The purpose of this research is to develop an algorithm for auditing innovative projects of smart cities. Publications in the Scopus and Web of Science databases served as the information basis for the research. The methodology of the research was a sequence of steps, including the analysis of previous studies and their systematization, the development of the authors' algorithm for auditing smart city projects, discussion of the strengths and weaknesses of the proposed algorithm. As a research result, the theoretical aspects of the audit procedure for innovative projects are considered, the approaches and methods used to implement the audit procedure for smart cities projects, the principles of smart cities audit are systematized. The paper shows the features of the audit procedure for smart cities projects and suggests the authors' algorithm for implementing this procedure. The results of this work can become the basis for further research in the field of audit of innovative projects of smart cities, as well as practical tools for carrying out already implemented initiatives in the field of digital transformation of the urban environment. The scientific novelty of the research lies in the development of the authors' algorithm for the innovative projects auditing, which allows for a more detailed analysis of the effectiveness of innovative projects, considering not only economic indicators, but also management decisions made during the project implementation. The importance of conducting such an analysis of innovative projects of smart cities lies in the fact that the effective development of Russian regions and the Russian economy as a whole depends on it. Currently, the economy of the Russian Federation needs modern methods of solving regional development problems. To audit smart city projects, involving a flexible approach to non-standard situations, a modern audit algorithm is to be used. This article present a modern and previously untested algorithm for auditing innovative projects.