Although these vary according to the reviewers’ capabilities and experience, an AFSL compliance audit is an independent assessment of whether a financial services business is complying with its key licence obligations.
The audit examines whether the compliance framework operates effectively and whether controls function in practice. Auditors typically review governance arrangements, policies and procedures, monitoring programs, breach reporting systems and supervision of authorised representatives.
Evidence testing is central to the process. This may involve reviewing client files, internal registers, training records and operational documentation to confirm that policies are applied consistently. Interviews with responsible managers and compliance personnel are also common.
The outcome should be a structured report identifying compliance gaps, control weaknesses and potential regulatory risks together with practical recommendations for remediation and improvement