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ACCA Applied Knowledge · Business and Technology · Regulation and financial crime

A firm of accountants has just accepted a new client, a company owned through several layers of overseas holding companies. Which customer due diligence step is most directly aimed at this structure?

The step aimed at a complex overseas ownership chain is identifying and taking reasonable steps to verify the beneficial owners, meaning the individuals who ultimately own or control the client. Customer due diligence requires this so that the real people behind the structure are known.

  1. AIdentifying and taking reasonable steps to verify the beneficial owners of the clientCorrect
  2. BObtaining the client's last three years of audited financial statements
  3. CChecking that the client's fee will be paid in cash
  4. DAsking the client to sign an engagement letter

Explanation

Customer due diligence requires identifying the customer and the beneficial owners, meaning the individuals who ultimately own or control it. Complex ownership structures make this especially important. Financial statements and engagement letters do not establish who ultimately controls the client.

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