Tips for Approaching Your AML/CFT Audit

The New Zealand AML/CFT ACT requires all reporting entities to complete an independent audit every two years. The audit obligation is a systematic check of a reporting entity’s AML/CFT programme that will assess how your programme is functioning in practice and whether the policies, procedures and controls in place are based on risks you have identified in your business.

Independent audits are an important obligation; they help ensure a reporting entity’s programme will play its part in the fight against financial crime – which is, after all, the goal of the Act, and an outcome that benefits all of us here in New Zealand and around the world. 

Of course, there is a cost to compliance; it takes time and effort to start, keep your programme up and running, and make sure it’s operating in the best possible way over time. And there’s a risk to non-compliance, in the form of fines, reputational damage, or worse.  

Successful AML programmes are effective: they are reliable, they reduce risk, they achieve their goals to help protect our communities without major cost or disruption to business success.  

Successful audits are much the same: they are fast and effective, which means you don’t spend more time and money than you need to achieve the best outcomes.  

Automation tools can improve the effectiveness of your AML programme, making it more operationally efficient, reliable, and resilient by replacing manual work and streamlining processes. 

Automation tools provide 5 key benefits for Reporting Entities with AML audit requirements: 

1. Audit history - Maintaining a full audit of all system activity and historical information about customers, transactions, accounts, alerts, actions, and decisions. This makes it easy to create a trail of evidence to demonstrate correct process (or incorrect!).   
2. Retention - All of this data is retained for a long period so it's still there for a 2 or 3 year audit period, and it’s just there when you need it. 
3. Data is easy to access - Data from these audit trails should be available through reports or data exports (check with your AML automation provider). So, when it’s time for your audit, your auditor can easily pull the information they need from the system.
4. Auditor access - Web based AML solution are not only reliable, secure and always up to date, but can be made accessible to your auditor so they can easily find the information they need in one place, remotely or on site.   
5. Flexibility to respond to outcomes of an audit - An individual audit isn’t the end of the line! This is a repeatable, regular process. A good AML automation tools allows you to easily update your rules and processes based on advice from your auditor changes in your business, so you can improve your programme and achieve compliance in the future.

Not only does it lay the foundation for running your programme successfully, an automation tool will improve the efficacy of your programme and help you prepare for audits and reporting more efficiently by centralising critical information in one place and making it easily accessible when it’s needed.  

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