An agency's compliance officer, who wrote its AML/CFT programme, offers to carry out the agency's independent AML/CFT audit. Under s 59B of the AML/CFT Act 2009 and DIA's current audit guidance, what is correct?
Correct Answer
C) She cannot audit it; audits are independent and generally due every three years.
Section 59B requires the audit to be carried out by an independent, appropriately qualified person who was not involved in establishing, implementing or maintaining the programme, or in the risk assessment. DIA's July 2026 guidance for real estate agents says an independent audit must be done every three years, unless DIA gives notice that a four-year timeframe applies, or when it requests. An auditor need not be a chartered accountant.
Why This Is the Correct Answer
The author of the programme is disqualified, and DIA sets a three-year audit cycle.
Why the Other Options Are Wrong
Option A: She can audit it if she is a chartered accountant; audits are due every two years.
Section 59B bars anyone involved in setting up the programme, and DIA guidance now sets a three-year cycle unless notified otherwise.
Option B: She can audit it, since knowing the programme well makes her best placed to do so.
Section 59B(3) disqualifies anyone involved in establishing, implementing or maintaining the programme.
Option D: Audits are no longer required now that DIA is the sole AML/CFT supervisor.
Section 59 still requires audits, and DIA's audit guidance sets a three-year cycle.
Background Knowledge for Compliance
Source: https://www.dia.govt.nz/AML-CFT-Information-for-Real-Estate-Agents
Exam Tip for Compliance
The AML/CFT auditor must be independent of the programme but need not be an accountant.
Common Mistakes to Avoid on Compliance Questions
- •Relying on the old two-year audit cycle or letting the compliance officer self-audit.
More Compliance Questions
A real estate advertisement states 'Best value in the area' without any supporting evidence. Under the Fair Trading Act, this statement is:
Under the Fair Trading Act 1986, which statement about advertising a property for sale is correct?
A client provides a bank cheque for $30,000 as a deposit and mentions recently selling cryptocurrency to fund the purchase. Under AML/CFT requirements, what is the appropriate next step?
An agent holds $180,000 in trust across four transactions. One agreement is validly cancelled because the purchaser's finance condition was not met, and both parties' lawyers confirm the $60,000 deposit is to be refunded to the purchaser. What is the correct trust account procedure?
Under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, what is the minimum threshold for conducting customer due diligence when establishing a business relationship in real estate transactions?
- → An international client buying a $2.8 million commercial property provides a copy of their overseas passport but refuses any further identity checks or information, claiming diplomatic immunity. How should the agent proceed under AML/CFT requirements?
- → Which statement best describes the trust account requirements under the Real Estate Agents Act 2008?
- → An agency's trust account reconciliation reveals that interest earned on client deposits has been retained by the agency rather than distributed to clients. This practice is:
- → According to trust account regulations, how long must real estate agencies retain records of trust account transactions?
- → What is the primary purpose of the Consumer Guarantees Act 1993 in relation to real estate services?
- → Under the Consumer Guarantees Act 1993, if a real estate agent fails to exercise reasonable care and skill when marketing a property, what remedy might be available to the client?
- → A real estate agency's trust account shows a shortage of $5,000 during a routine audit. What is the most serious disciplinary order available under the Real Estate Agents Act 2008?
- → A real estate agent advertises a property as having a 'new roof' when they know it was repaired but not replaced. A buyer purchases based on this information and later discovers the truth. Which Acts could potentially apply to this situation?
- → Which statement best describes the primary purpose of trust accounts in real estate transactions?
- → A property advertisement states 'Guaranteed rental return of 8% per annum', although no one has contracted to pay that return. Under the Fair Trading Act 1986, this statement is:
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