How should sample sizes be determined in an AML audit?

In an AML audit, determining sample sizes is a critical process that requires careful consideration and discussion. The correct approach emphasizes that sample sizes should be defined in detail, taking into account multiple factors such as the specific objectives of the audit, the nature of the transactions being reviewed, the level of risk associated with those transactions, and the overall size of the population from which samples will be drawn.

By engaging in detailed discussions and defining sample sizes clearly, auditors can ensure that they are selecting samples that will provide sufficient and relevant evidence to meet the audit's goals. This tailored approach helps to address risks effectively, improving the quality and reliability of the audit findings. It also allows for adjustments based on the particular characteristics and complexity of the audit area being examined.

Other methods, such as relying solely on previous audits or fixing sample sizes to a predetermined number, may not account for changes in risk profiles or operational environments, which could lead to ineffective audit coverage. Similarly, merely using a random selection process without a specific framework for sample size can result in samples that do not adequately represent the population or address the key concerns of the audit, potentially overlooking significant findings. Overall, a thorough and thoughtful approach to defining sample sizes is essential for a robust AML audit.