INTRODUCTION
When it comes to auditing BSA/AML programs, one of the first questions the average auditor will ask is: “Do you have a manual or an automated process?” The usual assumption is that since an automated system is supposed to be more effective than a manual system, that it actually is more effective. An automated process is supposed to be much better than a manual process because an automated system has the ability to analyze large amounts of transactions and produce “red flags” or alerts to identify potentially suspicious activity that may not be detected in a manual process. However, auditors need to understand that this assumption can actually be totally false. If BSA/AML software is implemented incorrectly and/or ineffectively, then monitoring and reporting can be inaccurate.
The Federal Financial Institutions Examination Council BSA/AML Examination Manual states, “Suspicious activity reporting forms the cornerstone of the BSA reporting system.” With that in mind, it is important to understand that an inaccurate and/or ineffective monitoring and reporting system could result in the complete failure of a BSA/AML program and open the financial institution to potential fines and enforcement actions…
…the objective of this white paper is to assist auditors by enabling them to understand what is “behind the curtain” of an automated program and providing insight into three key areas:
- Types of Software
- Implementation of the Software
- Usage of the Software
Link to the detailed report: click here