Bookkeeping and due diligence

Bookkeeping and due diligence

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I have been asked to do some bookkeeping for a local business, they already have an Accountant.  In the course of discussion I advised them that I am governed by anti-money laundering legislation and would have to verify their identity etc.. but they came back to me on this, said they had already done this with their Accountant and refused.  Please can you advise - providing bookkeeping services only, to a client with an Accountant, do I have to verify identity?  I would have copies of their bank statements, the client has lived locally for a number of years and their business is based from home and the meeting took place there ... but the refusal to provide identity worries me.  please could someone help me with the legislation on this one.

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By Novakova
16th Nov 2013 08:21

Due diligence - reliance on third parties

This is what ANTI-MONEY LAUNDERING GUIDANCE FOR THE ACCOUNTANCY SECTOR says at para 5.33:-   "Businesses may rely on third parties, subject to the third parties’ consent, to complete all or part of customer due diligence as set out below but they should be cautious in relying on third parties as they will remain liable for any failure to comply notwithstanding their reliance on a third party (See Regulation 17). Businesses should consider requiring copies of relevant information and documentation from the third parties, in order that they may satisfy themselves the information is sufficient."

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By ShirleyM
16th Nov 2013 08:58

@JWB

I am always wary of clients with that sort of attitude. If they are preventing you complying with your regulatory requirements, then will they expect you to ignore more regulatory requirements further down the line? A few minutes of their time can avoid a lot of your time being wasted by getting agreement from their accountants. Does this mean they are going to be unhelpful all the time?

Have you explained to them that this is a legal requirement, and that non-compliance is a very bad start to your relationship?

I know the checks are a nuisance, but clients usually comply ..... with a sigh, and a smile.

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By JWB
16th Nov 2013 15:16

Is internal bookkeeping excluded from the definition of Accountancy services though, because I did make the mistake of saying that as I am only doing internal work strictly speaking I did not need to do ID checks .. 

 and this is in the regulations ... Activities specifically excluded per Treasury guidance are internal bookkeeper, accounting software training, property service administration, and relative, friend, voluntary service offering accountancy or tax advice....

But as an Accountancy practice providing bookkeeping services albeit on an internal basis then does this apply?

I need to go back to them with confidence and say, I've reviewed the rules and actually I do need to do compliance checks and if this is a problem then I'm sorry but I cannot act ... but I just wanted some advice from you guys first.

 

 

 

 

 

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By ShirleyM
16th Nov 2013 15:36

Internal bookkeeping

I would have thought that applied to employees, not self employed bookkeepers. I'm not 100% certain of that though. Are you going on payroll? I think that may exclude the need for MLR checks.

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By garforth
16th Nov 2013 19:48

my two pennyworth

In my opinion you are an external bookkeeper and subject to the same regime as an accountant.

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By JWB
16th Nov 2013 15:53

No I will not be on payroll, sorry Garforth the double negative has bamboozled me

I am an external bookkeeper doing bookkeeping work for a sole trader business purely for their internal use.  They will use the bookkeeping for management purposes and to pass to their external (3rd Party) Accountant.

In my LOE I have included the clause "Under the terms of this engagement we will not be providing external Accountancy services."

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By Moonbeam
16th Nov 2013 19:33

No question that this is under MLR

I don't have any problems in getting MLR documentation from new clients. I would see any prevarication as a red light to anyone being signed up.

I have been doing bookkeeping and management accounts either on or off clients' premises for years but consider all of them to be subject to the MLR.

Don't let them bully you. If you don't do the checks and and if you don't get the right paperwork then whoever's responsible for checking your MLR files may roast you slowly over the coals a few years hence.

If you don't like being an unpaid policeman you need to change profession.

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By JWB
18th Nov 2013 10:22

refused

Hello

I explained to the client and the client refused to provide ID.  Relationship terminated ....

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By Kirkers
18th Nov 2013 10:25

How peculiar! I've not heard of a client refusing before.

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By JWB
18th Nov 2013 14:52

I know but they say that they

I am a qualified Accountant running an Accountancy practice and so have rules to follow which they appreciate.

 

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By ShirleyM
18th Nov 2013 10:44

Just a bookkeeper?

Ha ... that gives you an idea of the respect you could expect to receive from them!

Now get back under your rock, and don't speak unless spoken to! ;)

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