5 tips to prepare for your AML/CFT audit
5 tips to prepare for your AML/CFT audit
22 MAR 2023
As a reporting entity your Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) audit is essential as it ensures your business is compliant with the laws and regulations to prevent money laundering and terrorist financing. An audit can be a daunting process, but with proper preparation it can be an effective tool to ensure your business is meeting regulatory requirements.
Here are our top 5 tips to prepare for an AML audit:
1. Review your AML risk assessment
It is important to review your risk assessment before an audit as it will help you identify areas of high risk and take appropriate measures to mitigate those risks. Risk assessments should be conducted at least annually (unless your business changes or you bring on new products which should trigger a review), and the results should be used to update your policies and procedures. Read our next article for more information about AML risk assessments.
2. Review and update AML/CFT policies and procedures
The next step is to review and update your policies and procedures to ensure they are up to date and in line with the latest regulatory requirements. This includes making sure they are specific to your businesses risk profile and are being followed and implemented effectively.
3. Train employees
All employees should be trained on your businesses AML/CFT policies and procedures, and they should be aware of their roles and responsibilities in preventing money laundering and terrorist financing. Training should be conducted regularly, and records should be kept documenting the training.
4. Conduct internal reviews
Internal reviews are an effective way to identify any gaps in your AML/CFT programme before an external audit. Internal reviews should be conducted at least annually and should be designed to test the effectiveness of your policies and procedures. Most importantly use the results of internal reviews to update your policies and procedures.
5. Prepare documentation
Documentation is an essential part of an AML/CFT audit. Make sure all relevant documentation is up to date, accurate, and readily available. This includes documentation related to customer due diligence, transaction monitoring, and suspicious activity reporting. By now you should also have a system in place to store and manage the documentation, making it easily accessible to auditors.
Our team is here to help so please get in touch if you have any questions or need help preparing for your next audit.