BACKGROUND

In October 2022, the industry Anti-Money Laundering Audit Peer Group (“AAPG”), comprising major banks in Singapore, was established to (a) facilitate sharing of anti-money laundering and countering the financing of terrorism (“AML/CFT”) audit best practices in the financial industry; and (b) promote engagement with the Monetary Authority of Singapore (“MAS”) and the wider audit community on key AML/CFT risk areas.

The establishment of the AAPG is in recognition that both the internal audit (“IA”) functions and external audit (“EA”) firms play key roles in ensuring that financial institutions’ (“FIs”) internal policies, procedures, and controls remain adequate to combat money laundering and terrorism financing (“ML/TF”) and are in compliance with regulatory requirements.

The AAPG has published the “Best Practice Paper –

Enhancing Anti-Money Laundering and Countering the Financing of Terrorism Audit Effectiveness for Banks: Key Baseline Standards and Best Practices.”

This paper aims to set out baseline standards and best practices for internal and external auditors to consider for AML/CFT audits for banks.

The following areas have been identified based on AAPG’s benchmarking survey in 2023

• Risk Assessment
• Scope and Methodology
• Training and Upskilling
• Reporting and Follow-up Findings
• Collaboration with Third Parties
• Outsourced Anti-Money Laundering and Countering the Financing of Terrorism Functions
• Partnering with Internal Audit
• Nature and Extent of Work to be Performed by External Audit Firms during Annual Audit

WHAT’S NEXT?

The AAPG paper applies in varying degrees to non-bank Fis. Hence, FIs are advised to prepare themselves for a more thorough internal as well as external audit of their AML/CFT operations.

And more…

How we can help

We have
broad and in-depth experience on AML operations
https://capitalgovernance.wordpress.com/services/anti-money-laundering/

Contact us
to discuss how we can advise you to strengthen your AML/CFT policies, procedures and controls across your organisation.