Ministry of Corporate Affairs postpones implementation of Accounting Software up to FY 23.
The postponement of the rule, a senior government official said, is in view of the Covid situation in the country. “Giving a year’s time to companies will ensure better compliance,” he added
The ministry of corporate affairs (MCA) has given companies a year to implement its latest regulation which mandates the use of accounting software that records each and every transaction made by them. Companies will now have time till March 31, 2022 for deploying the software
Last month, the MCA directed all businesses using accounting software to maintain books of accounts to have audit trail features that includes recording audit trail and creating an edit log of each change made in the books of account along with the date when such change was made. Also the audit trail cannot be disabled.
The postponement of the rule, a senior government official said, is in view of the Covid situation in the country. “Giving a year’s time to companies will ensure better compliance”.
Most entities in the MSME sector do not have such software. Large companies already use such accounting software.
This will definitely bring in more transparency, compliance and its need cannot be stressed more. But with it certain challenges come forth such as genuine errors corrected will always remain in logs and increase burden on the companies and auditors. Such a software has to be hack-free and tamper-free where no one is able to manipulate the same.
Moreover, this software will be used by all companies as well and shall be cost effective. An increase in compliance cannot put an undue financial stress on the companies. The regulator should consider providing free or cost effective software to all which follow the necessary compliance. This change is good for regulators and auditors but it’s practical execution with the availability of such software at the ground level has to be seen.