Save content
Have you found this content useful? Use the button above to save it to your profile.
Falling businessman AccountingWEB Accounting firms are falling short with their AML compliance
istock_fallingbusinessman_FOTOKITA

Accounting firms falling short with AML compliance

by

Research reveals that only 36% of accounting firms perform regular anti-money laundering checks despite 90% being confident in their compliance measures.

4th Mar 2024
Save content
Have you found this content useful? Use the button above to save it to your profile.

Firmcheck surveyed over 250 accounting firms of different sizes, types and regions throughout the UK to gauge feelings towards anti-money laundering (AML) as well as understand how firms are currently managing compliance. 

In a press release, Firmcheck shared some alarming figures: “Only 36% of accounting firms are conducting regular AML reviews, raising significant parallels with concerns raised by the Institute of Chartered Accountants in England and Wales (ICAEW).”

According to the 2023 practice assurance monitoring report by the ICAEW, 545 firms were highlighted for money laundering regulation-related issues. 

“Firmcheck’s research underscores industry concerns, revealing that many accounting firms face challenges in conducting regular AML reviews,” the press release stated.

Kevin Lord, managing director of Firmcheck said, “I’ve spoken to hundreds of practices who express guilt and fear regarding their current AML management, which they view as disorganised at best and potentially non-compliant at worst. At the heart of it, I believe the industry needs a solution that consolidates all aspects of AML, making compliance easier to manage.

“As accounting firms grapple with the complexities of AML compliance, our research provides invaluable insights and practical strategies to address these challenges effectively,” he continued. 

Register for free to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:


Content lock down, tick icon

View all AccountingWEB content


Content lock down, tick icon

Comment on articles


Content lock down, tick icon

Watch our digital shows and more

Access content now

Already have an account?

Replies (28)

Please login or register to join the discussion.

avatar
By FactChecker
04th Mar 2024 15:42

"Firmcheck surveyed ..." - that's 'Firmcheck: AML Management Software For UK Accountants'?

They seem very shy of revealing any of that survey's baselines .. with the link taking you straight to a blizzard of quotes/findings, but no explanation of methodology. Indeed no indication as to why, if “Only 36% of accounting firms are conducting regular AML reviews” they were happy to reveal that to the survey.

Anyway there's obviously no potential for bias in those findings then, such as:
"The report emphasised the importance of adopting technology and said that it “can be a positive influence in contributing to AML compliance”"!

Thanks (17)
Replying to FactChecker:
avatar
By Kevin_firmcheck
05th Mar 2024 14:48

Hey FactChecker,

Thanks for your kind feedback...I would push back slightly on us being shy!

On the link described, you will find the option to download the full report with the methodology and more data explaining our research. Feel free to email me directly ([email protected]) if you want me to send this to you.

We also held a 3-day AML Summit last week which saw close to 1,000 registrants and 400 attendees on all 3 days. While there is "potential for bias" in my feelings on the event, the feedback we received was overwhelmingly positive and in full praise of our more "light-hearted and positive approach to AML guidance" Again, far from being shy we are trying to be upfront and honest about AML anxieties.

Recordings of the full event are on our YouTube channel

Thanks (1)
Replying to Kevin_firmcheck:
Stepurhan
By stepurhan
05th Mar 2024 15:15

The Download Full Report button on the linked page is currently not working. Please fix this. Please also ensure that the link allows us to simply download the report without having to provide any personal information to do so. Requiring information to be used for marketing purposes is not transparent. We should also not have to give up our forum anonymity by emailing you for a copy.

I assume the full report includes more detailed methodology than the linked page, because the methodology on the linked page is too vague to be useful.

Thanks (4)
Replying to Kevin_firmcheck:
avatar
By FactChecker
05th Mar 2024 15:47

OK, I'll accept the evidence of my eyes ... you personally are not shy!

But I stick by my use of the word which referred to what was omitted in the article here.
It may well be in the full report, but I was disinclined (as was apparently @Self-Employed and Happy) to do so when I discovered you have to provide your details - which reinforced the perception that this was, at heart, just an advertising campaign whose purpose is to collect details for your marketing database.

