AML/CFT Compliance Management Solutions for Accountants

We offer a comprehensive set of anti-money laundering (AML), counter-terrorist financing (CFT), and fraud prevention solutions for accounting firms’ anti-money laundering compliance that are tailored to applicable AML/CTF (aka CTF) laws, regulations, AML/CTF supervisors' guidance for the accounting sector, sector-specific red flags and indicators, to help your business meet applicable obligations that cover accountants’ money laundering and terrorist financing risk mitigation, the detection and handling of other types of financial crime.

We have designed our AML solutions to help you navigate the complexities of accounting firms’ AML requirements in a commercially oriented and goal-focused manner, providing effective AML/CTF support for all aspects of accountants’ AML compliance, including but not limited to:

• Business Profile and Strategic Factors:
• Your commercial objectives
• Your products
• The size and structure of your business
• Your available AML/CTF compliance technology and resourcing
• Your risk appetite for AML/CTF-related risks
• Your governance framework and reporting lines
• Your client demographics
• Your countries of operation
• Operational AML/CTF Compliance Requirements:

• Money laundering and terrorist financing (ML/TF) risk assessment
• AML risk management
• Customer due diligence (CDD) and Know Your Customer (KYC) obligations for accounting firms
• Enhanced customer due diligence
• Ongoing customer due diligence and transaction monitoring
• PEP identification and sanctions compliance
• Staff vetting and AML/CTF training
• Ad-hoc and periodic reporting
• Other obligations relating to accounting firms’ anti-money laundering, counter-terrorist financing and sanctions compliance, as well as financial crimes prevention

 

What Jurisdictions Do Our Accounting Firms’ AML Solutions Cover?

• Accountants’ AML solutions in the United Kingdom: Accounting firms’ AML obligations in the United Kingdom are outlined under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, last amended in 2020, with supervision typically under professional bodies like the Institute of Chartered Accountants in England and Wales (ICAEW) or HM Revenue and Customs (HMRC).
• Accountants’ AML solutions in the European Union: Accounting firms’ AML compliance across the European Union follows the Sixth Anti-Money Laundering Directive (AMLD6), supervised by the national authorities of each member state.
• Accountants’ AML solutions in New Zealand: Accounting firms’ AML requirements in New Zealand are regulated under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, with oversight from the Department of Internal Affairs (DIA).

Accounting firms, along with lawyers, real estate agents, and company formation service providers, are often considered “gatekeepers” in AML/CFT compliance. These professionals can be used by money launderers to process illicit funds, obscure financial records, and conceal true ownership structures. Consequently, accounting firms have AML obligations in several jurisdictions, while in others, regulations are evolving, with ongoing discussions about expanding AML/CTF laws to shift responsibilities for accountants’ money laundering prevention to the accounting sector.

For example:

• United States: While a comprehensive AML program is not universally required for accounting firms, certain activities involving high-value cash transactions are subject to Financial Crimes Enforcement Network (FinCEN) guidance under the Bank Secrecy Act (BSA). Regulatory scrutiny on the sector is increasing, and potential new AML requirements for accounting firms are anticipated.
• Australia: Currently, accounting firms are not explicitly included under the AML/CTF Act 2006. However, there is an active debate on extending AML/CFT obligations to cover accounting services.
• Singapore: While not all accounting services are covered, specific AML/CFT laws and Monetary Authority of Singapore (MAS) guidelines apply to activities like company formation and client fund management, which may require compliance with broader AML/CFT standards.

 

Which Types of Accounting Firms Do We Support?

Focusing on money laundering (ML), terrorism financing mitigation (TF), and fraud prevention, our Accounting Firms' AML solutions cover the following types of accounting service providers and institutions that are deemed to be AML/CTF designated service providers (aka “reporting entities”):

• Tax Compliance Service Providers
• Audit and Assurance Service Providers
• Forensic Accounting Services
• Tax Affairs Advisors
• International Accounting Services
• Payroll Agents involved in handling transactions
• Insolvency Practitioners
• Public Accountants
• Chartered Accountants
• Other accounting firms that are subject to AML/CFT requirements under local laws

 

Accountants’ AML Advisory and Support

Our AML/CFT advisory services for accounting firms include, but are not limited to, the following:

