Definition

An Audit Trail is the chronological record of all financial transactions within a business, used to verify accounting accuracy and compliance during FTA or financial audits.

Key points

• Must include invoice numbers, dates, supplier and customer details, and transaction references.
• Essential for VAT, Corporate Tax, and financial reporting.
• Businesses must retain audit trails for at least five years (or seven for real estate).

Practical example

An auditor requests the audit trail for a company’s Q1 VAT return to confirm that every VAT amount matches the original invoices and receipts.

Why it matters

Strong audit trails build transparency, prevent fraud, and protect businesses during FTA inspections.