Ethics Ch6 Part 3

Question 1

Customer due diligence (CDD) - the process of evaluating a prospective business decision by investigating relevant financial legal and other important info about the other party.

Answer 1

Before and accountant enters into a new business relationship. When the accountant suspects that money laundering may be taking place, and where the accountant is dubious about info the client has given them about the clients identity or when the accountant is entering into a transaction with a client for a significant amount t of money.

Question 2

To carry out a sufficient CDD the accountant must…

Answer 2

Have a detailed look at the client and the way they operate to decide whether they wish to enter into a professional relationship with them.

Question 3

CDD should include…

Answer 3

Verifying the clients identity, should understand who all beneficial owners are (not just the people that run it) the accountant must asking carry out a verification on this person, the accountant must als ensure what the client wants from the relationship.

Question 4

When an accountant is unable to carry out an adequate CDD they must…

Answer 4

Decline the assignment , of the accountant suspects money laundering this should be reported to the NCA through a SAR or to the ,only laundering reporting officer MLRO

Question 5

How to carry out a CDD

Answer 5

Ask to see their passport and explain why they must view this she should also do the same with Mikes co-owner

Then discuss with mike exactly what he wants from the professional relationship usually included in the letter of engagement

Question 6

Keeping records of customer due diligence

Answer 6

The regulations by the money laundering regulations include that a record of CDD has been performed.

Including copies of CDD evidence that was used to verify the clients identity. Eg passport details they must be kept for 5 years with the date the accounts relationship withe the accountant ends.

A receipt of an invoice supporting s client receipt of a large cash payment these must be kept for 5 years stating the start date

Question 7

Statutory code of practice

Answer 7

Statutory law or statute law is written law set down by a body of legislature

Statutory code must be created by legislation and will apply to a number of company’s

Question 8

Voluntary code

Answer 8

Created by the organisation

Question 9

5 key organisational ethical values a business busked include in its code of practice

Answer 9

Being transparent,

Reporting financial information clearly

Being open and honest about accepting gifts

Paying suppliers a fair price and in time

Providing fair treatment and decent wages

Question 10

Can the NCA bring disciplinary procedures again the accountant for unethical behaviour

Answer 10

No

Question 11

Can the company the accountant works for bring disciplinary procedures again the accountant for unethical behaviour

Answer 11

Yes

Question 12

Can the AAT bring disciplinary procedures again the accountant for unethical behaviour

Answer 12

Yes

Question 13

The 3 pieces of legislation and regulations that relate to money laundering

Answer 13

Proceeds of crime act 2002

Terrorism act 2000

The money auditing regulations 2007