What are the responsibilities of an auditor regarding Money Laundering?

Responsibilities

Auditor's responsibilities regarding money laundering is to report the MLRO immediately without tipping off. The MLRO (Money Laundering Reporting Officer) than report it to SOCA (Serious Organised Crime Agnecy).

Prevention

Timely reporting it to SOCA will obviously minimise it, but not accepting the client whose activites are suspicious not only of the span of the business but also risk considered as per ISA330

There are three principal money laundering offences4 which dene money laundering to

encompass offences relating to the possession, acquisition, use, concealment or

conversion of criminal property and involvement in arrangements relating to criminal

property. These principal offences apply to all persons and businesses whether or not

they are within the regulated sector.

Auditors who consider that the actions they plan to take, or may be asked to take, will

result in themselves committing a principal money laundering offence are required to

obtain prior consent to those actions

Auditing standards on law and regulations require the auditor to obtain:

a general understanding of the legal and regulatory framework applicable to the

entity and the industry or sector in which the entity operates and how the entity is

complying with that framework

sufcient appropriate audit evidence regarding compliance with the provisions of

those laws and regulations generally recognised to have a direct effect on the

determination of material amounts and disclosures in the nancial statements

This may cause the auditor to

be suspicious that, for example, breaches of the Companies Act or tax offences have

taken place, which may be criminal offences resulting in criminal property