Requirements traceability is the ability to follow and audit the life of a requirement, in both a forward and backward direction; from its origins, through its realization in the design and functional specifications, to its eventual development and deployment and use, through subsequent rounds of modification and refinement.

If a requirement is changed or modified, using a requirements traceability matrix the analyst can identify those areas within the functional specifications that are impacted by the requirement and make the appropriate modifications.  In addition, the analyst can determine if the portion of the specification being modified traces back to any other requirements.  This is important to ensure that the new modification doesn’t break any existing requirements within the system.

Similarly, sections of the specification can be traced to areas of the physical code to ensure that all required changes are made during the development process.  Test cases can also be traced back to functional specifications.  When functional specifications are changed test cases nearly always need to be updated to ensure complete and accurate testing can take place.