Accounting dilemmas: 5 AML obligations

Sometimes in business, you can find that company ‘policy’ is more in the imagination of middle management then committed to paper.

For his fifth article on ethical situations, AAT’s head of professional standards Adam Williamson considers what happens when firms have not followed requirements to publish an anti-money laundering policy.

One major part of the accounting role is dealing with the various ways of working that different clients have. This could be to do with the systems they use, the way they gather information, or the depth of the policies they have in place.

Take this scenario, for example:

The scenario

While working as a sub-contractor, you have been engaged by a medium-sized accountancy firm, which has three chartered accountant partners.

You are assigned to a long-standing account. When working on it, you become aware that there appears to be little in the way of client-onboarding information. This appears to be similar to other client accounts.

You request a copy of the firm’s anti-money laundering (AML) policy. This is in order to familiarise yourself with their processes.

However, you are told that there is no such policy, in written form at least, but that each team has someone who ‘deals with that side of things’.

What should you do?

Considerations and actions

It seems quite clear that this firm is not meeting its AML regulations.

As a minimum, the 2017 MLR regulations require the following to be carried out:

  • Client Due Diligence checks on every client. These must be documented, reviewed, and updated on an annual basis.
  • An overall risk assessment for the firm, also updated and reviewed annually.
  • A documented AML policy, which is available to all staff members.

In Summary

It is your responsibility, at this stage, to raise the issues directly with the partners. If changes are not immediately implemented in order to ensure the firm is AML compliant, you should disengage.

In addition, you may wish to consider raising the matter with the relevant AML supervisor for the company and (if the supervisor is not a professional body) the professional bodies of which the partners are members.

For more ethical accounting dilemmas:

Adam Williamson is AAT's Head of Professional Standards.

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