We found that 5.3% of all firms reviewed haven’t performed a regular review of the adequacy and effectiveness of their policies, controls and procedures. The regulations say that firms must establish an independent audit function to assess the adequacy and effectiveness of the firm’s AML policies, controls and procedures. Sole practitioners with no employees are exempt from this requirement. Firms should plan to regularly review their AML policies, controls and procedures. It doesn’t need to be an external review, but firms should design this to be as independent as possible, given the size and nature of the firm. Where firms identify any gaps or weaknesses, they should document how they intend to address them.
Regularly performing an effective compliance review, including a sample of new and ongoing clients and the customer due diligence for those clients, will help to ensure that ICAEW finds your firm compliant with the Money Laundering Regulations at your next practice assurance review.
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Read our 2024/25 anti-money laundering supervision report for more detail on the results of our supervisory activity.
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