Question

Which statement below is true with regards to an audit trail?

A) An audit trail begins with the general journal.
B) An audit trail provides the means to check the accuracy and validity of ledger postings.
C) An audit trail is a summary of recorded transactions.
D) An audit trail is automatically created in every computer-based information system.

Answer 1

An audit trail provides the means to check the accuracy and validity of ledger postings by tracking and documenting every change made within a system.

Step-by-step explanation:

The correct statement with regards to an audit trail is B) An audit trail provides the means to check the accuracy and validity of ledger postings.

An audit trail is a chronological record that tracks and documents every change made within a system, such as financial transactions. It typically starts with the general ledger and provides a detailed history of each transaction, allowing auditors to trace the flow of information and verify its accuracy.

For example, in accounting, an audit trail can show the journey of a transaction from the initial entry in the general journal to the final posting in the general ledger. By following the audit trail, auditors can ensure that all transactions have been recorded correctly and in accordance with established accounting principles.