Blockchain brought about the potential for improved data reliability, but only when that data is the result of transactions that happen completely within a blockchain. The reliability ofblockchain data is threatened when information is introduced from the outside world, such as when oracles are used to observe occurrences and provide this information to smart contracts.This specific threat to the reliability of blockchain data is known as the oracle problem. This study offers a working definition of blockchain oracles and argues that they should be viewed asservice organizations under the auditing standards from the AICPA and PCAOB. The study then discusses risks associated with the oracle's function of collecting, storing, transforming, andtransmitting information, and proposes control objectives for auditors to consider when evaluating the information provided by oracles. Finally, the study closes by discussing open questions the audit profession still needs to address with the oracle problem.
Research Article| June 22 2020
Auditing the Blockchain Oracle Problem
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Mark D. Sheldon; Auditing the Blockchain Oracle Problem. Journal of Information Systems doi: https://doi.org/10.2308/ISYS-19-049
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