This article is based on a Jade ThirdEye Spotlight on AML podcast, which featured AML/CFT auditing specialist Martin Dilly, who spoke on AML Programme Audits, Independent Reviews, and Assurance.
What does a good AML audit or independent review look like?
A New Zealand audit needs to cover off all obligations under the AML/CFT Act as stated. It will differ slightly in Australia, but the principle is the same. The key thing many people miss is that a good audit or review should leave the reporting entity in a better place than before the audit.
A successful AML audit should make your AML/CTF programme stronger
After an audit, you should have a pretty clear understanding of how well you are meeting your AML/CFT obligations. The audit should also flag any areas that need improving, plus some recommendations for how you might go about achieving that. Of course, the auditor can't pick up the pencil and rewrite your AML/CFT programme for you, but they should certainly point you in the direction of the sort of things that could be done to fix the issues.
And I think that's a bit that lot of times people go through an audit process and or review process, and they don't feel they get that. I've often had a client come back to me and say:
"I've received an audit report from someone - I don't understand what it's telling me. I don’t understand what's wrong or how it's telling me to fix it!"
Good AML audits should be easily understood at first sight
I think that's always an essential piece for any auditors or people who do reviews out there that read this is that make sure that your client, the reporting entity, understands the report. Preferably, they understand it on the day, so you don't have to go back after afterwards and re-explain what you've already written.
Productive AML audits mean you can make changes on your terms
One final point on good audits is that having an independent auditor review your programme, documents, processes, etc., will show you whether or not you are meeting all your AML obligations. If, for some reason, you are not, the audit will often enable to you front-foot any issues, more-or-less in a timeframe that suits you. However, if a supervisor picks any errors up, you are generally on their timeframes straight away.
Martin Dilly is an AML auditor advisor, who has consulted full time as an AML/CFT specialist since 2012. Martin has assisted hundreds of entities across every sector through the provision of audit consulting and training services in New Zealand, Australia, Samoa, and Vanuatu.