It is very easy to lose track of documents within a company especially when many users are involved. In paper based documents it is even easier to lose track of the documents as files are collected and not returned to their respective place or the files are just forgotten on the desks making it hard to trace on whose desk the file has been left on. Accountability also can become an issue because it is hard to determine who delayed the approval process. In some organizations they are forced to deploy somebody to follow up on the said documents to ensure it is approved by all the designated parties. This can happen when the document has to pass through a number of approval stages. These challenges can be eliminated if the documents are digitized and an appropriate document management system is in place to be able to track the documents movement and pinpoint where it is and what is being done with it at every point. The audit trails becomes an essential part of the document movement
What is an audit trail in document management?
This is a verifiable tracking of document movements across different transactional levels of a company. Thus it makes it easy for a document’s history to be traced from the initial stage of creation to any altercation done on the document either in terms of editing, approving and transacting.
Audit trail in document management is date and time oriented and gives a different level of accountability to persons handling that specific document, reducing loopholes such as a document lying in one position without any specific action taking place.
This would also enable an increase in productivity because of the level of improvement on the accountability part. One is able to track where the document has reached electronically without the tedious manual following up of the whereabouts of an important document. Audit trail works best in certain areas such as financial transactions, work events, product development and other areas where multiple numbers of people are involved.
In the healthcare industry audit trail is able to track access to patients medical information and any updates made therein.
In the financial industry audit trail would reveal and uncover any information in relation to customer’s transactions and compliance and any changes that are done therein and if there are any questions with regards to the accuracy and validity of the information.
How does an audit trail work in document management?
When it comes to a full audit trail with regard to a financial transaction,it will show the full execution of a specific execution for example it will reveal a time stamp revealing the seller, the purchaser, time of sale,location of sale and records key details of the transaction and processes which can be reviewed later.Audit trail can be for a simple process and also for a complex process.
Audit trail can be as simple as a retail purchase where a receipt is given when an item is purchased or as complicated as a mortgage payment where audit trail is used to verify the source of funding for a down payment for a home by a home buyer. Financial regulators can use audit trails to examine brokerage firms when there is suspicious market activity.
Why is the audit trail important in document management?
To track back any irregularities and process breakdowns if and when they happen It is important for businesses to maintain a complete and comprehensive audit trail. An airtight audit trail can help businesses identify internal fraud by keeping track of the different users and the actions they take with regard to the company’s data and information.
Audit trait can also help track external data breaches issues. Malware and ransomware are on the rise and having an audit trail enables monitoring, identifying and flagging down outsiders who are up to no good. This improves the businesses information security capabilities.
Audit trail also function as a compliance tool in that it enables control and function of user access and versioning,maintains privacy settings that can be tracked and adjusted to the standard requirements
Who uses an audit trail in document management?
Audit trails are used by staff, managers, accountants, legal teams and others but managed by the IT department who takes care of the electronic records but they are also part of the audit trail as the initiators of the process.
The IT department updates and makes changes to the audit trail thus being part of it.
Which industries use audit trails in document management?
Most industries can use audit trail to maintain control in operations, for compliance and information security. Audit trail controls internal and external security breaches and protects against internal fraud. Maintains compliance for internal and external audits. Examples of industries where audit trail could be necessary include financial and accounting, healthcare and medical information, manufacturing and product design,It tracking and data, digital content management systems. Sales records
Audit trails in financial industry
In the financial industry prioritizing of compliance, customer data and information security and a complete audit trail is necessary subject to regulatory audit and external reviews.
Audit trail in Healthcare
In healthcare protecting patient health information and when and how it can be disclosed is very important.This outlaws disclosure without the patient’s knowledge.Audit trails and patient’s logs are needed to track who has access to a patient’s medical records, when the information was accessed, who accessed it and why. Audit trail provides visibility to this information and captures related date and time.
Audit trail in manufacturing industry
In the manufacturing industry, an audit trail is crucial in quality control. Customers want to know that their suppliers are paying adequate attention to the goods being manufactured, thus keeping an eye on the production process is a very important and crucial part of manufacturing.
An audit trail will ensure that the products are of good quality and have not been compromised anywhere in the process. Audit trail would also speed up the production process as every stage is monitored in real time thus improving efficiency across board. Accessing customer records, orders, deliveries and timelines is effortless.
This would also reduce complaints and returns as the audit trail is able to establish where there is a loophole in the process when a complaint occurs and also users are able to determine deadlines before they are bypassed.
An example of an audit trail in the manufacturing industry is when a purchase order is received from the customers, which then passes through a series of checkpoints within the organization to initiate production, inspection and finally delivery. Through the process anything can go wrong. Each step involves a number of approvals, deletions and additions, this are all important modifications made to the initial order and these are not made by just one person, they are made by many different persons involved in the production process. Audit trail is able to track this through versioning, log details and missed deadlines thus enabling corrections in real time.
Audit trail in construction industry
When handling projects in the construction industry whether big or small coordination with loads of documents and data shared, revised and updated. This involves a number of stakeholders from the architect to the engineers, the owner, the contractor, the subcontractors, the suppliers and the approval bodies. To minimize cost and losses, the audit trail becomes a crucial part of the project.
With an audit trail there is increased communication and collaboration. Increased accountability and protection incase of litigation.
Benefits of audit trail in document management
Prevention of fraud
With audit trail in document management, companies have better control of the movement of information. Record keeping of audit trail flags any information inconsistencies within the company. It eliminates internal fraud because the staff is more cautious of being found. External frauds are reduced by having control and defensive barriers this helps prevent cyber security barriers.
Flawless audits
Annual external audits are usually done for publicly held companies by third parties, Audit trail easens the process due to a compliant and properly kept records. With an audit trail, an auditor can quickly determine if the transactions are valid.This fastens the audit work and reduces audit fees and time.
Increased efficiency
With audit trail retrieving information and making it accessible is made easier saving the business time and improving efficiency.Using audit trail information can uncover historical records when they are required in details including date, time and transactional details.As audit trail captures all information regarding a transaction, and also captures all corrections made and keeps all the versioning saves the business time on more corrections and versioning.
Disaster recovery
In case of a disaster or a crisis the audit trail will cover up, it would be a reliable record of the prior business activities,costs,expenses and income. It acts for you like an insurance that can help you recover from a rather helpless situation. Have it backed up off premise incase of fire or flooding.
Loan positioning and investment
An audit trail makes it easy to track your financials and determines their accuracy making it easy to establish if you are eligible for a loan or if you are investor friendly.
Meeting compliance requirements
To stay ahead with compliance, an audit trail ensures this happens.This can help you avoid potential loss of business, lost contracts and increased costs because of fines.
Maintaining audit trail
Putting up policies with regard to audit trail will be crucial to ensure that there is strict adherence to the process.Creation of audit trails for all the workflows both existing and new is necessary and inputs and actions recorded for future reference.Creating, maintaining and managing a repository for these documentation is crucial for audit trails continuity.
Challenges in managing an audit trail in document management
These can come in terms of storage size, location, accessibility and storage timelines. If access is broad among team members its integrity can be compromised. Storage timelines should be based on the business cycle but if possible and storage space is not limited the records can be kept for so long.
Can audit trail work in paper based processes?
Many businesses keep a paper trail of all information and data. What if the paper document is misplaced or incorrectly kept. A detail missed can compromise the production or project or financial process depending on which process it is being applied.There maybe a failure to communicate, change orders or lose track of crucial documents.
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