And there's nothing wrong in that IF it is all made clear.
In the distant past, I have similarly commissioned research that would with luck both inform us of market trends and reinforce our brand as market leaders ... this being for small market visionaries all the way up to the likes of the CBI. BUT, and it is an important but, we never pretended that any subsequent press was just a news story - nor used it as part of a direct marketing campaign.

Each to his or her own, of course, and my stance may now seem old-fashioned ... but professionals in particular tend to take exception when they feel that the wool is being pulled over their eyes (even when they perceive it as only attempted).
Pomposity alert - some of us may be considered over-sensitive to the degree in which concepts like integrity and transparency are falling down the chart of corporate behaviour, and so react badly every time we encounter anything that seems to evidence that.

Thanks (7)
Replying to FactChecker:
avatar
By johnjenkins
05th Mar 2024 16:05

Yer we are being conned left right and center and everybody knows it but unfortunately if you want a certain type of whatever you have to have all the ads and marketing that goes with it.

Thanks (2)
avatar
By philaccountant
04th Mar 2024 16:57

Launder billions of pounds of Russian money through the London Laundromat? Mind how you go (just make sure you make a donation to the right people).

Complete a tax return for a little old lady down the street with some untaxed dividends? Hours of paperwork and compliance with the threat of fines and prosecution.

I wonder why it's so hated by accountants at the coal face...

Thanks (27)
Replying to philaccountant:
avatar
By Ammie
05th Mar 2024 10:12

Essentially, AML is a disproportionate delegation by legislation.

Passing more and more civil service work onto the public in a cost cutting move seems to be the way the government has chosen to fulfil its goals.

Our reward? A smile and a "sweetie" to charm a vote out of us every general election campaign.

Thanks (6)
Replying to philaccountant:
avatar
By AndrewV12
05th Mar 2024 10:55

Good point, no one at the upper hierarchy of Banks or Financial intuitions ever goes to jail for not performing AML. They are happy in collect the fines.

Thanks (4)
avatar
By Self-Employed and Happy
05th Mar 2024 09:52

When you go to download the full report from the link provided in the blurb above you have to provide your details, so this is just a glorified advert mixed with collection of accountant information to add to a database they can use for marketing.

Secondly no explanation as to what the definition of accountant is, are we talking Joe Bloggs who is doing some bookkeeping but calls himself an accountant or are we talking Chartered with a Practising Certificate (which is why I believe the word should be a protected word like Doctor, Architect, Solicitor).

Thanks (10)
Replying to Self-Employed and Happy:
avatar
By Kevin_firmcheck
05th Mar 2024 14:53

Hey SE&H,

If you would like the full report, please email me on [email protected] and I can send you this.

We interviewed and spoke to a range of accountants and this is explained in the report.

We also hosted a 3 day AML Summit last week with Accounting Bodies, AML Consultants and Practice owners (and some Joe Bloggs who are doing "some bookkeeping" but also have legitimate AML concerns) about AML, processes, concerns, guidances etc....you can find the recordings on our YouTube channel

Thanks (0)
Replying to Self-Employed and Happy:
Profile
By indomitable
05th Mar 2024 18:15

Agree, the term accountant and tax advisor should be protected in my view and scrap AML regs

Thanks (1)
avatar
By rmillaree
05th Mar 2024 09:52

i wander if its easier to fake it with these new fangled online checks compared to the old skool way of person turning up with their actual photo id and actual utility bill that we can touch and feel.

Thanks (1)
Replying to rmillaree:
avatar
By johnjenkins
05th Mar 2024 10:32

Where do you think some scammers get their information from.

Thanks (1)
avatar
By agknight
05th Mar 2024 09:59

A sure fire indicator of bad law, when relatively intelligent people do not comply.

It is a sad indictment of our time that legislators have no clue as to practical solutions to practical issues. Just box ticking.

Thanks (4)
Replying to agknight:
avatar
By Self-Employed and Happy
05th Mar 2024 10:19

The obvious answer is the Government do their own AML checks every three years, the person gets a code and then simply gives that code to Solicitors / Accountants etc to enter into an online portal to confirm it's them.

That is ALL that is needed, reducing the admin burden on tens of thousands of businesses that "need" AML.

Thanks (3)
avatar
By johnjenkins
05th Mar 2024 10:10

If the figures are to be believed then the obvious answer as to why the difference is that most of us have had a good deal of training and experience to "suss" out naughty clients quite quickly without the need for an "idiot guide".

