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Govt Defers Implementation Of Mandatory Use Of Transparent Accounting Software Till Next Year
Representative image of a man using a desktop computer in India (PUNIT PARANJPE/AFP/Getty Images)
In a relief to businesses across the spectrum, the government has extended deadline for mandatory adoption of accounting software having audit trail of each and every transaction and having feature to store logs of edits.
As per a new notification by the Ministry of Corporate Affairs (MCA), implementation of mandatory use of accounting software having Audit Trail as provided under proviso to Rule 3 of the Companies (Accounts) Rules, 2014 has been deferred till 31 March 2022.
The changes were earlier proposed to be implemented from 1 April 2021. But after receiving several representations from various stakeholders expressing their inability to make quick changes in accounting software, the government decided to give one more year to businesses to prepare for new accounting system that aims to check manipulation and ensure utmost transparency in recording transactions.
The new MCA notification (Rule 3[1] of the Companies [Accounts] Rules, 2014) now reads: the books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference.
Provided that for the financial year commencing on or after the 1st day of April, 2022, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)
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