In the context of AML audits, what does the term 'fieldwork' refer to?

Fieldwork in the context of AML audits specifically refers to the part of the audit process where compliance controls are actively tested. This phase is critical because it involves evaluating the effectiveness and integrity of the anti-money laundering measures a financial institution has implemented. During fieldwork, auditors gather evidence through various means such as interviews, observations, and examination of documentation to assess whether the established policies and procedures are functioning as intended.

This stage is essential in identifying any potential weaknesses or gaps in the AML controls, which can lead to significant vulnerabilities in preventing money laundering activities. The findings from fieldwork directly inform the final report, as they provide the basis for the conclusions drawn regarding compliance with relevant regulations and best practices.

Other options relate to different phases of the audit process: documenting findings is done after fieldwork, planning and preparation occur before fieldwork, and final discussions with management take place after the audit is completed. Hence, these phases do not accurately describe what fieldwork entails.