• Detailed AML/CTF compliance advice: Tailored to the accounting firms’ AML requirements for different processes, including but not limited to customer due diligence (CDD), transaction risk scoring, transaction monitoring, customer onboarding and know-your-customer (KYC) analysis, and other AML processes. Also tailored to the specific money laundering and terrorist financing (ML/TF) risks involved in these processes, helping you with effective ML/TF risk management.
• Accountants’ fraud risk management advice: Advising on measures, controls, and processes for detecting, preventing, and responding to different types of fraud, scams, and other types of financial crime relevant to accounting firms. Also, tailored to accountants’ fraud environment, risk management practices, and stakeholders' expectations and obligations (banks, regulators, insurers, shareholders, etc.).
• Banking relationships advice: Advising accounting firms on AML/CTF issues related to maintaining and expanding their banking relationships, complying with banks' AML/CTF risk appetite standards, recall procedures and expectations, and other operational requirements.
• Operational AML/CTF advice: Advising support and KYC teams on day-to-day onboarding, support queue management processes, allocating AML/CFT resources effectively, and making operational improvements to enhance overall customer experience and AML compliance efficiency.
• Specific matter advice (difficult clients, high ML/TF risk matters, customer due diligence for high-net-worth clients, complex transactions and more): Advising on handling specific AML/CTF issues related to clients and complex and unusual transactions, including assessing the adequacy of Sources of Wealth (SOW) or Source of Funds (SOF) information and documentation for specific enhanced due diligence (EDD) cases.
• Peer benchmarking and best practices: Helping accounting firms compare their AML/CFT practices with industry standards, AML/CTF supervisor guidance, and internationally recognised best practices set up by international organisations like the Financial Action Task Force (FATF) for complying with accountants’ AML/CFT obligations.
• Government agencies liaison advice: Advising senior management and compliance teams on handling relationships with external bodies, including AML/CTF supervisors and law enforcement agencies, such as the FIU or its local equivalents.
• AML/CFT audit advice: Advising senior management and compliance teams on matters related to the statutory AML/CFT audits, including auditors' guidelines, requirements, AML/CFT audit process, and obligations related to the audit's outcome, tailored to both generic accounting firms’ anti-money laundering compliance obligations and your specific situation.
• AML/CFT remediation advice: We help accounting firms to effectively navigate situations involving an AML/CFT breach, warning, or investigation. The cost of non-compliance can result in significant regulatory fines and penalties, as well as irreparable reputational damage. Therefore, when you are on your supervisor's radar, it’s essential to have AML/CFT advisors who know how to set things right and effectively engage with AML/CFT supervisors and other stakeholders. For more details, please visit our Remediation Solutions page.
• Further information: You can visit our AML advisory page for an extensive list of AML/CFT advisory services we offer to support accounting firms' anti-money laundering compliance, as well as AML/CFT compliance for other types of financial institutions and businesses subject to the AML/CFT regime.

 

AML/CFT Training and Capacity Building

We offer the following set of AML/CFT training and education solutions tailored to the accountants’ AML/CFT compliance requirements:

• Customised AML/CFT Training Solutions: Specialised AML training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on the accounting firms’ AML requirements, AML/CFT awareness, best practices, and ML/TF red flags.
• Up-to-date Regulatory AML Updates: Keeping your compliance officers, managers, and teams updated with changes in the accounting firms’ AML requirements, AML regulations and guidance.
• Workshops on Emerging Trends and Red Flags: Advising on new AML trends, red flags, and typologies relevant to accountants’ money laundering, terrorist financing, fraud, and other types of financial crime.
• Practical Workshops: Interactive workshops for effective and goal-oriented AML/CTF compliance, capacity planning, and resource allocation, covering:

• KYC procedures for accounting firms
• KYB analysis and ML/TF risk assessment application to specific clients, transactions and situations
• The accountants’ money laundering risks, common money laundering schemes and terrorist financing methods
• Improvements in clients' onboarding and transaction monitoring procedures
• Reg-tech for AML compliance
• Internal and external AML/CTF reporting
• Related risk and compliance issues, including financial crime prevention
• Application of the risk-based approach to accountants’ money laundering, fraud risks, and terrorism financing
• Suspicious matter reporting guidelines
• The implementation of customer identification programs and KYC procedures
• Strategic and operational ML/TF risk management
• AML/CTF specifics of the cross-border accounting services
• Other obligations related to the accounting firms’ AML requirements

• Practical Compliance Applications: Ensuring the practical application of training, focusing on real-world accountants’ money laundering, terrorist financing, and common accountants’ fraud scenarios, as well as specific challenges related to the accountants’ AML/CTF compliance that your business is likely to face.
• Further information: You can visit our AML training solutions page for an extensive list of AML/CFT training solutions we offer to accounting firms and other businesses subject to AML/CFT regulations.

