“The audit trail” is the visible means whereby the auditor may trace a business transaction through all the stages in which if features in the records of the business. For example, sequentially numbered copy sales invoices would normally be listed in a register or daybook and subsequently filed either in numerical or chronological sequence. In either case, it would be possible, by reference to the number of the date, to trace a particular invoice from the day book to the original on file or vice versa.
Developments in computer technology have resulted in substantial increases in the speed and ease by which data may be processed. Consequently there is a strong disincentive to leaving a visible trail or record of all information which has been processed (even though this would enable the auditor to perform his tasks, as it were, “around” the computer) since this necessitates the use of a line printer and other peripheral equipment which, by contrast with the speed of computer itself, is extremely slow. Thus, instead of the creation of comprehensive “hard copy” which was prevalent with first- and second-generation computers, management have come to rely heavily on reporting by exception and such reliance is inevitably complementary to the loss of the audit trail.