An audit trail
A)provides the means to check the accuracy and validity of ledger postings.
B)is provided by the ledger and the general journal.
C)is automatically created in every computer-based information system.
D)is a characteristic of interest.

Question

Quizplus · Accepted Answer

An audit trail is a record or trail of transactions that provides evidence of the validity and accuracy of ledger postings. It is created to help auditors trace transactions from their source to their end. The purpose of an audit trail is to ensure that there is a documented, chronological record of business events that can be used to verify the accuracy and completeness of financial statements. The ledger and the general journal are part of the accounting system that provides information for the audit trail. The audit trail is not automatically created in every computer-based information system, but it can be designed to be created. An audit trail is not a characteristic of interest, but it is an essential requirement for financial reporting, regulatory compliance, and internal control purposes.

An Audit Trail