Glossary
Audit & Controls

Audit Trail

By: Alec Hollingsworth
Updated:  
June 16, 2025

DEFINITION:

An audit trail is a detailed record of all transactions and changes in an accounting system, showing who did what and when.
An audit trail is a chronological record that tracks each transaction and change made in an accounting system, including who performed the action, what was changed, and when it occurred. This documentation enables organizations to trace the origin and flow of funds, ensuring all financial activities are transparent and verifiable. Audit trails are essential for supporting internal controls, detecting errors or fraud, and simplifying external financial audits. By providing a detailed log of all entries and modifications, audit trails help nonprofit organizations maintain accountability and comply with regulatory requirements.

Key Takeaways

  • Provides a chronological record of transactions and changes
  • Supports accountability and transparency
  • Facilitates error detection and fraud prevention
  • Essential for compliance and audit readiness

Why It Matters

Audit trails ensure transparency and accountability, supporting compliance and protecting against fraud or errors.

Real World Example

A nonprofit receives a grant and records the deposit in its accounting software. Later, an expense is logged to purchase supplies for a project. Months later, during an audit, the auditor requests documentation for the grant and related expenses. The finance team uses the audit trail to show exactly when the grant was deposited, who recorded the transaction, and each subsequent expense related to the project. The audit trail’s detailed history helps the organization quickly and accurately answer the auditor’s questions, demonstrating compliance and sound financial management.

How Aplos Helps

Within Aplos, every transaction and system change is recorded to provide a reliable audit trail. Users can review detailed logs of financial activity, making it easy to track and verify actions within the platform. Aplos audit trails help organizations prepare for audits and maintain trust with stakeholders by ensuring accountability.
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Frequently Asked Questions

What information does an audit trail include?

An audit trail includes details such as the date and time of each transaction, the user who made the change, and the specific actions or edits performed.

Why are audit trails important for nonprofits?

Audit trails help nonprofits demonstrate transparency, maintain accountability, and comply with regulations or grant requirements during audits.

How does Aplos support audit trails?

Aplos automatically logs every transaction and change in the system, providing organizations with a detailed, accessible audit trail for all financial activities.

Related Terms

Segregation of Duties
IRS Form 990
Strategic Plan
Mid-Year Reforecast
Stewardship
UBIT (Unrelated Business Income Tax)

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