| 1. | Accounting. the process or an instance of cross-referring each bookkeeping entry to its source in order to facilitate checking its accuracy. |
| 2. | Computers. a track of a particular item of output data back through the processing steps that produced it to the corresponding input data. |
Audit Trail
A step-by-step record by which accounting data can be traced to their source. The SEC and NYSE will use this method for the explicit reconstruction of trades when there are questions as to the validity or accuracy of an accounting figure.
Investopedia Commentary
This is the technique used to track improper market activity. By documenting and analyzing all houses and brokers involved in specific trades, those who follow the audit trail can (hopefully) identify the culprit.
Related Links
Introduction to Fundamental Analysis
Cooking The Books 101
Off-Balance-Sheet Entities: The Good, The Bad And The Ugly
Defining Illegal Insider Trading
Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street
See also: Accounting, Audit, Broker, Cook the Books, Cookie Jar Accounting, Insider Trading, Opinion Shopping, SEC
audit trail