In the context of AML audits, what is meant by 'auditable entity'?

The term 'auditable entity' in the context of AML audits refers to a particular component or aspect that is subject to an audit process. This can include various departments, processes, programs, or systems within an organization that have the potential to impact compliance with anti-money laundering regulations. By identifying auditable entities, auditors can focus on specific elements that require scrutiny to ensure adherence to regulatory requirements and best practices.

In this context, the concept encompasses a range of elements rather than limiting itself to an entire organization or its leadership structure. An auditable entity can be something like a certain compliance program or transaction monitoring system, which may be evaluated for its effectiveness and adherence to AML standards. Thus, defining the auditable entity as a single element or aspect within the audit framework accurately captures its scope and importance in ensuring a thorough and focused audit process.