What information do auditors gather during the planning phase of an AML audit?

During the planning phase of an Anti-Money Laundering (AML) audit, auditors gather detailed information about the audited entity's business and compliance regime. This information is critical for auditors as it helps them understand the specific context in which the business operates, including the types of products and services offered, the geographical area of operation, customer demographics, and regulatory requirements that may apply.

Understanding the business and its compliance framework allows auditors to assess the potential risks related to money laundering and terrorist financing effectively. They can then tailor their audit approach to address these risks appropriately. This can involve identifying vulnerabilities in the existing compliance controls, evaluating the adequacy of the AML program, and determining the scope of the audit.

While confidential client data, financial statements, and personal interviews with staff may play a role in subsequent phases of the audit or be necessary for a comprehensive understanding of the entity, the foundational step during the planning phase is to gather context-specific information regarding the entity's operations and compliance structure. This sets the groundwork for a focused and effective auditing process.