Acca aaa s21 Notes

September 2021 to June 2022 exams
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Auditors also do not want junior members of the audit team taking this into their own hands and 
directly informing the authorities. Junior member of the team are relatively inexperienced and might 
simply be jumping to the wrong, but dramatic, conclusions. Instead, all suspicions should be reported 
to the auditing firm’s 
money laundering reporting officer
. This is a person who has sufficient 
experience and seniority to be able to make reliable decisions about when matters ought to be 
reported to the authorities.
4. Auditors’ responsibilities 
The Money Laundering Regulations 2007 require businesses in the accountancy sector to establish 
anti money laundering ('AML') systems and controls including: 
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Customer due diligence (‘Know your client’) measures include identification of the people 
involved, the ownership of companies, the economic rationale of the business, the sources of 
funds.
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Appointment of a Money Laundering Reporting Officer (MLRO).
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Train staff to identify the types and patterns of transaction that might indicate money 
laundering.
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Establish a system for the reporting of suspicions to the MLRO.
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Include a paragraph in the engagement letter setting out the auditor’s responsibilities in respect 
of money laundering.
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Maintain records detailing how the regulations have been complied with, for five years.
5. Risk factors
The existence of higher than normal risk factors require increased attention to gathering and 
evaluation of KYC information and heightened awareness of the risk of money laundering in 
performing professional work. For example:
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A cash-based business
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Many similar deposits and withdrawals in various bank accounts for no obvious reason
๏
Many jurisdiction involved in the transfer of money
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The use of tax havens
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Bearer bonds or cheques
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Higher profits than could be reasonably expected
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Poor documentation for transactions
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Secrecy