What is the purpose of a security audit in reason to smart contracts?

The primary purpose of a security audit for smart contracts is to protect investors’ funds by

identifying vulnerabilities, coding errors, and weaknesses in the smart contract or underlying

protocol that could be exploited. This proactive approach helps prevent hacks, exploits, and financial

loss.

While performance issues (B) may be noted, the critical concern is security. Identifying bad actors (C)

is not within the scope of a code audit but is a broader operational issue. Copyright concerns (A) are

unrelated.

AML and crypto governance frameworks underline the importance of security audits to mitigate

operational risks in DeFi and other smart contract-based applications.