Auditing Blockchain: An Introduction for Internal Auditors

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What is blockchain?
It’s a protocol that allows entities to store and share transactional information in a controlled and systematic way.

While blockchain may be the next step in the digital evolution, specific implementations of the technology are still susceptible to risk. This will call for internal audit to play a pivotal role, not only in providing traditional assurance but also acting as a trusted business advisor in anticipating and evaluating these new and emerging risks. Our three-part series is designed to help internal auditors fulfill this role. Take a look at Parts 1 and 2 below and stay tuned for our third and final installment.

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To launch our three-part series, we introduce internal auditors to the fundamentals of distributed ledger technology, how blockchains work, key features, and types of blockchains. We also examine new concepts, such as smart contracts, tokens, initial coin offerings (ICOs), and cryptocurrencies.

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In our second installment, we apply an internal audit lens to risk considerations when implementing blockchain technology. As the third line of defense, an internal audit is entrusted with the responsibility of providing the board and its management with comprehensive assurance while maintaining its independence and objectivity within the organization. These considerations are brought to life through a fictitious example of a pre-implementation review of a blockchain-based solution.

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Come back for our final installment to learn what makes auditing in a blockchain environment unique.

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Deloitte helps companies worldwide explore every aspect of blockchain and build tailored solutions designed to deliver value. Through our ecosystem for education, ideation, strategy, prototyping, and development, clients are able to harness the opportunities and capabilities that blockchain technology provides. Learn more about Deloitte’s insights on blockchain, as well as the services we offer.

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