Importance Of Independent AML Audit In A Company

What is an independent AML audit?

An independent AML audit is the investigation carried out on your company or organization’s anti-money laundering systems. An independent AML audit is not the same as a financial audit, but more of a test carried out by a neutral body to evaluate whether your company’s AML and anti-terrorist financing policies, controls, and procedures are up to date, comply with the laws and regulations, and are running appropriately.

Who needs to carry out an independent AML audit?

The laws and regulations make it mandatory for businesses, companies, or firms to carry out independent audits of the adequacy and effectiveness of their AML policies, controls, and procedures where appropriate to the nature and size of the company. If your company has more high-risk matters or high-risk clients, the more likely it is that independent audits should be done.

How Frequently Do Independent AML Audits Need to be Carried Out?

It is recommended that conducting of independent audits should be done at regular intervals, i.e. annually. This should be together with ensuring they’re carried out at regular intervals, it may be important to perform broad or more targeted audits when there have been changes to the practice’s risk profile, structure, or services provided since the former audit was carried out.

Companies or organizations should keep a record of all audits and these should be made available to supervisors as requested.

What are the Importance of Carrying Out Independent AML Audits?

  • They provide the business with an objective, fair view of their status about the effectiveness of their AML/CFT strategy, policies, and procedures.
  • The systematic, report provides informed and practical recommendations that the business will put into place for further compliance
  • The procedure of carrying out regular independent audits can advance the firm’s reputation with clients, investors, and regulators
  • Insights and recommendations from the independent audit can be integrated into the firm’s processes and procedures, to raise awareness among staff and throughout the firm, thus helping to optimize the business
  • With usual audits being carried out, firms can ensure that any drawbacks in their AML/CTF strategy are detected and dealt with in due time before being found out in a regulatory examination, and thereby avoiding any needless fines or reputational damage.

What Should Be Checked for During the Independent Audit

An independent AML audit will be evaluating whether the firm’s AML policies, controls, strategies, and procedures are up to date, are in compliance with the regulations, and performing satisfactorily. Future audits could include a statement on the firm’s progress in terms of implementing any recommendations in the past audit, and how well such recommendations were put into practice. Additionally, businesses must undertake screening of relevant employees at both the pre-employment stage and on an ongoing basis.

Conclusion

A regular independent audit is highly encouraged for businesses as it helps them stay compliant and avoid any unnecessary fine. You can contact us for a free consultation as we have the expertise needed to help you stay compliant with the latest AML laws and regulations.

We provide legal advice in the Middle East, Asia, Africa, the United Kingdom, and India on family law, property law, intellectual property, company formation, and a host of others.

We at eLegal Consultants look forward to meeting you and are ready to journey with you to achieve your dreams. Contact us today.

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