04 Jun 19 Part 1: Why an Effective Audit Trail is so Important
Why an Effective Audit Trail is so Important
One of the most valuable assets in an organization is data; most organizations store a lot of data, from spreadsheets to databases, the collection and maintenance of data never ends.
For many organizations, the data stored in their enterprise applications is critical to every aspect of the day to day running of the business; this may be data relating to purchasing, payables, financials, shipping, manufacturing…etc; the list goes on and on.
Accountability is essential in today’s climate of corporate governance and regulation. All organizations need the ability to be able to account for the state of all of their sensitive and critical data at any time.
So how do you provide this sort of accountability of change?
All organizations need to maintain an audit trail.
What exactly is an Audit Trail?
Simply put, an audit trail is a chronological record of change.
Creating an audit trail is just a case of ensuring that whenever something is changed, a record of the change is stored; then later, you can look back in time and see a full history of what was changed, by whom and when.
During an audit, the auditor (internal or external) may ask for evidence that you are correctly following your change management processes, or they may ask for evidence that you know who has changed something and when.
Without an audit trail in place, you are not able to provide this kind of information. This can lead to audits taking far longer than is desired and you may find you fail an audit due to having weak internal controls in place.
Good Internal Control
An audit trail allows you to backtrack through a sequence of data events to its origination and should as a minimum include the following…
- What type of event it was (i.e. the creation of data, the change of data or the removal of data)
- Who initiated the event
- When the event took place
- The value before the event
- The value after the event
It is generally recognized that a well-managed audit trail is a key indicator of a good internal control environment.
Benefits of an Effective Audit Trail
There are many benefits to having an audit trail in place, some of these are…
- Help satisfy both internal and external auditors
- Provide accountability of what users are doing
- Help with compliance requirements
- Help ensure data integrity and accuracy
- Allows quality assurance over your change management processes
- Help you identify abnormal scenarios
- Can aid in the forensic analysis of data to reconstruct a sequence of events
- Acts as a good mitigating control when dealing with other types of internal controls such as access control (i.e. Segregation of Duties)
Without an effective audit trail in place, you have very little visibility of change and so all of the above benefits become problems that you will struggle overcome.
Challenges When Creating an Audit Trail
While the concept of creating an audit trail is simple, in practice it can be a little more difficult; here are some of the challenges you might face when trying to build an effective audit trail…
- Your ERP software does not include the tools you need
- Not knowing what needs to be audited
- If you audit too much, you will suffer from audit overkill, which makes it hard to work with and you may have data growth issues
- If you audit too little, your audit trail will not be effective
In this series of articles, we will be covering each of the above challenges.
Want to know how we can help you build an effective audit trail for Oracle EBS? Get in touch today and ask us about CS*Audit.
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The next article in this series is “What should we audit“.
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