Bank Secrecy Act Auditing for Community Banks: A Risk-Based Approach

Author: Susan Cannon, CAMS-Audit

This white paper will discuss some specific strategies for achieving compliance with the independent testing pillar for smaller banks, often referred to as “community banks,” commensurate with their BSA/AML risk profiles. Specifically, I will discuss customizing the independent testing approach and accompanying audit program so that it is appropriately risk-based. Additionally, strategies for selecting risk-based transaction testing samples will be discussed. It is important to note that appropriate scoping, planning, audit programs and sampling techniques are but a few of the overall considerations in successful BSA/AML auditing. Other resources should be consulted with respect to auditor independence, managing the audit, documenting work, formulating conclusions, issuing final reports and tracking and validating clearance of exceptions.

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