 

 

Comprehensive AML/CFT Managed Solution for Accountants

Our accountants’ AML/CFT compliance management solutions include but are not limited to:

• AML/CFT Compliance Leadership: We act as your dedicated AML/CFT compliance officers (aka “Money Laundering Reporting Officers” or (MLROs)) and as compliance managers, fully managing AML/CFT compliance and handling the accounting firms’ anti-money laundering obligations for your business.
• Accounting Firms' Anti-Money Laundering Risk Management: Conducting detailed assessments to identify ML/TF risks, assess their inherent impact and likelihood of occurrence for your business, evaluate the effectiveness of mitigations and controls in place, and formulate residual risk ratings.
• Managing Client Onboarding process and Customer Due Diligence: Implementing robust Know Your Customer (KYC), Know Your Business (KYB), customer due diligence (CDD), and enhanced due diligence (EDD) processes, for all types of clients, including higher ML/TF risk clients.
• PEP and Sanctions Screening: Managing thorough compliance with AML surveillance requirements by screening against global sanctions and politically exposed persons (PEPs) lists. This covers both initial and ongoing screening, as well as escalation processes for true positives.
• UBO verification streamlining: Verification of beneficial ownership in line with the accounting firms’ AML requirements, identifying and assessing individuals who hold ultimate control over assets. This includes initial and ongoing checks, with procedures to address discrepancies and high-risk cases as they arise.
• AML Transaction Monitoring: Developing and implementing a set of business-specific ML/TF alerts and red flags to detect and report suspicious transactions, helping you comply with the accounting firms’ AML requirements in a commercially efficient manner without making AML/CFT compliance a business hindering factor.
• Transaction Monitoring Suspicious Activity Detection: Related to the above, we also help with the implementation of fraud alerts and red flags to detect, prevent, and respond to suspicious transactions and activities.
• AML/CFT Tech Handling: Leading the alignment of AML/CFT technology implementation with your business processes and AML/CFT objectives. This also includes reviewing AML/CFT technology against the accounting firms’ AML requirements and your core policies and procedures.
• AML/CTF and Data Sharing: Handling information requests from law enforcement agencies, AML/CTF supervisors, and other relevant AML/CTF-designated entities—such as your banking partners, FX platforms, liquidity providers, finance providers, etc.—to help you manage your AML/CTF compliance-related communications.
• Internal AML/CFT Reporting Solutions: Facilitating structured reporting workflows for your board and its delegate committees, with a specific focus on AML/CFT compliance. This includes:

• preparing and presenting comprehensive AML/CFT performance metrics
• providing insights into AML/CFT compliance effectiveness
• reporting on the effectiveness of internal controls and mitigations for your general AML/CFT obligations and the sector-specific accountants’ money laundering risks
• identifying areas for improvement

Our AML/CFT compliance reports cover:

• your ongoing compliance status in relation to accounting firms’ AML requirements
• ongoing progress against your organisation-wide AML/CFT compliance calendar
• alignment of your business's AML/CFT performance with specific project goals and relevant KPIs
• other factors to ensure that the management function is well-informed and aligned with AML/CFT compliance requirements for the accounting sector.

• Accountants’ AML/CFT Compliance and Externally Reportable Matters: Implementing effective external reporting procedures to help you comply with accounting firms’ anti-money laundering requirements for reporting captured activities and transactions. This includes managing externally reportable matters covered by the following report types: Suspicious Activity Reports (SARs), Suspicious Matter Reports (SMRs), Suspicious Transaction Reports (STRs), Prescribed Transaction Reports (PTRs), Threshold Transaction Reports (TTRs), and their equivalents.
• Periodic AML/CFT Reporting: Organising and overseeing the preparation, data storage, and effective submission of required periodic reports to your AML/CTF supervisors, helping you comply with accounting firms’ AML requirements for statutory reporting.

