As per MCA guidelines, w.e.f. 1st April;2023 every company which
uses accounting software for maintaining its books of account, shall only use a software that has a feature for recording audit trail of each and every transaction, creating an edit log of each change made in the books of accounts along with the date when such changes were made and ensuring that the audit trail cannot be disabled.”
Audit Trail refers to keeping record of all the activities related to each and every business transaction. Objective behind maintaining Audit trail is to track and discourage fraudulent changes in business related transactions and keep a check over data discrepancy.
Maintaining Audit Trail is:
 Mandatory and Applicable for Private Ltd. / Public Ltd.
 Not Applicable for Partnership firms, Sole Proprietorships, HUF etc.