The Public Company Accounting Oversight Board (PCAOB) Auditing Standard (AS) 1010, Training and Proficiency of the Independent Auditor, requires that audits be performed by people having adequate technical training and proficiency. However, the bar of “technical training and proficiency” has gone up significantly with the advent of blockchain or distributed ledger technology and especially its use cases pertaining to smart contracts and decentralized autonomous organizations (DAO). Though the pace of the change in smaller organizations is slow, there has been a widespread adoption of these use cases in larger organizations.
This article focuses not only on the audit of the data stored on the blockchain, but also the audit of the blockchain itself. This is an important distinction because, in the former case, CPA auditors can be less concerned about the quality and quantity of audit evidence obtained due to the immutability and enhanced security of the blockchain. Data stored on the blockchain may even be more accurate and complete compared to the data obtained from traditional databases. Also, in the former case, unfamiliarity with blockchain technology will not necessarily hinder…