 

KYB Solutions for Accounting Firms’ Anti-Money Laundering Compliance

We offer a range of KYB solutions to help you effectively comply with accounting firms’ AML requirements. These include:

• Establishing ML/TF risk scoring models and parameters for different risk categories: We establish criteria to assess the ML/TF risk levels of your client base by identifying key risk factors based on their business nature, activities, jurisdictions, and other relevant characteristics and develop a risk scoring model to classify clients into different ML/TF risk categories such as low, medium, and high risk.
• Implementing a Customised KYB Process: We can help you roll out the KYB process across all departments to help your teams become sufficiently trained and equipped to handle clients' ML/TF risk effectively when it comes to verification, monitoring, ongoing due diligence, and other processes.
• KYB Technology and Automation: We select and evaluate technologies that can automate various parts of the KYB process, such as data collection, risk scoring, sanctions screening solutions, and ongoing monitoring.
• KYB-Related Escalation Process: We can develop and implement a clear escalation procedure for handling high-risk clients or irregularities, including the triggers for escalation, the actions required at each step, and the responsibilities for resolving these issues.

 

 

 

Core Policies and Procedures for Accountants’ AML/CFT Compliance

We develop, enhance, and implement a set of core policies, manuals, frameworks, and procedures for effective accountants’ AML/CFT compliance management, including the following:

• Accountants’ AML/CFT Framework Development: Covering specific accounting firms’ AML requirements and obligations under national AML/CTF laws and regulations, any applicable AML/CFT guidance, your risk appetite, your existing human and technology resources, your business structure, your history of AML/CFT compliance, and your current and future business goals.
• AML/CTF Risk Assessments: Focused on the accounting firms' AML requirements for risk management as they relate to specific ML/TF risks faced by your business in terms of its size, products, client types, jurisdictions of operation, delivery channels, and the financial institutions it interacts with when delivering its services. Also covering the assessment of the effectiveness of existing controls and mitigations in place to determine the residual risk rating for both general ML/TF risks relevant to the most designated service providers/AML/CFT reporting entities and industry-specific ML/TF risks faced by accountants as these apply to your business operations. Visit our AML/CTF Risk Assessment page for more information.
• Comprehensive AML/CTF Programs (aka "AML/CFT Programme" in some jurisdictions): When it comes to accounting firms’ anti-money laundering compliance, your AML/CFT program is a core document that details how your business complies with various compulsory AML/CFT obligations, covering:

• the initial and ongoing CDD and EDD processes
• verification methods and requirements for identity, address, and source of funds
• internal and external reporting
• ongoing due diligence
• transaction monitoring
• employee vetting and training
• PEP and sanctions screening, and more

Our accountants’ AML solution is about grounding your AML/CTF program in reality and developing it based on your circumstances, including:

• your AML/CFT Risk Assessment
• your available ML/TF systems and controls
• your available resources
• your compliance budget
• your AML/CTF compliance team's experience and size
• your stakeholders' interests
• your available AML technology and other relevant factors
• Further Information: Visit our AML/CTF Programs page for more information.

• Accountants’ AML/CTF Procedures for Effective AML Compliance: Effective procedures are another core pillar of accountants’ AML/CTF compliance. This is why our solutions cover the development and enhancement of a detailed set of AML/CTF procedures and protocols to meet the distinct needs of your business, with a focus on effective AML risk management across various business processes and the accounting firms’ AML requirements as they apply to each step of your customer journey.
• AML Manuals and Guidelines: These are more detailed, practical resources that support the procedures by providing step-by-step instructions, specific reference points, and standards. Depending on your business size and complexity, we develop and enhance internal manuals and guidelines necessary for effective and efficient AML/CTF compliance. These include AML Operating Manuals, guiding materials, and guidelines that outline what to do for each process, step, or decision within your procedures.
• ML/TF Controls Mapping: Implementing controls based on your documented risks is another cornerstone of accounting firms' anti-money laundering compliance. We help you develop, map, and assess your internal ML/TF controls and improve their effectiveness to ensure compliance with accounting firms’ AML requirements, address specific financial crime, money laundering, and terrorist financing trends, and respond to any findings from internal and external AML/CFT auditors and supervisors.
• AML Red Flag Identification and Response Protocols: This is another area where a well-written AML policy or program must face the reality of operational speed, the workload across different teams, available tools, client base size, and other factors. That is why another part of our accountants’ AML/CFT solution focuses on developing clear guidelines for identifying and responding to red flags indicative of fraud, money laundering, or terrorist financing activities, enabling you to take timely and appropriate action in different circumstances.
• AML/CTF Policy Update: Assisting with the review and enhancement of your core AML/CTF documents and operational procedures to reflect changes in your AML policies, including those caused by:

• updates in the AML/CTF laws, accountants’ AML regulations or AML supervisors’ sector guidance
• internal changes in your business structure, size, and resources
• the launch of new products or expansion to new jurisdictions
• changes in your risk appetite
• changes in related obligations, such as privacy laws, information sharing, accountants’ fraud prevention requirements, and more
• AML/CFT issues identified during internal or external reviews or audits
• other relevant factors

 

AML/CFT Technology Integration Support

Streamlining AML Compliance: Our accountants’ AML solutions include needs assessment and assistance in selecting and integrating appropriate AML technologies for efficient accountants’ anti-money laundering compliance management. This includes AML compliance technologies and tools that cover:

• Customer Due Diligence Automation
• E-KYC and Online Identity Verification
• Customer Onboarding Streamlining
• PEP and Sanctions Screening
• Ultimate Beneficial Owner (UBO) identification,
• KYB Solutions and AML/CFT Risk Management
• AML Alert Management
• Ongoing Due Diligence Obligations Management
• Internal AML/CFT reporting
• Accountants’ AML/CFT Obligations for External Reporting
• AML/CFT Incident Management
• Exception Escalation and Management
• AML/CFT Management Automation: Including automated response workflows and AI technology
• Customisable AML/CFT measures specific to onboarding and monitoring of your high ML/TF risk clients
• Accountants’ AML/CFT obligations for Record-Keeping
• Transaction Monitoring and Surveillance: Including transaction monitoring tools to automate detection and response to accountants’ money laundering and terrorist financing red flags
• Effective CRM for handling Accounting Firms’ AML Requirements

 

Accountants’ AML/CFT Audit Solutions

Having over ten years of AML/CFT compliance experience, ranging from AML/CFT framework and controls development and testing to successful AML/CFT management and issues resolution for various reporting entities, gives us the necessary expertise and qualifications to be your AML/CFT auditors.

We offer two comprehensive AML/CFT audit options to review your compliance with accounting firms’ anti-money laundering obligations. These options are:

Statutory AML/CTF Audit Option: A comprehensive review of your existing AML/CTF framework to assess whether your business complies with AML/CTF standards and applicable obligations. We independently test your compliance with both local AML/CTF obligations and specific accounting firms’ AML requirements. These often include but are not limited to:

• adherence to your AML/CTF risk assessment and operational AML/CFT procedures, including the existence of controls and mitigations to address money laundering and terrorist financing risks identified in your risk assessment
• compliance with your core AML/CFT documents, including sample testing
• your CDD requirements
• your staff vetting requirements
• your AML/CFT management processes
• your client onboarding and offboarding processes
• your EDD requirements, including source of wealth (SOW) and source of funds (SOF) requirements and application of the risk-based approach to different ML/TF risk levels
• your transaction monitoring process, covering large, complex, and unusual transactions and patterns
• your ODD processes
• your record-keeping process
• your suspicious matter reporting process (also known as "suspicious activity" or "suspicious transaction" reporting in some jurisdictions)
• your other reportable transactions process (typically covering cash and cross-border transactions)
• the way you detect and address material changes in client relationships
• your initial and ongoing screening process
• and other obligations for accountants’ AML/CFT compliance

Assurance Levels: Our statutory AML/CFT audit options are available as both:

• A limited assurance audit
• A reasonable assurance audit

Further Information: Please visit our AML/CFT Audit page for more information.

Internal AML/CFT Audit Option: Apart from an independent statutory audit, we also offer an internal AML audit option to prepare accountants for an external audit by an independent auditor, an AML/CTF supervisor's review, or a review by another significant business stakeholder, such as a banking partner or an equity purchaser. This option is also suitable for significant business events like reorganisation or expansion.

Here, we go beyond merely meeting accounting firms’ AML requirements and focus on evaluating the effectiveness of your AML/CFT controls and ML/TF risk management processes for alignment with:

• the ML/TF risks faced by your business, including your Know Your Business (KYB) analysis
• accounting firms’ anti-money laundering compliance obligations
• your current and future goals
• your business model
• your current and prospective client inflow
• the specific AML/CFT compliance areas or requirements (this process can be tailored to address particular AML issues or compliance areas, ensuring a targeted approach to accounting firms’ anti-money laundering compliance)

We help you not only identify any gaps and weaknesses but also provide insights on how to enhance your controls and respond to these in a commercially oriented manner for smarter AML/CFT compliance. Please visit our Internal AML/CFT Review Solution page for more information.

