Authority publishes findings of accounting profession thematic review

The Isle of Man Financial Services Authority has published the findings of its thematic review relating to the Island’s accounting profession.

Inspections were conducted to test the effectiveness of Customer Risk Assessments (“CRA”) at a total of 51 external accountant, tax adviser, and/or payroll agent businesses.

A CRA is an important part of a firm’s compliance and risk management framework to help detect and prevent money laundering, terrorist financing, and the proliferation of weapons of mass destruction.

The CRA thematic report, which is available to view online, sets out the findings of the review, including learning points for firms, examples of best practice, and case studies.

As part of the thematic exercise, the Authority reviewed the existing data for 196 firms within the accounting profession. Officers from the AML/CFT Supervision Division then examined CRA templates, and relevant policies, procedures and guidance at 51 selected firms.

The gathering and analysis of CRA data provided the Authority within an insight into how CRAs are being used to evidence a firm’s understanding of the risks they face in relation to their customers. Observations will inform updates to the AML/CFT Handbook and sector-specific guidance documents, as well as the Island’s National Risk Assessment.

By identifying trends and highlighting examples of good and poor practice, the Authority aims to help firms meet their obligations in respect of the AML/CFT Code. This work supports the Authority’s objectives of protecting consumers, reducing financial crime, and maintaining confidence in the Island’s finance sector through effective regulation.

Ashley Whyte, Head of AML/CFT Supervision, said: ‘We wish to thank the firms who took part in the thematic review, which has enhanced our understanding of trends and risks within the sector. Robust CRAs enable firms to identify those customers with higher risk profiles and to put in place appropriate procedures and controls to prevent money laundering, terrorist financing, and proliferation financing. We would encourage all firms to read the report and take any action necessary to ensure their own risk-based compliance regimes in relation to CRAs are effective, up-to-date, and properly documented.’