What types of audits are included in the AML framework?

The correct answer encompasses a comprehensive understanding of the types of audits that can be effectively integrated into an Anti-Money Laundering (AML) framework. The inclusion of various audit types—full-scope and limited-scope audits, horizontal and vertical audits, as well as look-back and change-management audits—highlights the complexity and versatility of compliance auditing in the context of AML regulations.

Full-scope audits are extensive reviews that evaluate an entire entity's compliance with AML laws and regulations, ensuring that all aspects of the AML program are functioning properly. Limited-scope audits, on the other hand, focus on specific areas of concern or particular transactions, offering a more targeted approach to compliance checking.

Horizontal audits assess compliance across different entities or functions at the same point in time, while vertical audits examine a single entity over different time periods to identify trends or persistent issues. Both types of audits are essential for understanding how AML practices are implemented and evolving within an organization.

Look-back audits are critical for evaluating past transactions to detect any potentially suspicious activities that have not been addressed, allowing organizations to rectify any compliance issues retroactively. Change-management audits ensure that any changes in policy or procedure are effectively implemented and that they align with regulatory expectations.

Thus, integrating all these types