As an accountant, you’re trusted and respected across the globe. Yours is a vital profession, ensuring the finance function is working like clockwork across every single sector.

With that trust, however, comes the great responsibility of being the gatekeepers of the whole financial industry, making you a prime target for money laundering criminals.

To protect yourself, you need to ensure your Anti-Money Laundering (AML) process is watertight.

But with ever evolving legislation to keep up with, many accountants don’t feel confident with the AML function in their business.

Even though a thorough process for risk assessments and AML checks is crucial to protect you from fines (which tripled in 2021) and even prison, doing onboarding checks can feel like a thankless task, taking you away from the work you do for clients that actually makes you money. 

How do I make my AML process compliant? 

The CCAB created a guidance document especially for the accountancy sector dealing with Money Laundering & Counter-Terrorist funding. It’s constantly updated and has everything you need to ensure your firm is AML compliant.  

However, at 137 pages long it doesn’t make for light bedtime reading! 

If you’re worried about your company’s AML process but the thought of all that research fills you with doom and gloom, don’t panic. Because thanks to automation, KYC checks & risk assessments are now easier than ever. 

More on that later, but first, here are 4 common traps our compliance expert, Valerie Steward, and other leading authorities on AML identified that accountants fall into, and how you can avoid them… 

Trap 1: Accountants not incorporating AML checks into ongoing client work 

Picture the scene: You onboarded a new client. All the necessary checks on them have been done and you identified them as an enhanced risk because their business is cash intensive. You took the relevant actions to mitigate the risk and felt confident to start work with them.  

Before you know it, life happens, you blink, and you’re two years into your working relationship with them.

Have you been reviewing them consistently, performing regular risk assessments?

Could you prove to your governing body that you’re constantly assessing the risk of that client? 

Or could you be unaware that you’re complicit in a client’s money laundering antics? 

It is commonly forgotten that risk assessments don’t just affect initial checks with a client but impacts your ongoing work with them. For example, are you constantly scrutinising transactions, and checking the margins seem reasonable for a business of this nature? 

Your AML check safety net 

Scenarios like the above might rarely have disastrous consequences, and we’re not trying to scare you. But they are easy to avoid when AML checks and risk assessments are done consistently. Avoid this by investing in reliable AML software.

GoProposal AML will prompt you when a risk assessment is due on a client, whether the relationship is old or new. It will also be kept up to date, with guidance and support to help you understand the ongoing implications. 

A Money Laundering case study… 

man in office clothes with head in sand, By Tap10 on Shutterstock

When a Leeds accountant found out that his ex-client had been found to be involved in a huge fraud case against the NHS, the ICAEW concluded he had no knowledge of the fraud.

However, they did find he had ended business with her when she disclosed she had over-claimed on her mileage expenses and had employed a specialist firm to deal with it. 

Even though he had no knowledge of her and her husband’s fraudulent scheme to generate fake orders for NHS training, he was convicted in 2015 to pay a £5,000 fine for failing to disclose her suspect behaviour over mileage claims to a nominated officer. 

As gatekeepers of the industry, it isn’t enough for accountants to walk away from business that rings alarm bells. Every suspicion must be reported, as this accountant found out the hard way that burying his head in the sand came at a great cost.

Trap 2: Lack of ongoing monitoring

What about your clients who aren’t initially deemed enhanced risk at the start of the relationship? Accountants we spoke to cited the upkeep of risk assessments as a major pain point.  

Ongoing monitoring falls into two categories: 

  1. A general annual review of the assumptions you’ve made about a client via a risk assessment 
  2. Monitoring of specific events, such as a change in business director or change in the way you provide the service will require a new assessment on how this will impact your AML process with them 

Your AML check safety net 

Ongoing obligations are just as important as onboarding procedures. Don’t leave them to chance – keep on top of these by systemising your ongoing anti-money laundering process.

Building an AML system into your annual work-flow won’t only put your mind at ease knowing your whole client-base is compliant, it will also mean you’ll easily be able to remove yourself as the bottleneck now, or when you expand your team. 

Check out this podcast for advice on how to systemise across your whole business.

Trap 3: Blind spots on enhanced risk clients 

Guidelines to what constitutes a high-risk client can be ambiguous. An obvious high-risk client might be a political figure, for example. But when you drill further down, many enhanced-risk clients are more difficult to spot. 

Let’s take the example of a family friend working in a cash-intensive business. You feel you know them, you might have even gone to school with them. But while you can vouch for their identity, you must treat their business as objectively and fairly as you would a stranger in a cash intensive business. 

Your AML check safety net 

In the same way we advise you against giving discounts to friends and family, we strongly advise you don’t treat their business any differently to one of a stranger.

‘How can I do that without offending them?’ You might be wondering.

Integrate your risk assessments and AML checks into your initial proposal to set the boundaries within the relationship from the start.  

It’s part of the parcel you’re offering, part of the premium service you offer, and having it listed there in black and white as you conduct your live proposal with the client shows your professionalism and negates any awkward conversation.

A Money Laundering case study… 

suited man holding 'help' sign above paperworkAn accountancy firm specialising in tax let their risk assessments slide, contesting that they, “do not engage with high-risk businesses involved with large cash transactions.” When they were inspected by HMRC in 2018, they were found to have incomplete customer due diligence for 297 out of 405 clients on their books.

It may be true that none of their clients were high risk, but not backing this up with relevant written risk assessments ended up costing the company £16,891 in fines.  

The business owner claimed a lack of staff was part of the reason they fell behind on these checks. If only they had seen that while it wouldn’t have been a profitable use of time, it would have certainly been a cost, and reputation saving one. 

Trap 4: Accountants see AML checks as a box ticking exercise 

Governing bodies reported this as a recurring problem among their members. The truth is, no one likes doing AML, accountants see it as a necessary evil they don’t profit from. But the risk of not doing your AML checks correctly far outweighs the cost in time it takes you to do it. Fines for accountants found not to be complying with Anti-Money Laundering tripled in 2021 compared to 2020.  

So now is the time, more than ever, to get your AML checks watertight. 

Your AML check safety net 

How can you stop AML checks feeling like a bore that’s getting in the way of the real, profitable work you do for your clients?  

There’s no avoiding doing them… but by automating them, and integrating them into your onboarding procedure, they’re no longer the time-consuming bore they once were. 

The ultimate AML safety net?

With phase one of GoProposal AML now live, you can conduct your KYC checks and Risk Assessments in record time.  

Drop down, multiple-choice questions will guide you through assessments with ease, ensuring you’ve considered everything that needs to be considered, while saving you time as the intelligent software adapts what you’re asked based on your previous answer. You’re presented with one question at a time, enabling you to answer each one carefully, without overwhelm. 

We’ve integrated AML into our app, creating a seamless, clean onboarding process for members and their clients, in which proposals, engagement letters, risk assessments and KYC checks can all be completed.

Members old and new can trial GoProposal AML for free, along with GoProposal and OverSuite to get a taste for how each solution works together, ensuring you’re compliant with every client.

Learn more about GoProposal AML

Find out how you can have complete confidence in your firm’s AML processes with hassle-free KYC checks and Risk Assessments built by compliance experts.

Learn More

Money in handcuffs image by lunopark on Shutterstock.

Danielle Fisher

Danielle Fisher

Danielle is a Senior Client Success Manager at GoProposal, supporting accounting and bookkeeping firms to meet their business goals through use of the GoProposal platform. She also oversees the development of OverSuite, liaising with our compliance experts to ensure that our engagement letters always reflect the highest levels of compliance excellence and protection.

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