Why your accounting software now needs an edit log
Accounting software has always allowed entries to be edited. The requirement that those edits be recorded — with what changed, when and by whom, and with the log itself protected from being switched off — is a small technical change and a significant change in how books can be maintained.
2 min readOadbox
What the requirement is asking for
Three things, in substance: that each transaction change is recorded, that the record cannot be disabled, and that it is preserved for the retention period applicable to the books themselves.
It applies to companies within its scope and is reported on by the auditor, which means it is checked rather than assumed.
The practical consequences
Backdating an entry, silently correcting a previous period, or reusing a voucher number all become visible. So does the more common and more innocent version: a clerk fixing a typo in a posted entry six weeks later.
- Corrections should be made by reversal and re-entry, not by editing history.
- Period locking after close becomes a discipline rather than a preference.
- Every user needs their own login — shared logins make the log meaningless.
- The log needs to survive backup and restore, and be readable on demand.
It is a useful control even where it is not required
Businesses outside the scope of the requirement still benefit. The most common internal fraud in a small business is a modified entry rather than a fabricated one, and the log is the cheapest detective control available.
It also settles arguments. A great deal of month-end investigation is really an attempt to reconstruct who changed what, which the log answers in seconds.
Applicability and reporting requirements depend on the entity type and the period concerned. Confirm scope with your auditor.
Written by the Oadbox team. Something here not match how it works in your business? We would genuinely like to hear it — connect@oadbox.com.