 

AML/CFT audit-related solutions

• Post-Audit Remediation Support: We assist with the implementation of post-audit remediation actions, addressing and resolving any identified AML/CFT issues.
• AML/CFT Attestation Support: Our accountants’ AML solutions include helping you prepare the required attestations for your AML/CFT supervisor and other stakeholders. This involves confirming that all necessary remedial actions have been completed and that adequate AML/CFT compliance measures have been put in place.
• Post-Audit Stakeholders' Liaison: We manage your communications with national AML/CTF supervisors, banks, auditors, insurers, and other stakeholders, ensuring smooth progress in reporting on the status and completion of your post-audit action plan.

 

 Broader Risk & Compliance Solutions for Accountants

Your AML/CFT compliance is generally more effective when the right hand knows what the left hand is doing, and at the very least, they do not interfere with each other. Incorporating your controls and procedures for compliance with the accounting firms’ AML requirements into an overall risk and compliance management framework efficiently can increase your overall risk compliance effectiveness. This is where our experience can help you. Apart from AML/CFT compliance solutions for accounting firms, we include the following risk and compliance solutions:

• Compliance Advisory and Management: A comprehensive set of solutions for second-line compliance management, including both compliance advisory and compliance management options
• Third-line Compliance Assurance: A range of third-line compliance defence solutions covering compliance assurance program development and implementation, internal controls design, and controls testing solutions
• ISO Standards Compliance: A range of solutions for compliance with the International Organization for Standardization (ISO) standards, helping you prepare for ISO certification
• FATCA and CRS Compliance: A comprehensive set of solutions for complying with the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) requirements, including tax residency verification, ongoing due diligence, reporting, and record-keeping
• Privacy Law Compliance: A range of solutions covering development, implementation, and testing of data privacy controls, procedures, and tools required to meet the applicable obligations under the Privacy Act, the GDPR, ISO 27701, etc.
• Financial Licensing and Registration: A set of financial licensing solutions for accounting firms, including preparation, licensing process management, regulator liaison, and post-licensing support in:

• Australia
• Singapore
• The United Kingdom
• New Zealand
• The United States
• The European Union
• Offshore financial centres and tax havens

 

Common Money Laundering Risks for Accountants

Accountants’ money laundering risk types can be broadly classified into five categories:

• Product types (services offered)
• Delivery methods
• Customer types
• The institutions involved in delivering your services
• Jurisdictions of operation

Given the variety of products offered by different businesses, as well as their different business structures and operations, the examples below of money laundering risks faced by accountants represent only a sample and are not exhaustive.

 

Product-Related Risks and Accountants’ AML Compliance

Some of the product-related ML/TF risks relevant to accounting firms' anti-money laundering compliance include:

• Lack of Triggers to Detect Large, Complex, and Unusual Transactions: Absence of red flags and transaction triggers to identify unusual, high-value, or layered transactions.
• Failure to Verify Beneficial Ownership in Insolvency Cases: Lack of controls to verify the ultimate beneficial owners in insolvency cases increases the risk of obscuring illicit funds and facilitating money laundering through the misuse of restructuring or liquidation processes. (insolvency practitioners).
• Limited Oversight of High-Risk Large Asset Transactions: Lack of mechanisms to flag high-risk financial advisory services, such as purchases of large assets (chartered accountants and tax compliance service providers).
• Weak Controls for Screening Trusts and Multi-Jurisdictional Entities: Absence of mechanisms to identify and scrutinise trusts or entities operating across multiple jurisdictions allows clients to conceal beneficial ownership or obscure fund sources (tax advisors and public accountants).
• Inadequate Monitoring of Payroll Transactions for ML Indicators: Failure to implement monitoring systems to detect anomalous payroll transactions, such as payments to unrelated third parties, shell companies, or fictitious employees (payroll agents).

 

Jurisdictional Risks and Accountants’ AML Compliance

Some of the jurisdictional risks relevant to accountants’ money laundering prevention include:

• Weak Verification of Source of Funds Originating from High-Risk Jurisdictions: Lack of systems to verify the legitimacy of funds originating from jurisdictions associated with weak AML/CFT controls, high corruption indices, or organised crime activities. (applies to tax compliance service providers, international accounting services, and public accountants).
• Lack of Initial and Ongoing EDD on Clients Operating in or Controlling Offshore Tax Havens: Failure to implement robust enhanced due diligence measures for clients linked to jurisdictions known for tax havens. (International accounting services and tax affairs advisors).
• Weak Controls for Tax Minimisation Structures: Insufficient oversight of tax minimisation schemes, whether domestic or international, increases exposure to ML/TF risks by enabling fund layering or concealing illicit financial flows. (Tax affairs advisors and chartered accountants).

