Ontology-Driven Audit Using the REA-Ontology

While blockchains are not yet ubiquitous in business practice, they are expected to serve as a platform to handle an increasing number of business transactions in a not-too-distant future. Smart contracts can be used to code and to enforce agreements between business parties. A significant difference between traditional and smart contracts is that once the actual events of the smart contract become part of a block in the blockchain, they are almost impossible to undo. Therefore, it is important that critical validity aspects of these smart contracts are explicitly represented. As smart contracts are software products too, it is therefore also critical that the coding of these critical validity aspects guarantees a faithful implementation of the validity checks. This paper suggests applying a combination of two approaches (i.e., ontology engineering and model-driven engineering) to the design and the implementation of smart contracts, in order to facilitate their audit through a clear separation of concerns. More precisely, this paper discusses the example of the REA ontology to provide the ontological commitment of the critical validity aspects of a contract, while MDE provides a tool to unambiguously translate the REA ontology’s contracting terms into a well-designed Smart Contract. This paper suggests that the resulting Smart Contract can support auditors’ assertions regarding exchanges between business partners and support the audit process