Regardless of your industry, data leakage happens everywhere. Cyber threats, security breaches, data scraping, or theft are just a few examples of potential security attacks within an organization. Now is the time to apply a straightforward but often underutilized tool – the audit trail.
Electronic storage and data handling have revolutionized many markets within the technology sector, such as financial institutions, insurance, manufacturing, and healthcare. However, these same tools that have made workload more efficient have also left many companies vulnerable. The reason is that most or all of their data is now located in one place.
This article answers the question, “what is an audit trail?” We also dive into the benefits, specific industries that rely on audit trails, and examples.
Defining an Audit Trail
An audit trail or log is a sequential record that details the transaction history, work event, financial ledger entry, or other data traced back to the user who performed the act. The purpose of this tracking is to construct evidence for regulators in cases of suspected fraud or illegal financial activity.
Audit trails are used in accounting if an auditor needs to verify figures such as revenue, gross profit, and cost of goods sold (COGS). COGS is confirmed by reviewing the transaction logs captured at the time of record creation, alteration, or deletion carried out during the period.
Below is a sample of FINSYNC’s audit log. This report allows users to see a chronological list of changes to their financial management records. Any human user or system that updates a record or accesses the records becomes part of the complete audit trail.
These individual data references are what an audit trail tracks and records sequentially to verify accuracy. A business can easily set up an audit log process to quickly identify improperly accessed information.
Implementing an audit trail is often a regulatory requirement in many financial sectors and accounting best practices. Without the use of audit logs to confirm financial information, there would be no ability to reference the legitimacy of a company’s financial reports.
The healthcare industry is considered one of the early adopters of audit logs. Hospitals and clinics must abide by HIPAA guidelines to protect patient confidentiality. Therefore, audit trails and logs are vital to accurately track who has access to a patient’s private information.
Healthcare audit trails also assist the insurance industry. Suppose a patient experienced a medical mistake such as a medication error, delay in treatment, missed follow-up, or inadequate patient monitoring. In that case, these are just a few examples of data that would be important for an insurance company to track to determine what part of the process led to the mistake.
Another industry where audit trails proved very useful is cryptocurrency. Cryptocurrency spoofing is the process where criminals attempt to influence the price of a digital currency by creating fake orders. The object of the con is to trick investors into buying or selling so that cryptocurrency value is adjusted. Spoofing is highly illegal and traceable, thanks to audit logs.
Benefits of an Audit Trail
Audit trails are highly beneficial for organizations that manage sensitive customer information. These companies are held to the highest confidentiality standards to prevent cybercrimes and illegal scraping of critical data.
While many businesses employ software security tools such as firewalls, antivirus software, and encrypted password managers, these tools tend to focus on external attacks. However, current statistics show that over one-third of all security breaches reside internally.
Additionally, a data audit trail can help an organization recover data and return it to its original state. Software logs that track a data history change will sometimes allow you to revert to a previous state, and this tool is vital if critical data is lost.
With cybercrimes becoming more widespread, integrating an audit trail is the most effective step to ensure data protection. By incorporating this tool, an organization can prevent data theft before it causes irreparable damage.
Try out FINSYNC’s Complete Solution, and you will be well on your way to creating audit trail coverage in your organization.