Question

You are assigned in the Audit Department of an international company and you
are asked to prepare an audit plan for money laundering compliance of its
international affiliates.
Prepare a report for the Audit Committee on:
- How you structure such a plan
- What are the challenges you face

Sources:
- Sid Valluri (2016), “Challenges in implementing effective AML
compliance and internal audit programs in a global enterprise”,
ACAMS.
- Thomas Alessandro (2016), “How audit departments can develop an
effective AML program”, ACAMS
- Other articles may be consulted.

Answer 1

Combating money laundering, Terrorist Financing and fraud has become an area of increasing focus for governments and regulators across the world.

A 5 step plan for money laundering compliance-

1) Detection of Suspecious Activities: The first step is detecting suspicious activity. Having systems in place for prompt detection of activities associated with money laundering.

2) Risk Assessment

3) Internal Controls: Internal controls are policies designed to mitigate the risks of money laundering and support compliance.

4) Anti Money Laundering Compliance Training Programme: This step is to ensure that employees are familiar with AML legislation, including their roles and obligations. An ideal AML training program is interactive and done regularly.

5) Independent Audit: An independent audit is simply a thorough review of the company’s risk assessment and compliance program by an independent auditor. The audit is needed to provide the organization with a clear outline of issues requiring urgent attention to ensure regulations are complied with.

Challenges faced in building Money laundering compliance:

1) Timeline pressure.

2) Limited resource with competing priorities.

3) Limited availability of data.

4) Complicated process and technology.