What characterizes a vertical AML audit?

A vertical AML audit is characterized by its focus on testing every component within a single department. This approach allows auditors to delve deeply into the specific practices, controls, and compliance measures of one distinct area within an organization, ensuring that all aspects of the anti-money laundering (AML) compliance framework are assessed thoroughly.

By concentrating on a single department, the audit can identify weaknesses or gaps in policies and procedures that may not be apparent in a broader or horizontal audit. The aim is to ensure that the department adheres diligently to AML regulations, internal policies, and best practices specific to its functions.

In contrast, audits that assess multiple departments at once or evaluate the overall AML compliance program cover a wider scope but may not provide the in-depth analysis required to pinpoint issues within individual departments. Similarly, reviewing only policy compliance would be an incomplete approach, as it would not necessarily look into the operational effectiveness or challenges faced by that particular department.