An audit trail is a step by step recording of the process by which financial transactions occurred. It allows one to trace funds from the point of origin, through handling and storage, to its final destination.
As a money services business it is important to have processes in place to allow you to trace the flow of cash and other financial assets. This helps to identify and control risk and to prevent losses.
Some questions to consider:
- How is currency delivered to or removed from your business and recorded on the books reflecting balances on hand?
- How is access to the store safe or vault controlled and documented?
- How is accountability for multiple cash drawers maintained?
Tracking the flow of funds into and out of a money services business is critical. Resolving discrepancies in balances is much easier if all transactions have been properly documented and there is an audit trail to identify the point of loss and accountability. Without that audit trail, determining the cause of a shortage and who caused it can be extremely difficult and sometimes impossible.
Having records and processes that provide a good audit trail can also help to prove the value of a loss and may help to expedite settlement of a claim (for a covered incident in excess of deductibles).