Thanks (7)
avatar
By AndrewV12
05th Mar 2024 10:50

'importance of technology and software
Only 65% of accounting firms use software for AML and these firms are 3.2 times more likely to carry out more regular reviews compared to those who aren’t using any software to manage their AML compliance. '

I did not even know AML software was available, but then again I am sceptic of technology, guess I must be one of the 90% who believe there on top of AML.

Thanks (0)
By ireallyshouldknowthisbut
05th Mar 2024 10:54

When pressed where exactly in the legislation does it say you really need to keep on checking ID for long standing clients, the answer has always been "er, er, *whistle*, best practice, look over there," etc etc etc

The whole MLR industry, and it is now an industry seems to exist largley to justify itself.

Thanks (4)
Replying to ireallyshouldknowthisbut:
avatar
By johnjenkins
05th Mar 2024 11:37

It doesn't but I have been told by a reliable source (solicitor) that Insurance companies INSIST on 6 monthly checks including ID.

Thanks (0)
Replying to johnjenkins:
By ireallyshouldknowthisbut
05th Mar 2024 14:05

johnjenkins wrote:

It doesn't but I have been told by a reliable source (solicitor) that Insurance companies INSIST on 6 monthly checks including ID.

Lucky I am not an insurance company then.

Thanks (2)
Replying to ireallyshouldknowthisbut:
avatar
By johnjenkins
05th Mar 2024 15:00

Why's that then?

Thanks (0)
Replying to ireallyshouldknowthisbut:
avatar
By Kevin_firmcheck
05th Mar 2024 15:04

Hi IRSKTB,

You are quite correct - renewing of ID checks is not ALWAYS required and, in actual fact, the regulatory bodies are encouraging us to emphasise that AML is simply not getting new IDs.

Sadly, a lot of firms believe that is EXACTLY what is being required and are now compliant once audits/reviews take place.

We hosted an AML Summit and released an AML Maturity framework last week where we are trying to begin to standardise the guidance and education for our industry....a long way to go but the initial feedback regarding our approach has been extremely positive

Kevin (GM Firmcheck)

Thanks (0)
avatar
By AndrewV12
05th Mar 2024 10:56

So if were doing all this work for the Government, HMRC, Police, civil service...... are we entitled to holiday pay, police pensions, cars and other benefits ......

Thanks (2)
Profile
By indomitable
05th Mar 2024 11:55

As for the ICAEW, they need to start getting on board with the membership not being a lapdog to government and start pushing back regarding these AML regs that are clearly NOT FIT FOR PURPOSE.

Sometimes I really don't understand the ICAEW, they need to be more militant with government. Most of their membership are telling them that AML is not an effective way to police money laundering and terrorist funding and it catches very few.

If it was effective then OK I would agree with it, but it is not. So in who's interests are the ICAEW serving certainly not the membership or the public

Thanks (13)
Replying to indomitable:
avatar
By FactChecker
05th Mar 2024 15:23

"So in who's interests are the ICAEW serving certainly not the membership or the public" ... is I presume entirely rhetorical?

The answer was made clear by the amount of energy they suddenly found recently to virulently oppose creation of a single Office for AML (as they saw an easy profit stream about to be dammed).

Thanks (9)
Replying to FactChecker:
Profile
By indomitable
05th Mar 2024 18:09

Yes rhetorical,

The ICAEW seem to have forgotten who they are supposed to serve.

Like all large organisations now their purpose appears just to be to promote themselves not their members and spend my subscriptions on ever increasingly ridiculous aims like 'net zer0' and 'diversity' which nobody asked them to do. They have been captured by government and the latest trends instead of concentrating on what they are supposed to be concentrating on.

Thanks (4)
Replying to indomitable:
avatar
By Jo Nokes
06th Mar 2024 12:03

I'm gratified that many members are telling them to push back. I wonder how you know this. As a member of 53 years standing, they are absolutely no help to me, as a small one man band practice. The AML compliance regime is mostly a box ticking exercise as far as I am concerned

Thanks (3)
avatar
By Ian McTernan CTA
05th Mar 2024 20:12

Oh look, a thinly disguised advert for 'use our AML software'....

Thanks (6)