ACCA Strategic Professional · Advanced Audit and Assurance (International) · Money laundering
Lakeside & Co is reviewing its firm-wide AML framework. Which of the following is a required element of an effective set of firm procedures?
An effective framework includes a documented firm-wide risk assessment, a designated MLRO, regular training for relevant staff, and retention of CDD and transaction records for the required period. Training only partners, discarding records early, or having no nominated officer would fall short of requirements.
- ALeaving AML responsibility to each engagement partner, with no designated nominated officer
- BKeeping client identification records only while the audit is in progress and destroying them at the year-end
- CTraining only the partners, as junior staff do not handle client information
- DCarrying out a documented firm-wide risk assessment, appointing an MLRO, training relevant staff regularly, and retaining CDD and transaction records for the prescribed periodCorrect
Explanation
Effective firm procedures include a documented risk assessment, a nominated officer, ongoing staff training and record retention for the prescribed period after the relationship ends. Destroying records at year-end, training only partners, or having no MLRO would each breach standard AML requirements.
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