Significant changes in an organization’s structure could lead to which of the following?

Significant changes in an organization’s structure often create complexities that can impact processes, controls, and risk assessment methodologies, particularly in relation to anti-money laundering (AML) compliance. When an organization undergoes structural changes, it is essential for compliance teams to reassess the potential risks and vulnerabilities that may arise from those changes.

Ad hoc AML audit risk assessments become necessary because such changes might not fit into the regular audit cycle. These assessments are critical for identifying any new risks or compliance gaps that could emerge from, for example, mergers, acquisitions, or departmental reorganizations. As the organization restructures, policies and procedures may also shift, making it vital to conduct these assessments to stay aligned with regulatory requirements and ensure that adequate controls are in place.

By contrast, increased audit cycles, reduced compliance requirements, and lowered risk ratings typically do not align with the reality of what occurs when there are significant changes in an organization's structure. There is often a heightened need for vigilance and scrutiny rather than a decrease in such measures, as the evolving environment increases the likelihood of compliance risks.