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Money laundering detection and obligation of c as


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Money laundering detection and obligation of c as

  1. 1. Money Laundering Detection and Obligations of CA<br />Kexin Chen Original Production<br />Acc 626 <br />
  2. 2. Agenda<br />What is money laundering and terrorist financing<br />Anti-Money Laundering bodies<br />Requirements for CA frims<br />Establish a compliance program<br />Legislative concerns for other industries<br />Tools used<br />
  3. 3. What is Money Laundering<br />
  4. 4. Why Anti-Money Laundering (AML)?<br />Increase the transparency and efficiency of a economy<br />Eliminate or inhibit criminal activities<br />Eliminate Terrorist Financing activities<br />Tax evaders as use money laundering techniques<br />
  5. 5. Terrorist Financing<br />Similar to money laundering activities<br />Backbone of a terrorist group<br />Source of fund: gang activities, human trafficking, drugs, credit card fraud<br />Uses of fund: Car bomb, train recruit, supplies<br />Effective AML controls could eliminate the flow of funds or predict their activity<br />9/11 and USA Patriot Act<br />
  6. 6. AML in Canada<br />
  7. 7. AML Legislation in Canada<br />Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA)<br />Financial Transaction and Reports Analysis Center of Canada (FINTRAC) <br />
  8. 8. Requirements for CAs<br />CAs on assurance engagements does not have legislative concerns<br />CAs cannot be associated with criminal activities<br />Money Laundering/ Terrorist Financing are criminal activities <br />Increase audit risk and impact audit opinion<br />CICA HB, Assurance Section 5136, Misstatements/ Illegal Acts<br />
  9. 9. Requirement for CAs – Other Engagements<br />(a) engage in any of the following activities on behalf of any person or entity, namely,<br />receiving or paying funds, <br />purchasing or selling securities, real property or business assets or entities, or <br />transferring funds or securities by any means;<br />(b) give instructions on behalf of any person or entity in respect of any activity referred to in paragraph (a); or<br />(c) receive professional fees in respect of any activity referred to in paragraph (a) or in respect of any instructions referred to in paragraph (b).”<br />"Frequently Asked Questions | Chartered Accountants of Canada." Chartered Accountants of Canada. Web. 01 July 2011.<br />
  10. 10. Examples of services<br />Some common activities performed by public accountants that requires compliance to anti-money laundering standards are:<br />offer consulting services and business advice to clients;<br />act as a trustee for clients and any other type of financial intermediaries; and <br />provide income tax advice and tax planning services<br />
  11. 11. What to Report<br />Large cash transactions<br />Cash or cash like transactions over $10,000<br />Suspicious activities<br />
  12. 12. Establish a Compliance Program<br />Designate Compliance Officer<br />Documentation Program<br />Commit Personnel in AML activities<br />Compliance Training<br />Regular Evaluation Program <br />
  13. 13. Requirements for Other Industries<br />Financial Institutions<br />Casinos<br />Money service<br />Dealers in precious metals and stones<br />securities dealers.<br />Receiving or transferring funds<br />
  14. 14. Tools Used<br />Manual<br />Morrill and Janes Bank<br />Computer Assisted Analysis Tools<br />Actimize<br />SAS AML<br />3 Main Features<br />Activity monitoring<br />Watch list filtering<br />Customer due diligence/ know your customers<br />
  15. 15. Did it work?<br />How effective is AML activities?<br />“Bin Laden files showed that terrorist activities have scaled back”<br />CAs role is clear, limit AML activities with:<br />Not accepting audit clients engaged in money laundering<br />Have to report money laundering activities to FINTRAC on other engagements<br />
  16. 16. Thank You<br />