How important are audit trails for your company?

How important are audit trails for your company?

An audit trail (also called audit log) is a relevant chronological recording of actions, a set of files, or destination of a collection of records that represent a sequence of successive activities or events within an operational environment, a procedure or any other process.

This step by step recording of the executed events or other sets of documents or decisions can be significant during audits, complaints, lawsuits, but also when fraud or internal fraud needs to be exposed.

By formalizing decisive actions, audit logs allow making a reconciliation from the moment an event or activity is created or revised, to the final archiving or delivery in case that this is needed.

What is an audit trail in practice ?
Why is an audit trail so important to set up among your business processes and decisions?

Ex-post checks and evaluation allow some pertinent questions that would enable companies to check the correct implementation of systems and to make adjustments.

This operational control gives comfort to the management that a proactive approach contributes to fewer errors and complaints.
If the change can be perfectly assigned to the user, it facilitates the searches when necessary.

Having audit logs also demonstrates the maturity of the company and its processes.
For many different considerations - customer satisfaction, regulatory compliance, supervisory control, external audits,... - it is essential to be able to justify your company operations and to show that your business ethics and norms are duly followed.

- Financial records but also subsequently KYC profiles, MiFID classifications, AML Risk scorings...
- Screening results with date of search (time stamp)
- Notification of receipt of mail during awareness campaigns
- AML testing
- Proof of 4eyes principles
- IT access and validity
- Accesses to user platforms (in case en employee changes to another department)
- All kinds of other data
What are the different types of audit trail?

How to build an audit trail?
For financial institutions, gladly, the old method of safe manual archiving of critical documentation is in declain. Nowadays tracking methodologies run either through stand-alone data with common desktop utilities or centralised management systems.

By using central workflow tools it is easier to build these audit trails into a process-driven environment. It also allows you to simplify reporting and perform checks. The use of data and metadata in these processes becomes extremely important.

When using Office Suite applications such as Excel and Access, the possibility to build in an audit trail, access rules and four eyes principle exists as much as amidst further digitized environments.

  • 1.

    Automatically saved or back-up available;

  • 2.

    Journal sequences (by date and hour);

  • 3.

    Limited access rights;

  • 4.

    Edit or write access ex-post limited to a number of well defined persons (no override abilities);

  • 5.

    exceptional handling report (why was there a request for changing the record); and

  • 6.

    alert to the final responsible if a change occurs (as well for corrupted data and failing of the system).

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