Reengineering the Audit with Blockchain and Smart Contracts

Blockchain and smart contracts are evolving business practices by enhancing efficiencies and transparency in the value chain. The fusion of these innovations is also likely to transform auditing by automating workflows but more importantly, by enhancing audit effectiveness and reporting. This paper envisions the future financial statement audit by proposing an external audit blockchain that supports smart audit procedures. The external audit blockchain has the potential to improve audit quality and narrow the expectation gap between auditors, financial statement users, and regulatory bodies.