Does one size fit all? The modernization of an AML Audit into a Financial Crime Audit

Author: Jay Smith, CAMS-Audit

This white paper postulates that a robust independent Financial Crime (FC) Audit will enable the organization to detect and deter a broader set of financial crime risks, and why all organizations can easily adopt such FC audits because the steps and processes are already established for their mandatory AML audits. Although the focus of an independent FC audit is to “kill 2 birds with 1 stone”, it does not recommend consolidating the AML and Financial Crime audit into a consolidated financial crime program.

The white paper will refer to the results of a survey that was conducted for the sole purpose of this paper. (Appendix 7.2) The survey shows that compliance professionals strongly feel that their current AML audit programs can be, and should be, expanded to include other financial crime risks. This paper will also explain how auditing the management best practice of “Knowing Your Employee” can help to mitigate asset misappropriation risks. In 2014, asset misappropriation was identified by PricewaterhouseCoopers (PWC) as the most prevalent economic crime reported by financial institutions.

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