Industry and government AML guidance refers to the need for a ‘risk-based’ approach and the regulations include provision for ‘proportionate’ actions and policies. This risk-based approach starts with an understanding of the risks faced by your business as a bookkeeping or accountancy practice, and this requires assessment of a wide range of factors.

This overview is known as a Firm Risk Assessment (FRA). The FRA is the starting point from which you will determine your practice policy and especially the methods and procedures you will need to design so that you are able to manage all the AML risks and demonstrate your compliance with the regulations. Some services are recognised as high risk in relation to AML.

So, if your practice offers these services, for example ‘Trust and Company Service Provision’ (TCSP) this needs to be recognised in your FRA and reflected in the procedures you put in place. The Firm Risk Assessment is a broad approach which should grow to cover most aspects of your business. It is a very necessary process at the start of a business practice so that procedures can be designed but it will need to be re-visited, at a minimum once per year, to ensure that any business changes are still covered; for example: where there are new clients or new services provided by your practice. It is YOUR responsibility to review and update your FRA regularly.

For further guidance please see Firm Risk Assessment Video.