future investigations.
Companies can also use audit reports to gain insight into business activities and make better decisions in the future. Keeping historical evidence on-hand can help pinpoint bottlenecks or inefficiencies that plagued the business and decreased innovation.
For example, a manager may use an audit trail report to analyze financial records and see which factors led to a decrease in sales. Regular reporting by using historical data can help prepare for future events and circumstances.
It's been determined that audit trail reports serve an important purpose and provide a way for businesses to protect themselves. Audit trail reports are also used for- 1. Searching for Lost Transactions There are many reasons why a business may want to find a lost or old transaction. Or maybe a restaurant manager is suspicious of a server who consistently generates large tips on very small bills.
Whatever the reason, the ability to find a transaction is of paramount importance to every organization. Accounting software that holds audit trail reports has functionality that tells the steps needed to find a lost transaction. Even if a user only has the date of the transaction or knows the person who performed it, it is typically enough information to find it. By reviewing logs for a day or specific person and correlating them to the transactions management already has evidence of, the user can find the misplaced one.
Detecting Fraud An audit log trail is helpful to uncover theft or fraud in a business. Business intelligence software can record all of the various data behind each event or change at the moment it was entered into the system and records the metadata regarding those who have made a change or edited a transaction. Therefore, an audit report can verify the employee who used the system to illegally change something and commit fraud.
This data is useful as evidence in case management needs to terminate an employee who committed fraud. Investigators may ask for audit log trails if a case such as this goes to court and businesses need to prepare themselves for this possibility.
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