by John McCarthy Consulting Ltd. | May 10, 2021 | Blog, News
A recent The Irish Times report shows that recorded money laundering crimes more than doubled since the start of Covid-19 compared to the previous year.
524 money-laundering crimes were recorded in 2020, up from 234 in 2019. There were only 83 money laundering offences reported in 2018, and less than 50 a year between 2012 and 2017.
The Garda and Revenue Commissioners received 28,865 suspicious transaction reports (STRs) in 2020. The Revenue state that the yield from compliance interventions directly linked to STRs was €1.6 million.
The number of STRs represents a 13 per cent increase on the 2019 total. This trend represents the changing face of crime in Ireland, more of which is taking place online.
Are you up to date with your Anti-Money Laundering (AML) responsibilities? The law changed on 23 April and we have published our latest AML Policies, Controls & Procedures Manual for 2021.
The Manual follows the enactment of the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 now fully in force. Future blogs will look at various parts of the new and existing provisions of this legislation.
For more blogs please visit this link and for our publications and manuals and services click here.
by John McCarthy Consulting Ltd. | May 4, 2021 | Blog, News
Readers of our regular blog will be delighted to hear that our new Anti-Money Laundering & Terrorist Financing Policies Controls & Procedures Manual is just published and available here on our website for immediate download. This is the first available 2021 AML Manual for Accountants on the Irish market.
The Manual follows the enactment of the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 which has come into effect on two dates:
- 23 April 2021 for all parts of the Act except Section 8 dealing with express trusts; and
- 24 April 2021 – Section 8 is enacted requiring express trusts to keep a beneficial ownership register.
In future blogs we will look at various parts of the new and existing provisions of this legislation.
For more blogs please visit this link and for our publications and manuals and services click here.
by John McCarthy Consulting Ltd. | Apr 13, 2021 | Blog, News
In our last blog, we mentioned the enactment of the latest AML legislation in Ireland which is the ‘Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act, 2021’. In the coming weeks we are going to take a look at the various provisions of the new legislation.
Among the provisions of the new Act is one that amends Schedule 4 of the Act of 2010 to specify further red flags, for transactions that could pose a higher risk of money laundering and/or terrorist financing. The 2021 law is yet to be commenced by statutory instrument.
A higher risk is posed where:
- a customer is a third-country national who applies for residence rights or citizenship in the State in exchange for capital transfers, purchase of property or government bonds, or investment in corporate entities in the State;
- a product, service, transaction or delivery channel involves the use of non-face-to-face business relationships without the use of certain safeguards such as electronic identification means, relevant trust services or other secure, remote or electronic, identification processes that are officially regulated, recognised, approved or accepted;
- a transaction relates to oil, arms, precious metals, tobacco products, cultural artefacts and items of archaeological, historical, cultural and religious importance, or of rare or scientific value, including ivory and protected species.
For more blogs please visit this link and for our publications and manuals and services click here.
by John McCarthy Consulting Ltd. | Apr 6, 2021 | Blog, News
Are your engagement letters up to date? Probably not!
No sooner had we given our letters of engagement on the website a refresh for Spring 2021, than the Government passed into law the latest anti-money laundering legislation. The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 which is number 3 of 2021 was passed into law on 18 March 2021. It awaits commencement by the Minister.
Once it comes into force it will replace the earlier Criminal Justice (Money Laundering and Terrorist Financing) Acts, 2010 to 2018. The new title of the Irish anti-money laundering legislation is the ‘Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021’.
The new legislation primarily deals with cryptocurrency, virtual asset providers (VASPs) and estate agents letting property for €10,000 per month or more, high value art dealers and tax advisers (extending the scope of persons who fall within the definition of ‘tax adviser’), among other matters. Previous legislation only dealt with estate agents buying/selling property.
Readers please note that you will need to change the references on your letters of engagement to ‘Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021’ with immediate effect and update AML Manuals and training etc.
