An independent audit function to test the overall effectiveness of the AML program is the third line of defense.
A robust and independent audit function is a key component to a well-functioning governance structure and an effective AML/CFT framework. All reporting entities are obliged to have in place an independent audit function to test the effectiveness and adequacy of their internal polices, controls and procedures relating to combating the crimes of money laundering and the financing of terrorism and of illegal organisations. In this regard, entities should ensure that their independent audit function is appropriately staffed and organized, and that it has the requisite competencies and experience to carry out its responsibilities effectively, commensurate with the ML/FT risks to which these entities are exposed, and with the nature and size of their businesses.
