What Auditors Should Know and Ask About BSA/AML Software Before a Successful Audit Can Be Conducted

Author: Nancy E. Lake, CAMS-Audit

When it comes to auditing BSA/AML programs, one of the first questions the average auditor will ask is: “Do you have a manual or an automated process?” The usual assumption is that since an automated system is supposed to be more effective than a manual system, that it actually is more effective. An automated process is supposed to be much better than a manual process because an automated system has the ability to analyze large amounts of transactions and produce “red flags” or alerts to identify potentially suspicious activity that may not be detected in a manual process. However, auditors need to understand that this assumption can actually be totally false. If BSA/AML software is implemented incorrectly and/or ineffectively, then monitoring and reporting can be inaccurate.

Download PDF