As a nonprofit accounting software provider, we receive an endless number of questions every year related to what you should look for in an accounting software solution. Understandably, many nonprofit and governmental organizations focus primarily on a solution’s reporting features and less on other capabilities. While having a solution capable of creating exceptional financial reports is important, having a solution with a good audit trail is even more essential. Both nonprofit and governmental organizations are required to adhere to strict financial reporting rules and regulations, and – in order to protect their reputation and organization – they need to have systems in place to safeguard not only their finances but their financial data as well.
Why Does Having a Good Audit Trail Matter?
To define it simply, an audit trail is a record of the operations made during the bookkeeping process. It documents each transaction, calculation, and change made during the financial accounting process so you or an auditor can clearly trace how you got from A to B. Keeping an audit trail is always a good idea, especially in a time where financial accountability expectations remain high. For nonprofit organizations especially, maintaining good audit trails can determine the overall financial fate of the organization.
Many of today’s computer-based accounting systems recognize the importance of audit trails and provide nonprofit organizations with the ability to clearly map the sequence of events involved in the recording and accounting process. In addition to the record-keeping benefits, investing in a fund accounting solution with audit trail capabilities is essential to safeguarding your organization against fraud and theft. Because the system tracks every change made in financial data, you can easily determine when funds are missing or something just doesn’t seem “right”.
When your organization is audited, you will be expected to have a good audit trail in place. Nonprofit and governmental organizations are required to meet a stringent set of expectations during the auditing process, including being able to provide a detailed record of all donations and prove how those funds were used. If your organization relies heavily on grants for financial funding, an audit is a yearly guarantee. You will need a nonprofit accounting software solution that enables you to verify every step of a transaction (from the source document to every related record and report). Without such a system, your organization will have a difficult time finishing the audit unscathed.
Maintain a Good Audit Trail with Abila MIP Fund Accounting
Did you know that Abila MIP Fund Accounting contains specialized audit trail features designed to help you keep a comprehensive log of every transaction processed, activity performed, and system change made within the software? It contains System and Organization audit trails, Advanced Organization audit trails, and Transaction audit trails in order to ensure the accuracy and validity of every one of your transactions. We’ve provided a summary of how you can go about accessing these audit trail features below:
- System and Organization Audit Trail
At a system level, having a thorough and accurate audit trail is important. System audits maintain compliance and credibility across your organization by tracking and logging any and all changed made to the Abila MIP Fund Accounting system. You can view this information by going to the Administration Module, clicking on Security, and selecting Manage Audit Trails and System Audit. This will give you all of the information you need regarding any modifications, edits or additions to your organization’s financial data. It will also provide you with a detailed view of who accessed the system and when, allowing you to easily identify who made changes to the system.As a best practice to maintaining internal controls, it’s also a good idea to identify and analyze changes made at an organizational level. To view this information, all you have to do is launch the Administration Module, click on Security, select Manage Audit Trails and choose Summary Organization Audit. This will provide you with a thorough history of the maintenance items in the accounting and administration menu.
- Advanced Organization Audit Trail
During an audit, you will need to be able to easily identify errors and/or suspicious activity. With Abila MIP Fund Accounting software, you can do this easily with the Advanced Security Module. The software allows you to keep track of all modifications made to key records in the system so as to prevent fraudulent activity from occurring. Users can also view detailed information about these changes, including what the previous value was and what the new values are in the system.
- Individual Transaction Audit Trail
This feature makes it easy for you to examine detailed accounting records at length. The software provides a transaction audit trail that includes important details such as transaction source, document number, check numbers, effective dates, session number, and the like. Users can access this data using a variety of standard reports built directly into the MIP Fund Accounting software.
If you need help accessing these important audit trail features in Abila MIP Fund Accounting, do not hesitate to give us a call today. We’d be more than happy to help you identify ways to protect your financial data and organization’s credibility. If you are not using MIP Fund Accounting but would like to learn more, contact us today.