Enhancing Anti-Money Laundering Audit Effectiveness

This document is a best practice paper aimed at enhancing the effectiveness of anti-money laundering (AML) and countering the financing of terrorism (CFT) audits for banks. It outlines key baseline standards and best practices that internal and external auditors should consider when determining the appropriate scope and extent of testing in AML/CFT audits. The paper compiles practices from the Anti-Money Laundering Audit Peer Group (AAPG) members and incorporates feedback from a benchmarking survey conducted in 2023. The survey focused on various aspects of audit practice, including audit coverage, approach, and the use of data analytics to improve audit effectiveness. The document details several focus areas for auditors, such as risk assessment, training, collaboration with third parties, and the nature of work performed by external audit firms. It emphasizes the importance of adopting baseline standards and best practices to mitigate risks associated with money laundering and terrorism financing.