How can an auditor assess the effectiveness of controls in an AML audit?

The most effective way for an auditor to assess the effectiveness of controls in an AML (Anti-Money Laundering) audit is by reviewing the results of an Enhanced Risk-Based Assessment (EWRA). This method allows the auditor to analyze data specific to the organization's risk profile and the measures in place to counteract those risks.

EWRA results provide valuable insights into how well the controls are functioning in practice, reflected by the outcomes of previous assessments and testing. By utilizing this information, an auditor can evaluate whether the controls are mitigating risks sufficiently and identify areas that may require improvement or refinement. This evidence-based approach is integral to ensuring that an organization remains compliant with AML regulations and is effectively combating potential money laundering activities.

Self-evaluation or reliance solely on past evidence, or conducting external financial reviews, do not provide the comprehensive insight necessary for a thorough assessment of control effectiveness in the AML context. They may miss crucial operational nuances or recent changes in risk exposure that EWRA results would typically capture.