What is the role of internal audits in AML compliance?

The role of internal audits in AML compliance primarily focuses on ensuring that the organization adheres to established policies and regulatory requirements. Internal audits assess the effectiveness of the AML program by evaluating the processes and controls in place to prevent, detect, and report potential money laundering activities. They help identify any weaknesses or gaps in the compliance framework, ensuring that all actions taken by the organization are in line with both internal policies and external regulations. This evaluative function supports continuous improvement and reinforces the integrity of the organization's AML efforts.

In contrast, creating the AML compliance program falls under the responsibility of compliance officers and management rather than internal audits. Managing customer relationships and executing customer transactions are operational activities that do not pertain directly to the compliance verification role of internal audits. Thus, the focus on adherence to policies and regulations aligns perfectly with the key purpose of internal audits in an AML context.