 

Delivery Method Risks and Accountants’ AML Compliance

Some of the delivery method-related ML/TF risks relevant to accounting firms' anti-money laundering compliance include:

• Lack of Mechanisms to Link Identity to Submitted Documents: Weak controls for verifying and linking identity documents to the actual individual or entity submitting them (applies to public accountants, chartered accountants, and tax compliance service providers).
• Use of Intermediaries Without Sufficient Verification: Allowing representatives, such as accounting agents or third-party intermediaries, to act on behalf of clients without sufficient verification (applies to tax affairs advisors and international accounting services).

 

 

Customer Type Risks and Accountants’ AML Compliance

Some of the customer type-related ML/TF risks relevant to accountants’ money laundering prevention include:

• Lack of Screening for High-Risk Occupations or Industries: Failure to identify and assess clients in industries prone to money laundering, such as gambling, real estate, or unregulated financial services, increases ML vulnerabilities. (applies to forensic accounting services and public accountants).
• Weak Verification of Corporate Clients with Complex Structures: Inadequate controls for identifying beneficial owners of corporate clients with layered or complex structures (applies to chartered accountants and audit and assurance service providers).
• Overreliance on Self-Declared Customer Information: Dependence on unverified client-provided information during onboarding and throughout the relationship (applies to all types of accounting services).
• Insufficient Scrutiny of Clients Using Intermediaries: Failure to implement controls to verify the identities and roles of intermediaries acting on behalf of clients (applies to forensic accounting and insolvency practitioners).
• Failure to Identify Clients Using Intermediaries: Lack of mechanisms to verify the ultimate client when dealing with representatives or intermediaries.
• Limited Risk Categorisation for Different Client Types: Absence of a structured approach to categorising clients based on their ML/TF risk levels (applies to audit and assurance service providers)

 

Institutional Risks and Accountants’ AML Compliance

Some of the institutional ML/TF risks relevant to accountants’ money laundering prevention include:

• Lack of Controls Over Multi-Gatekeepers: Insufficient mechanisms to identify and monitor activities where multiple gatekeepers (such as legal professionals, accountants, and company formation agents) act on behalf of the same customer or transaction.
• Weak Information Sharing Between Gatekeepers: Lack of effective systems for sharing critical information among different professionals involved in the same client’s activities, such as lawyers, accountants, and tax advisors, creates blind spots in detecting suspicious activity.

 

Standard Anti-Money Laundering Requirements for Accounting Firms

Given the variety of accounting firms’ AML requirements, this list is not exhaustive:

• Conducting customer due diligence, including appropriate KYC checks: Ensuring verification of customers’ identities, as well as identities of beneficial owners of customers that are legal entities.
• Conducting transaction monitoring: Monitoring deposits, withdrawals, and other transactions to identify and report suspicious transactions and patterns. However, this requirement will largely depend on the nature of services and local AML/CFT laws.
• ODD requirements: Conducting ongoing customer due diligence, which is generally based on the customers' ML/TF risk profiles and ML/TF risk categories, as well as changes in their activities, behaviours, or risk factors.
• Staff Vetting: Performing comprehensive background checks and ongoing vetting of staff to maintain high standards of integrity and awareness.
• Reporting Certain Non-Suspicious Transactions: Obligation to report cross-border or cash transactions over a certain threshold, as per the local AML/CFT regulations, in a timely manner. However, if the transaction is processed through a local bank or another reporting entity, reporting requirements may depend on the local AML/CFT regulatory interpretation.
• Compliance with the regulatory obligations: Including registering with your local AML/CTF supervisor, appointing an AML/CTF officer or an MLRO, answering requests for information from the police, regulators and your AML/CTF supervisor, filing an annual report and more.
• Regular Staff Training: Providing continuous training to ensure employees are aware of AML/CFT protocols and can recognise red flags.
• Timely Reporting of Suspicious Transactions: Ensuring that suspicious transactions and activities are reported to the relevant authority (either your local AML/CFT supervisor or a financial intelligence unit (FIU)) within the required deadlines.

