What can audit trails be used for in financial systems?

An audit trail is a comprehensive record that logs all the transactions and changes made within a financial system. By tracing financial transactions, the audit trail provides a clear and detailed history that is crucial for accountability. This mechanism allows organizations to track the flow of funds, verify the authenticity of transactions, and ensure compliance with regulatory standards. It also enhances transparency, enabling auditors and management to review financial data systematically, ensuring that the company's financial practices are sound and that any discrepancies can be quickly identified.

The other options, while important in their own contexts, do not relate directly to the specific function of audit trails. Evaluating loan applications requires assessment criteria that focus on creditworthiness and financial stability rather than tracking transactional history. Forecasting future financial results involved predictive analytics and modeling instead of tracing past transactions. Regulating company hiring practices pertains to HR policies and compliance, which is unrelated to the financial transaction tracking that audit trails provide. Thus, the ability of audit trails to offer accountability through transaction tracing is their primary function in financial systems.