Actions for non followung audit trail

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we are a company, if we won't follow audit trail from 1 april, what action kay he taken? any penalty or anyhing?
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As per Companies Act 2013, an audit trail refers to a step-by-step record that shows how a transaction has been processed, from its origin to its final form. The Companies Act 2013 requires every company to maintain proper books of accounts with respect to transactions made by the company. The act also requires that the books of accounts be maintained in such a way that they are able to provide an audit trail of each and every transaction.

The audit trail should include the following information:

The date of the transaction
The descripttion of the transaction
The amount of the transaction
The party to the transaction
The mode of payment
The authorization of the transaction
The approval of the transaction
The recording of the transaction in the books of accounts
The posting of the transaction in the ledger
The preparation of financial statements based on the transactions

The penalty for non-compliance with the audit trail requirements under the Companies Act 2013 can range from INR 25,000 to INR 5 lakh, depending on the nature and extent of the violation. Additionally, the company may be required to rectify any deficiencies in its financial reporting and may face legal consequences if the non-compliance is deemed to be intentional or fraudulent.

Q. What will be the consequences if Audit trail not maintained ? 

-> This will be violation of section 128 and a penalty of minimum 50 thousand to Maximum 5 Lakhs could be imposed.
 

If a company fails to follow the audit trail requirements as mandated by the Companies Act 2013, they may face penalties ranging from INR 25,000 to INR 5 lakh, depending on the severity of the violation. The company may also be required to rectify any deficiencies in its financial reporting and could face legal consequences if the non-compliance is considered intentional or fraudulent.

 

 


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