To date, the review of smart contracts is still a relatively new field. Due to the recent introduction of blockchain, its management is still unstructured, with not only different accounting firms but also different departments having their own approach to dealing with it. This leads to the assumption that inefficiencies can occur during the review process of smart contracts. Therefore, the objective of this paper is to capture and analyze the present situation of smart contracts in the audit and assurance environment.

There is little existing research and thus an exploratory research method was used to address the research questions. Building on the initial literature review, expert interviews were conducted to generate a deeper understanding. Based on the interviews, a gap analysis was conducted using the organizational, employee, customer, technical and regulatory perspectives. On the basis of the gap analysis, a qualitative risk analysis about the subject was conducted, the overall potential of smart contracts was compared and assessed and recommendations for the contractual party were elaborated.

We concluded that many aspects about the use of smart contracts remain uncertain. This is because although diverse projects and applications are happening, they still remain largely insignificant to the companies’ revenue streams. However, the relevance of smart contracts for accounting firms is still relatively small. Accounting firms consequently have still no internal or external guidance on how to deal with smart contracts, leading to a rather unstructured approach. To date, code review line by line is the prevailing method used to examine smart contracts. Concerning the audit, some accounting companies limit the audit procedure on the explanation of the client how the controls are implemented. Regarding customers’ demand for assurance services, opinions are divided whether there is a need or not. The gap analysis showed that many issues depend on the need for either broader applications or for clearer instructions. As smart contracts are a new technology, many risks were detected, which must be considered. The potential of smart contracts was identified as vast. However, further development and broad application will likely require years and much cooperation between companies.