Definition ∞ Continuous auditing involves the real-time or near real-time examination of financial or operational data to identify anomalies, control weaknesses, or potential risks. This method uses automated tools and analytics to monitor transactions and system processes without interruption. It offers immediate feedback on compliance and performance, contrasting with traditional periodic audits. This approach significantly enhances oversight and the timely detection of issues.
Context ∞ The immutable and transparent nature of blockchain transactions makes continuous auditing particularly suitable for digital asset platforms and smart contracts. Regulators and users seek greater assurance regarding the integrity of decentralized finance (DeFi) protocols and stablecoin reserves. Implementing continuous auditing can bolster trust and regulatory compliance by providing ongoing verification of digital asset movements and protocol operations.