Digital Signature
May 10, 2023
What is a Document Audit Trail and Why is It Important?

The term audit trail” were mentioned once or twice as you read through our site. If you’re confused about what exactly that is and how it can help secure your digital signatures and documents, this is the article for you.

In this post, we’ll define what it is by first determining just what an audit is and what it’s used for. Next, we’ll discuss the applications that makes digital audit trails of documents possible. Then we’ll walk through its benefits for a company’s documentation and why it’s essential for ensuring the authenticity and legality of digital signatures.

Let’s start by answering the question: what exactly is an audit trail?

What is an audit trail?

In business, an audit is the inspection of various accounts followed by physical checking of inventory, done to ensure the accuracy of the organization’s financial statements and records.

For example, if the income statement of a company says that a dozen units of a particular stock item were sold on a specific date, the amount left of that item on the company’s inventory should reflect the change. This is just one basic example, but audits of a company often span the entirety of the business processes and financial statements, accounting for all that the company does in a certain amount of time.

On the other hand, an audit trail is a set of records that, when taken together, provide documentary evidence of all the actions undertaken in a process. The trail is what auditors refer to when they want to trace original transactions to or from their related reports.

In our example earlier, once the company has sold a dozen units of a product, it issues a receipt and takes a record of that sale. The receipt is date- and time-stamped, such that anyone who looks at it knows when the sale was made, which branch made the sale, who the cashier was, and other details regarding the sale. Now, say that the business’ accountant forgot to take the sale into account when making the company’s financial records. When the inventory is checked, the count of items in stock doesn’t match the accountant’s records. Rather than panic and fear that something has been stolen, all they have to do is check for undocumented receipts. Once they find the receipt for the twelve units, they can account for the discrepancy in their numbers.

Audit trails work in much the same way. Though the above is a very simplified retelling, hopefully just by reading it you can gain an idea of why audit trails are so important.

What is a digital audit trail?

In the case of technology, digital audit trail in a software application documents the activity of every user on a particular document, site, or program. It takes note of changes, approvals, dates and times, IP addresses, logins, and any other necessary details. Because audit trails can track the transactions, actions and processes taking place as well as the accounts and details of who does them, they are also referred to when verifying that these activities took place.

All audit trails can serve as legal tools to present proof of a transaction’s history, and a digital audit trail in an application makes it possible for even digital processes to be verified and proven in court.

Why is digital audit trail important for companies like Twala?

Digital signature companies like Twala need to make sure that signed documents are secure, binding and can stand as real, legal pieces of evidence when used in court.

Because so many of our clients use digital signatures for contracts and other important documents, we utilize digital audit trail to keep track of all the changes made to files in our system. This way, every time a change is made, it is recorded along with every important detail of the action. This adds credibility and integrity to the entire document signing process. 

How does Twala’s digital audit trail keep clients like you safe?

Our digital audit trail feature takes note of all stages of the process you undertake when creating, sending, receiving, and signing a digital document.

The document is digitally time-stamped using an immutable ledger technology as proof of its existence, so no one can say that the agreement never took place. Any tampering or altering before and after the document is signed is automatically recorded, so you know if either party has made moves to change stipulations or amend clauses post-signing. This record serves as proof even in a court of law, and in all legal settings.

Twala also meets the requirements of eSignatures in the Philippines, including the e-Commerce Law and the Supreme Court’s Rules on Electronic Evidence. We do all we can to ensure that your important documents are secure, reliable and tamper-proof.

Key Takeaway

In this article, we’ve discussed the basics of digital audit trails as a main feature of an electronic signature application in the hopes that you better understand what it is, how it’s used, and why it’s important.

If you’re interested in knowing more about how Twala works, you can check out our Features page to see how our platform keeps your documents secure. And if you have other questions about our digital signature software, contact us or book a free demo. We’re always happy to hear from you!

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