Draft sector risk assessment for Accountants

Draft sector risk assessment for Accountants

• 19 December 2023
• Money Laundering
• South African Accounting Academy

The draft SRA for accountants, provides the risk background and related threats and vulnerability information on the money laundering and terrorism financing risks facing accountants when conducting the services of a trust and company services provider, as envisaged in Item 2 of Schedule 1 of the Financial Intelligence Centre Act, No. 38 of 2001.

The purpose of the sector risk assessment for accountants is to assist accountants in understanding their money laundering and terrorism financing (ML/TF) threats, vulnerabilities and risks and introduce suggested measures to mitigate and manage such ML/TF risks. 

The accounting sector, which is regarded as potentially highly vulnerable for ML/TF) must meet customer due diligence and record-keeping requirements when on behalf of their client, they are involved in:

• real estate transactions, managing money, securities, or other assets;

• managing bank, savings or securities accounts;

• creating, operating or managing companies, or legal persons and arrangements; and

• buying and selling business entities.

Click here to download the Draft SRA:

https://www.fic.gov.za/wp-content/uploads/2023/11/2023.11-Sector-risk-assessment-Assessment-of-the-inherent-money-laundering-and-terrorist-financing-risks-for-accountants.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The Financial Intelligence Centre Act (FICA) is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  Suppose they don’t comply with the relevant laws and regulations. In that case, you have certain reporting obligations in terms of NOCLAR (Non-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.

• As an auditor and independent reviewer, you need to consider amendments, regulations and guidance that the FIC publishes.

• As an accountant, you should be aware of the inherent money laundering and terrorist financing risks for accountants, and how to assess these risks.

Relevance to Your Clients:

• Relevant entities (specifically accountable institutions) have a duty to comply with the FIC Act, otherwise they could be held liable.

• Relevant entities should be aware of amendments, regulations and guidance published by the FIC.

0 COMMENTS

LEAVE A COMMENT