COPYRIGHT NOTICE USE OF WEBEX LOGIN/PASSWORD FOR ACAMS WEB SEMINARS

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1 COPYRIGHT NOTICE USE OF WEBEX LOGIN/PASSWORD FOR ACAMS WEB SEMINARS Each site license entitles registrant to one login: one phone connection (if accessing audio via teleconference) and one Internet connection for simultaneous Webcast, in one room where an unlimited number of listeners may participate. Providing your login instructions and password to another for their use, using your login ID/password more than once, or any simultaneous or delayed transmission, broadcast, re transmission or re broadcast of this event to additional sites/rooms by any means (including but not limited to the use of telephone conferencing services or a conference bridge, whether external or owned by the registrant) or recording is a violation of U.S. copyright law and is strictly prohibited.

2 Welcome to the ACAMS Web Seminar AML Audit (Part I): Demystifying the AML Audit Discovery Phase Preparing for the Pre Visit April 18, :00 Noon 2:00 PM EDT A sound check will be performed 5 minutes before the start time. 2

3 Technical Assistance www2.acams.org/webinars Send a message via the Q & A box Or Call WebEx Technical Support: (US & Canada) (International) Attendee instructions on how to use Audio Broadcast Do not close the Audio Broadcast panel If you are not able to listen to the audio on your computer speakers, press the stop button, wait 5 seconds then press play. Make sure to adjust the volume button on your computer speakers and also adjust the volume on your sound card. To do this, go to the Start Menu, click Control Panel, then click Sound & Audio Devices and adjust accordingly. If you do not have speakers, please refer to your login instructions for the Teleconference Domestic and International Numbers and Access Code. You may request the Teleconference Number by clicking Request under the attendee box on your left hand side. 3

4 Can you hear the sound check? It has begun 4

5 Q&A To send a question: Locate the Q & A box on the bottom right hand corner of the WebEx platform. Type in your question and click send! 5

6 Welcome to the ACAMS Web Seminar AML Audit (Part I): Demystifying the AML Audit Discovery Phase Preparing for the Pre Visit 6

7 Speakers: Bill Badinelli, CAMS, CIA Audit Partner, Senior Vice President, AML/Regulatory Risk RBS Americas GIA Laura Goldzung, CAMS, CFE President & Principal Examiner AML Audit Services, LLC

8 Effective Audit Program Appropriate for the organization s risk profile Covers all applicable regulations and guidance Effective discovery, scoping and planning Proper testing and sample size Program covers all appropriate areas Work is properly documented Conclusions are well supported

9 Effective Audit Program, cont. Issues are communicated effectively Violations are identified and risks explained Includes appropriate corrective actions Findings and actions are tracked Results are communicated to board/senior management Document resolution of exceptions not in report

10 Audit Discovery External vs. Internal Internal Audit Team Understands the organization External Audit Team Self educates and performs discovery to understand the organization

11 Discovery Phase for External Audit Understanding the Business of the FI Performing discovery sets the stage for understanding the business and to develop the scope of the review

12 Audit Discovery External Audit Review and Analyze AML Compliance Program document approved by Senior Management Risk Assessment BSA/AML & OFAC Regulatory exam reports, exceptions, responses Previous independent reviews, exceptions, responses AMLCO Bio & Experience Comprehensiveness of AML Training Program Understanding of supervisory structure, business lines

13 Audit Discovery External Audit Review and Analyze Clearing relationships, affiliates, where applicable Customer base Domestic / International Changes in business focus and infrastructure (controls) AML system controls and data integrity Suspicious Activity Program AML issues brought before Board/audit committee Strategy, business plans, i.e. new customer segments Flow of AML controls in FI departments, people, systems

14 Audit Discovery Amount of information needed to plan the audit may vary Document understanding of the BSA risk profile Identify high risk products, services, clients and geographies Consider new products since prior audit

15 Audit Discovery, cont. Identify new regulations and guidance Review most recent audits and regulatory exams, Consider results of assurance reviews and/or business line self testing Identify open issues and resolutions of past issues and recommendations

16 Audit Discovery, cont. Consider changes since prior audit, including Institution s risk profile Compliance function IT programs Monitoring systems and/or thresholds Key compliance staff Key operations and support staff Outsourcing

17 Key Steps in Audit Planning Understand the objective, timing and planned approach for the audit Notify the Audit Sponsor of the audit s high level scope and approximate timeline Hold preliminary business meetings Create exceptions for all concerns resulting from planning activity

18 Key Steps in Audit Planning, cont. Hold planning session involving all key members of the audit and CAATs teams and relevant SMEs to discuss and agree key information Discuss and agree milestones Begin to populate the audit scoping document and high level process maps

19 Key Steps in Audit Planning, cont. Identify key risks and key controls to the high level process maps Populate the audit file with specific risks and associated key controls discussed during the planning meeting Organize team, provide background information on audit Finalize scope and record evidence of Audit Sponsor s acknowledgement

20 Developing the Scope The Audit Sponsor and business contacts are crucial sources of information Clearly explain what is both in scope and out of scope Must be clear link between information obtained and the final scope All relevant information should be available Consider mapping to FFIEC Manual

21 Developing the Scope, cont. Scope must take account of any concerns raised by the planning work to date Consider the likelihood of a specific risk materializing and the impact if it does Risk analysis must include those risks which feature in the business high level risk profile Rank each specific inherent risk as high, medium or low

22 Scoping and Resourcing Ensure that adequate resources and skills are available to complete the audit based on the planned scope and deliverables When the work is expected to complete Right skills available at the right time Are there any skills without which the audit could not be performed Team member roles, responsibilities, objectives and reporting lines need to be agreed and communicated to the team

23 Raising Exceptions Any concern or control gap that is identified during planning should be raised as soon as it is identified This may not be a formal issue, raising it now will save time later in the audit if it does become an issue The concern or gap should be discussed with the business to confirm that the auditor s understanding is factually accurate

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25 If you have suggestions for future web seminars or additional questions for today s experts, please send them to: training@acams.org Thank you for joining us today! 25

26 Web Seminar Certificate of Attendance To request a certificate of attendance, please fill out the request form, found in your reference materials, and the form to info@acams.org along with your payment information. First certificate is included in cost of seminars. There is a $40 administrative fee for each additional certificate. You may also call to process payment over the phone. 26

27 Next Web Seminar: Customer Due Diligence (CDD) Changes: Are You Answering or Asking The Right Questions? April 25, 2012 Noon to 1:00 PM EDT 27

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