The government of UK has published a guidance document assessing the AML/CFT risks faced by accountancy service providers (ASPs) and discussing how they can be mitigated. This document highlights the main points ASPs should keep in mind when conducting supervised business activities.
ASPs in the UK include statutory auditors, local auditors, insolvency practitioners, external accountants and tax advisers. Authorities have pointed out that ASPs must understand and fulfill their obligations under the country’s AML/CFT law. This is necessary for the security of their businesses, the community and the UK as a whole.
If ASPs do not monitor their business activities adequately, their vulnerabilities can be exploited by financial criminals to conceal illicit fund transactions. UK authorities therefore expect ASPs to meticulously assess the risks they face. ASPs must also implement policies and measures to mitigate these risks. Such measures must also be regularly reviewed to prevent ML/TF.
The guidance document mentions some risks that are common across all ASPs. These include the use of accountants and client accounts to legitimize funds and their transfer, and criminals trying to corrupt ASP employees or leverage weak risk assessments and mitigation policies. The document also highlights that among various ASP sub-sectors, audit and book-keeping have the lowest risk. Meanwhile, accountancy and payroll services are medium-risk sub-sectors and company formation and tax advisers are high-risk subsectors.
Source: Government of UK