How to perform AML/CFT audit and A Guide to CAMS-Audit

An AML audit improves compliance by assessing governance and risk, and evaluating CDD/EDD, transaction monitoring, screening, SARs/CTRs, MIS reporting, training, record retention, and regulatory requirements.

Begin with a risk assessment to establish the foundation of AML audits. Understand the organisation's nature of business, compliance status, and regulatory requirements to guide improvements.

Evaluate AML/CFT audit readiness by presenting a competent, certified team with banking and crime risk experience, including curriculum vitae and no conflicts of interest, and tailor scope to organization size.

Plan AML/CFT audits with a seven-step approach from understanding the audit entity to defining scope and data gathering, emphasizing risk assessment and backup procedures.

Identify and validate AML/CFT controls by compiling document requests, reviewing policies and training, and testing controls to define audit objectives, scope, and timing.

Learn how aml/cft audits document findings in comprehensive working papers, record controls, sampling methods, and root-cause analyses to ensure policy compliance and risk mitigation.

Present findings from the aml/cft audit reporting phase to the board and senior management with evidence and recommendations, highlighting major risks and outlining the final report and action plan.

Identify, categorize, and assess regulatory, legal, financial, reputational, and operational risks in aml/cft, including customer, geography, product, and channel risks. Set risk appetite and tolerance, and assess control environment.

Assess AML/CFT policy and procedure compliance with Nepal rules and central bank directives. Evaluate transaction screening models, KYC and CGT processes, staff qualifications, and FATF guidance, including Uzbek FDA considerations.

Assess and strengthen AML CFT governance by establishing an independent testing framework, monitoring controls, and building a culture of compliance through governance committees and risk-based policies.

Identify inherent and residual risk to shape aml/cft audit planning and assess control effectiveness. Target high-risk customers, cross-border activity, and new products, while reviewing prior audits.

Initiate an emergency bank audit by outlining objectives, scope, and methodology, request specific documents, and conduct the audit virtually with senior management approval.

Audit the enterprise-wide AML risk assessment to verify the risk management framework, data-driven evaluation of inherent and residual risk, and alignment with risk appetite, FATF standards, and regulatory requirements.

Audit policies and procedures ensure compliance with laws and risk controls, including KYC, customer due diligence, enhanced monitoring, beneficial ownership, board approval, and ongoing recordkeeping.

Explore how AML/CFT audit guides transaction monitoring through risk assessment to identify high risk customers, products, and jurisdictions, apply rules to detect anomalies, generate alerts, and support automated investigations.

Auditing sanction screening identifies sanctioned transactions and dual-use goods, flags criminal links, and prevents terrorism funding, with RPA reducing false positives and ensuring timely compliance.

Explore how to implement name screening and media screening to verify customers, manage sanctions lists, perform enhanced due diligence for high-risk clients, and enforce onboarding and ongoing screening policies.

Auditing aml/cft models requires implementing a robust model risk management framework, independent validation, and annual high-risk model testing to ensure rigorous, well-documented risk controls.

Audit the end-to-end suspicious activity reporting process, from onboarding due diligence to escalation, investigation, and filing sdr/str, including formats, confidentiality, and regulatory accountability.

Auditing training covers regulatory requirements and governance for AML/CFT training, detailing policies, roles, delivery channels, and ongoing needs assessment to ensure risk-based, role-specific staff education.

Understand stakeholder expectations in AML/CFT audits, including the board, audit committees, and senior management. Communicate risks and audit findings with formal reports and executive presentations to support a compliant program.

Implement issue management in AML/CFT audits by defining roles, deadlines, and reporting, prioritizing issues by risk, and testing corrective actions to ensure effectiveness and prevent recurrence.

Develop core AML/CFT competencies by building department structure, conducting risk assessments, implementing policies and sanctions, and enhancing transaction monitoring with machine learning insights through the zero to hero course.

Perform audit closure by following up on issues, validating corrective action plans against measurable goals with evidence of root-cause resolution, and maintaining ongoing monitoring for risk-based improvement.

Regulators praise AML/CFT audit progress and CAMS-Audit improvements; staff upskilling via Emma CFD zero to hero course leads to training abilities, with plans to refer SERA Consultancy to other banks.