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Law firms that are reporting entities under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 are being reminded of the importance of meeting their independent audit obligations after the Department of Internal Affairs (DIA) issued formal warnings to a number of reporting entities, including six law firms, for repeated audit-related non-compliance.
The warnings followed findings that required independent audits of AML/CFT programmes and risk assessments had not been completed. The action signals continued regulatory focus on ensuring reporting entities maintain effective compliance frameworks and regularly test whether their AML/CFT controls are operating as intended.
Independent audits are a key part of the AML/CFT regime, helping firms assess whether their programmes are working in practice, identify gaps and strengthen controls. The DIA has emphasised that strong AML/CFT systems help protect businesses, their reputations and the wider community from the harm caused by financial crime.
Today’s action signals a clear expectation that reporting entities must comply with their legal obligations.
Law firms that are reporting entities should review their AML/CFT obligations and ensure any required independent audits are completed within the required timeframes.