Smart contracts are lines of code specifying a certain set of rules or conditions that a blockchain protocol must follow. In smart contracts, there are codes specifying a particular outcome when predetermined conditions are met. These contracts allow various parties to come to an agreement quickly, accurately, and without any data tampering using blockchain technology. No third party involvement is required and the two parties can reach an agreement with the help of the smart contracts.
Just like every traditional agreement must undergo an audit, smart contracts also have to undergo a regular code audit which is referred to as a smart contract audit. A smart contract audit involves a thorough investigation of the code and the flaws present in the same before it is made public. Since smart contracts are self-executing code, they must be thoroughly audited to find any critical vulnerability before the launch of the code. Certain steps involved in a smart contract audit are agreeing on specification, testing, executing automated symbolic execution tools, analyzing the code manually, and report generation. Once a smart contract passes all these steps, it is made public for the contributors in the blockchain system to follow.