Audit trail
What an audit trail is in an advisory context, why books-and-records rules require one, and what makes a research audit trail defensible.
AdvisorIQ ·
Definition
Audit trail —
A chronological, tamper-evident record of actions and decisions — who did what, when, and based on what information — that can be reconstructed and produced on demand.
In an advisory practice, the audit trail is how you answer "where did this come from?" after the fact. Books-and-records rules require it: SEC Rule 204-2 obligates RIAs to make and keep records relating to their advisory business (broker-dealers have a parallel rule, SEA Rule 17a-4). Rule 204-2 also requires that electronically stored records be safeguarded against loss or alteration — i.e., the trail has to be tamper-resistant, not just present.
What a research audit trail should capture
When AI is part of the research workflow, a defensible trail records:
- The query that was asked
- The answer that was produced
- The sources each claim was drawn from (citations)
- A timestamp, retained for the required period
Why it matters
An answer with no trail is an unattributed assertion. The same answer with a logged, sourced, timestamped trail is something you can defend to an examiner in under a minute. AdvisorIQ logs every interaction this way and lets you export the trail for SEC/FINRA retention.