ACCA Strategic Professional · Advanced Audit and Assurance (International) · Money laundering
Ferris & Partners is reviewing its anti-money laundering framework. Which firm-level arrangement is most clearly required to demonstrate that the firm complies with money laundering regulations and the ISQM 1 approach to quality management?
The firm needs a documented firm-wide risk assessment supported by policies, controls, training and record-keeping that address the identified risks. This mirrors the risk-based design of ISQM 1. Partner declarations, reliance on a client's policies or one-off due diligence do not provide adequate ongoing firm-level compliance.
- AA documented firm-wide risk assessment, with policies, controls, training and record-keeping that respond to the risks identifiedCorrect
- BA single annual declaration by partners that they know of no suspicious clients
- CReliance on the client's own anti-money laundering policies instead of firm policies
- DDue diligence performed only at the start of the relationship, with no later updates
Explanation
Regulations expect a firm-wide risk assessment feeding policies, controls, staff training, monitoring and record retention, which aligns with the risk-assessment-driven quality management system in ISQM 1. Annual declarations, reliance on client policies and one-off due diligence do not meet the requirement for ongoing, firm-owned controls.
Did you get it right without looking?
One question tells you little. A timed set on Money laundering shows your real accuracy, how long you take and where you lose marks.
More Money laundering questions
- A junior auditor at Tessen & Co notices unusually large, round-sum cash receipts from overseas parties with no commercial rationale at a cli…
- The MLRO of Harlow & Co has received an internal report that a client, Westmere Trading, may have laundered criminal proceeds. The MLRO conc…
- Auditors of Norvik Ltd identify transactions suggesting laundering of criminal proceeds. The firm has made a report to the national authorit…
- An audit partner suspects that a client's director is laundering proceeds of crime. The partner discusses the suspicion with the director to…
- During the audit of Calder Ltd, a staff member of the audit firm, Priya, notices a series of unusual cash deposits that she suspects may rep…
- During an audit, the engagement partner of Delta & Partners suspects a client's finance manager is laundering proceeds. The partner files a …