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

An accountancy firm's junior member of staff suspects that a client's large cash receipts are the proceeds of crime. Under typical anti-money laundering procedures, what should the junior do first?

The junior should report the suspicion internally to the firm's money laundering reporting officer. The MLRO assesses the information and decides whether an external report to the authorities is needed. Confronting or warning the client could amount to tipping off and prejudice any investigation.

  1. AReport the suspicion internally to the firm's nominated money laundering reporting officer (MLRO)Correct
  2. BConfront the client and ask where the cash came from
  3. CReport directly to the national financial intelligence unit without telling anyone in the firm
  4. DStop work and tell the client the firm is considering a report

Explanation

Staff report suspicions internally to the MLRO, who evaluates them and decides whether to file an external report to the authorities. Confronting or warning the client risks the offence of tipping off, so that option is wrong.

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