A later blog will go into more detail about the changes.
At www.jmcc.ie we have refreshed all of our letters or engagement templates for these references and we keep adding new templates which may be viewed at this link.
by John McCarthy Consulting Ltd. | Mar 22, 2021 | Blog, News
Recent feedback from professional accountancy body inspections which readers may find useful, has come to our attention. In no particular sequence, this selection of findings applies mainly to small/medium practices:
- Systems of internal controls – there is only a basic understanding on the file – a more complete understanding (with flow diagrams) could be used properly to help reduce sample sizes and cut down on unnecessary audit work.
- Work in progress – the evidence on the audit file of long term work in progress valuations and estimation of profit allocations, can be improved by auditors attending close out meetings as observers alongside senior client personnel when they are negotiating with third party contractors and/or quantity surveyors.
- Recoverability of debtors – not well supported by evidence on the file. The auditor does not display sufficient scepticism (and seek sufficient, independent, corroborative evidence e.g. latest audited accounts of the debtor) and seems to believe, with little questioning, whatever they are told by management about debtor recoverability.
- Net Realisable Value of some stock lines is verified but other material stock lines are ignored with no explanation given for the lack of consistent approach.
- Valuation of investments/properties – no evidence on the audit file that the impact of Covid has been considered. The file could be improved if there was evidence of the auditor speaking with the valuation expert , even to establish a proper understanding of the basis of valuation.
- Letters of representation – over reliance on these letters to close the gap in audit evidence that is apparent elsewhere on the audit file. For example with letters of support there needs to be sufficient, appropriate audit evidence on the audit file that the third party providing the support is ‘good’ for it i.e. a parent company audited accounts showing their solvency or perhaps the support is provided by a significantly wealthy related party Director, for which there ought to be an up to date statement of their personal financial affairs on the file, ideally prepared by an independent financial adviser.
- Fraud – only a cursory consideration given to this area by accepting management assertions too easily. Audit files need to contain evidence of considering the possibility of Government Covid supports being abused in some circumstances and the related possibility of fraudulent accounting to cover up the abuse.
- Going concern/subsequent events – budgets/forecasts not well evidenced on the file for up to 12 months from the date of approval of the financial statements.
- Identification of related parties – not fully documented on file.
- Long association – Responsible Individual in office longer than 10 years – ‘expect challenge’ to scepticism. Need to evidence hot file or second partner review of independence and any other contentious areas of the file, in line with Section 3 of the Auditor Code of Ethics. . Note that the current Ethical Standard for Auditors (Ireland) will be replaced with effect from 15 July 2021.
At www.jmcc.ie we have recently refreshed most of our letters or engagement templates and added some new ones which may be viewed at this link.
by John McCarthy Consulting Ltd. | Mar 1, 2021 | Blog, News
The title of the first session which I am presenting for the Cork Society Topical Practice Issues Event on Thursday 11 March is ‘Don’t Panic in a Pandemic’. The event is online from 9.30am until 12.30pm.
My session (9.30am to 11am) will cover two topics:
- Three new audit standards especially relevant for Covid-19 audits
ISA 540 Audit Estimates – getting the documentation right
ISA 570 Going Concern – challenging management’s numbers
ISA 700 Audit Reports – new style audit reports
- Anti-Money Laundering in the Pandemic – latest developments and traps.
The other speakers at the event are:
Brendan Twohig, MK Brazil on Revenue Audits & Interventions – 2021 ‘hot topics looking at the details required from Revenue in relation to Audits from a practical and advisory manner.
Neil Hughes, Baker Tilly – Managing your Practice in a Pandemic – Neil will look at the Practice Management side of things such as profitability and new ways of working. He will also look at some of the new practices of work that evolved during the pandemic and what might be worth keeping as we come out the other side of it.
More details and bookings – visit this link.
At www.jmcc.ie we have recently refreshed most of our letters of engagement templates and added some new ones which may be viewed at this link.
