The circular set out additional guidance and highlights the good practices observed by the MAS relating to performing audits on the effectiveness of AML/CFT policies, procedures and controls. Financial Institutions (FIs) are expected to have established policies to steer their periodic AML/CFT audits, and to escalate audit observations to support Board and Senior Management (BSM) oversight of ML/TF risks. The circular sets out the following guidance:
- Ensure that the audit function is adequately resourced with sufficient AML/CFT expertise.
- Conduct regular AML/CFT risk assessments to identify changes in the FI’s inherent ML/TF risk profile, changes in regulatory requirements, and regulatory/audit issues.
- Ensure that the frequency and intensity of AML/CFT audits are commensurate with identified ML/TF risks.
- Consider the use of data analytics (DA) in the conduct of AML/CFT audits.
FIs should conduct a gap analysis of their existing audit practices against the practices set out in this circular, as well as the Anti-Money Laundering Audit Peer Group’s (AAPG’s) Best Practice Paper. This paper sets out baseline standards and best practices for auditors to consider when determining the appropriate scope and extent of testing in the conduct of AML/CFT audits for banks.
For the full details, please refer to the MAS website https://www.mas.gov.sg/regulation/circulars/circular-on-audit-of-aml-cft-policies-procedures-and-controls
Disclaimer: The information, views or opinions expressed are provided for general information and should not be relied upon as legal or professional advice.