Improving auditor effectiveness in assessing KYC/AML practices: Case study in a Luxembourgish context

De Smet, D and Mention, A-L 2011, 'Improving auditor effectiveness in assessing KYC/AML practices: Case study in a Luxembourgish context', Managerial Auditing Journal, vol. 26, no. 2, pp. 182-203.


Document type: Journal Article
Collection: Journal Articles

Title Improving auditor effectiveness in assessing KYC/AML practices: Case study in a Luxembourgish context
Author(s) De Smet, D
Mention, A-L
Year 2011
Journal name Managerial Auditing Journal
Volume number 26
Issue number 2
Start page 182
End page 203
Total pages 22
Publisher Emerald
Abstract Purpose: The purpose of this paper is to report on the suitability of an ISO standard to create an internal control assessment model, which effectively acts as a control system template and mental model to evaluate compliance with the Know Your Customer (KYC) and anti-money laundering (AML) requirements in the Luxembourg retail and private banking sector. Design/methodology/approach: This paper used a qualitative approach with various focus groups and case studies, to elaborate and validate the developed model through methodological triangulation. Findings: The proposed assessment model has a matrix structure that facilitates the incorporation of checklists and narratives to ensure effective testing of controls and its structure allows targeting specific areas of risk in the identified KYC/AML processes. Research limitations/implications: The development of the model tended to be time consuming and could explain why matrix formats are used less often and the traditional limitations of a qualitative research apply. Practical implications: The model can be used to combine various reporting formats on internal control, hence the audit effectiveness can be increased and information asymmetries can be reduced. Originality/value: The proposed assessment model offers an innovative approach because it combines a process view of the business with an internal control view. Research in internal control assessment models has been very limited in the past years.
Subject Innovation and Technology Management
Keyword(s) Financial reporting
Internal auditing
Internal control
Luxembourg
DOI - identifier 10.1108/02686901111095038
Copyright notice © Emerald Group Publishing Limited.
ISSN 0268-6902
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