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Caught With Their Hand In The Cookie Jar

Being an accountant puts you in a position of trust, as an accountant your reputation depends on being honest and transparent.

Not only should you be trustworthy in your dealings with others but there is also the responsibility to maintain the integrity of whichever company that you work for. An important aspect of this is anti-money laundering responsibilities that an accountant has.

There is a drive for more anti-laundering rules to be created to provide more transparency and scrutiny of financial services to increase public confidence. Money laundering is a criminal act whereby the source of money is concealed to hide and conceal criminal activity. Laundering occurs via three processes; placement, layering and integration.

During placement funds are received, layering is where the assets are then moved around different institutions to prevent it from being traced and finally the money is placed into an existing business, known as a front which legitimizes the money making it appear clean.

The complexity of money laundry processes makes it very hard to associate and trace the illegal assets gained. There have been estimates which consider that money laundering represents $500 billion to $1 trillion worldwide.

Accountants and auditors, even new ones that are on the bottom rung of the ladder, have a responsibility to flag up any concerns they have that money may be illegally gained to the directors of the company within which they work. It is their responsibility to closely scrutinize where money comes in from and where it goes, and any questionable transactions need to
be further examined.

Financial institutions also have a duty to report unusual transactions. Money service businesses including banks, casinos and broker-dealers have to file a currency transaction report if any cash transactions exceed $10,000 under the Bank Secrecy Act. Customer identification checks is also a requirement of financial institutions in order to identify money laundering activity.

Where an accountant or financial institution fails to report suspicious activity then they themselves may be prosecuted where an accountant is seen as aiding money laundering by facilitating different accounts for a customer then they will be regarded as an accomplice.

Read More: http://www.nysscpa.org/cpajournal/2003/1203/dept/d125003.htm

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