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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Money laundering

An audit manager at Orion & Co discovers that a client's director has used funds of suspected criminal origin to buy a commercial property, which is then rented out and the rent declared as income. The manager mentions the suspicion to the director to 'give him the chance to explain' before the firm decides whether to report. Which offence is the manager most at risk of committing?

The manager risks committing tipping off. Disclosing a suspicion of money laundering to the suspect in a way that could prejudice a possible investigation is an offence. The concern should be raised internally with the firm's money laundering reporting officer, not discussed with the director.

  1. ATipping off, by disclosing information likely to prejudice an investigationCorrect
  2. BFailing to report, since a report must be made to the director first
  3. CMoney laundering by integration, since rent is legitimate income
  4. DAcquisition of criminal property by purchasing the audit working papers

Explanation

Tipping off is the offence of alerting a person that a report has been made or an investigation is likely, in a way that could prejudice it. Raising the suspicion with the director risks this. Reports go to the MLRO and then the authority, not to the suspect.

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