ACCA Strategic Professional · Advanced Audit and Assurance (International) · Money laundering
The MLRO of Delta Assurance LLP has submitted a suspicious activity report about a client, Orion Imports, and is awaiting consent from the authorities before the firm continues with a related transaction. The client's finance manager asks why the firm has paused its work. Which response is appropriate?
The firm should give a neutral operational explanation without revealing the suspicious activity report, taking guidance from the MLRO. Telling the client about the report or any investigation would be tipping off, which is a criminal offence, so the other responses are inappropriate.
- AExplain that a suspicious activity report has been filed so that the client can cooperate
- BGive an operational reason for the delay without disclosing the report, after consulting the MLRO on what can be saidCorrect
- CTell the client the firm will resume once the authorities finish investigating the client
- DResign immediately and inform the finance manager of the reason in the resignation letter
Explanation
Disclosing that a report has been made, or that an investigation is under way, is tipping off, which is an offence. The firm should take guidance from the MLRO and avoid revealing the report. Explaining the report, mentioning the investigation, or citing it in a resignation letter all disclose the suspicion.
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