• ML/TF Risk Assessments: Conducting regular assessments of ML/TF risks faced by your business is a part of AML risk management for accounting firms.
• Independent AML/CFT Audits and Accountants: Organising periodic independent reviews of the AML/CFT program, other core documents, and components of your AML/CFT framework to assess their existence, compliance, application, and, where applicable, effectiveness, depending on local AML/CFT audit guidance.
• Applying EDD measures: Conducting enhanced due diligence on certain customers and certain transaction types.
• Establishing Clear AML/CFT Policies and Procedures: Creating documented guidelines for staff to follow.
• Monitoring PEPs and Sanctioned Entities: Implementing measures for additional scrutiny of politically exposed persons and entities on sanction lists.
• Screening Against Watchlists: Regular checks of clients against domestic and international watchlists.
• Ensuring Proper Record-Keeping: Maintaining detailed and accurate records of client information and transactions in compliance with AML/CFT regulations.

 

Common AML/CFT Issues for Accountants

This is not an exhaustive list and could include:

During Customer Onboarding

• Insufficient Risk Categorisation for Clients: Lack of a structured approach to categorising clients based on their ML/TF risks limits accountants’ ability to implement appropriate levels of due diligence.
• Weak Verification of Beneficial Ownership: Failure to thoroughly verify beneficial ownership in corporate clients with complex or layered structures allows illicit funds to enter through advisory or structuring services.
• Inadequate Screening for Red Flags in Client Information: Lack of mechanisms to identify discrepancies in financial documentation, such as unexplained wealth or incomplete client histories, increases vulnerabilities during onboarding.
• Overreliance on Intermediaries: Relying on client-representatives, such as lawyers or business agents, without adequate verification creates blind spots in understanding the true source of funds or the intent behind services requested.
• Failure to Identify Risks from Offshore Clients: Weak controls for assessing risks posed by clients operating in or linked to offshore tax havens or high-risk jurisdictions compromises the onboarding process.

 

After Customer Onboarding

• Insufficient KYC Refresh Processes: Failure to implement periodic Know Your Customer (KYC) updates for all clients reduces the ability to identify changes in risk profiles and evolving ML/TF risks.
• Absence of Mechanisms to Detect Unusual Patterns in Client Activities: Lack of effective controls to identify significant changes in client activities, such as unexplained shifts in asset allocations or new financial inflows from opaque sources, limits the ability to address potential ML/TF risks.
• Weak Processes for Managing Evolving Client Risks: Infrequent reassessment of client profiles following major changes, such as mergers or restructuring, increases exposure to undisclosed ML/TF vulnerabilities.

 

 

Common AML/CTF Red Flags for Accountants

The Financial Action Task Force (FATF) and various national AML/CTF supervisors identify the following ML/TF red flags relevant to accountants. This is not an exhaustive list:

• Unverified Complex Legal Structures: Lack of controls to identify beneficial ownership within layered or opaque structures, such as trusts or holding companies (applies to tax compliance service providers, chartered accountants).
• Frequent Unexplained Ownership Changes: Clients repeatedly altering company ownership or structures without a clear commercial rationale (applies to audit and assurance service providers, public accountants).
• Unjustified Third-Party Involvement: Transactions involving third parties not directly related to the client, without sufficient scrutiny of their relationship and purpose (applies to forensic accountants, payroll agents).
• Transactions with High-Risk Jurisdictions: Clients engaging in financial activities involving jurisdictions with weak AML/CFT regulations or high corruption risks, without robust due diligence (applies to international accounting services, tax affairs advisors).
• Excessive Use of Offshore Arrangements: Frequent use of offshore accounts or tax minimisation structures without clear economic justification (applies to tax affairs advisors, insolvency practitioners).
• Reluctance to Provide Complete Information: Clients avoiding or delaying submission of documents required for KYC, beneficial ownership, or source of funds verification (applies to all accounting services).
• Unusual or Inconsistent Client Activity: Financial transactions or behaviours that deviate significantly from the client’s stated purpose or known financial profile (applies to audit and assurance service providers, forensic accountants).
• Rapid Cross-Border Transactions: High-value or frequent cross-border transactions without a clear economic purpose or justification (applies to international accounting services, chartered accountants).
• Failure to Update Compliance Documents: Clients refusing or delaying updates to compliance-related documentation during ongoing due diligence or KYC refreshes (applies to all accounting services).