[FIRM NAME] Firm-wide Risk Assessment

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[FIRM NAME] – Firm-wide risk assessmentUnder the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018), it is a requirement for every accountancy firm to have adocumented firm-wide risk assessment. Before beginning this exercise, you should review the; CCABI’s Anti-Money Laundering Guidance For TheAccountancy Sector CCABI’s Anti-Money Laundering Guidance For The Accountancy Sector (AMLGAS). We’d also recommend reading the National RiskAssessment For Ireland and FATF Guidance for a Risk-Based Approach for the Accounting Profession . Trends and risks within money laundering isconstantly changing. As the MLRO, it’s imperative to keep up to date by reading relevant materials such as those listed to help assess the risk associatedwith your firm. The firm wide risk assessment should be reviewed and updated on an annual basis. Below we have created a template with some hintsand tips to aid our firms in completing an AML Firm-wide risk assessment.Assessment of risk[Every accountancy firm will have risks. Therefore, it’s important toidentify them. In this column detail the risks your firm may have]Mitigating actions[In this column, you should state how you will alleviate the risk posed]Client riskThis section is the most significant. The range of clients and the associated risks are diverse and vast. You must consider whether your clients and itsstakeholders have characteristics associated with money laundering, financial crime and terrorist financing. This list is not exhaustive, but here are justsome examples; Unusual or excessively complex ownership structures & undue secrecy Cash-intensive businesses High-Net Worth Individuals or Politically Exposed Persons (PEP) Association with high-risk jurisdictions Criminal convictions or adverse media High-value businesses (e.g. jewellers, car dealerships) Type of Industry/Business of the firm (e.g. MSBs and import/export services would typically be considered as high-risk)Highlight your client risk in this section. It should look something like this We have two clients operating in high risk jurisdictions.Many of our clients operate cash intensive businesses such asrestaurants, hairdressers and bars.We do not have any high-net worth individuals or PEPs. A client risk assessment is completed on each client during the onboarding stage and annually during our ongoing monitoring process.Every client is given a risk rating of either; low, medium or high.

We have several high-value businesses; high-end propertyrental/sales, wholesalers We have one charity. CDD is performed on all clients deemed to be low or medium risk toverify client identity and business activities. EDD, including sanctionsscreening, is performed on all clients deemed to be high-risk; such asthe ones stated in the assessment of risk column. We review the CDDfiles every year. The firm’s policies and procedures list the additionalchecks required such as independently verifying documentationprovided by the client. Staff are provided with training to identify risks. This is conducted bythe MLRO annually and external bi-annually. Training covers; redflags, case studies, relevant AML regulations, tipping-off, CDD, SARs,how to deal with suspicious transactions. An assessment is conductedto ensure staff understanding. All new clients are approved by the MLRO and one partner.Geography riskYou should consider whether your clients are established or linked to jurisdictions that are regarded as high risk of money laundering or terroristfinancing. You should either compile your own list of high-risk jurisdictions in your AML Policy or make use of high-risk lists provided by reputable sourcesincluding: FATF’s high-risk and other monitored jurisdictions European Commission list of countries with weak anti-money laundering and terrorist financing regimes Sanctions List: Central Bank of Ireland, HM Treasury, OFSI, EU and UN. Transparency International - Corruption Perception IndexBelow is a typical example We have clients who are based locally, nationally and overseas.We have reviewed the FATF, European Commission and Sanction list andalthough we have overseas clients, none operate in high risk countries.Although we have no clients operating in high-risk countries, we have systemsand controls in place to address this risk. This includes

Any client based nationally or overseas would be subject to additional checks –as its rare for our firm to offer services to clients outside of the immediatearea. These checks would include Products and services riskIn this section, you should consider whether any of your products or services have attributes known to be used by money launderers or terroristfinanciers.A national risk assessment identified the following areas of business asposing the highest AML risk within the accountancy sector: Trust and company formation services; to mask the ownership ofassets or transfer assets between persons. False Accounting; to provide a veneer of legitimacy to falsifiedaccounts or documents used to conceal the source of funds. Misuse of client accounts; performing high value financialtransactions for clients with no clear business rationale. Exploitation of Tax services; facilitation of Tax Evasion and VATFraud. Misuse of Insolvency Services.Although the list is not exhaustive, you should consider whether you offer theservices outlined and address how you will manage each risk. For example,staff training to identify red flags, EDD etc.You should consider putting into context the scale of risk. For example, if lessthan 1% of your revenue is generated through Trust and company formationservices then it would be reasonable to consider this to be low risk for yourfirm.Transactions riskAs mentioned, misuse of client accounts is currently considered to be a risk within the accountancy sector. If you hold a client account, put into contextthe risk. You should also consider the risk associated with your office account. Below is a typical example Firm holds one client account. It is only used to receive tax refunds fromRevenue. Usually less than five transactions per year. The amounts arealways less than 10k and in line with what we’d expect for the clientsinvolved.We only provide these services to two long standing clients. Funds are alwaysfrom a known and reputable source. Client account is operated by the MLROand one partner only.

Delivery channels riskDo you meet your clients face to face? If not, you may face greater money laundering or terrorist financing risks because it can be more difficult todetermine the identity and credibility of a client, both at the start of a relationship and throughout its course. You should also consider how and why theclient has come to you. Below is an example All our local and national clients are met face to face at onboarding.We do offer online services – but all clients are met face to face at onboardingand typically at least once a year.We do offer remote services to one overseas client.Although we did not meet the client when onboarding, he was referred to mevia a long-standing customer. I conducted a video call with him and conductedEDD. I have since met the client as well.Overall assessment of riskYou should summarise all the above; highlighting the key areas of risk. You should consider listing any other risks you identified that have not alreadybeen mentioned. It’s also beneficial to provide an overall profile of the firm. Below is an example Overall 10% of our client base are considered higher than normal risk, 80% medium/normal risk and 10% low risk. Those considered low risk, in accordancewith the CCABI guidance, are public owner enterprise or operate in an already regulated market.The majority of our clients work in the xxxx sector – so we are familiar with the type of activity and services they would typically offer.Our clients tend to be local and long-standing.We believe the biggest risk to the firm is XXXX. However, we believe we are mitigating this risk by enforcing the following controls. They are XXXX

ActionsFinally, list what actions you will take to address the risk identified. Below is an example ActionPerform annual compliance review (MLROreport)Conduct AML TrainingReview AML P&PsFirm Wide Risk Assessment conducted by: [MLRO NAME]Shared with: X [Partner of firm] and Y [Director of firm]Completed on:Next review date:Delivery date01/01/2020Owner[STAFF NAME]01/03/202001/06/2020[STAFF NAME][STAFF NAME]

The firm wide risk assessment should be reviewed and updated on an annual basis. Below we have created a template with some hints and tips to aid our firms in completing an AML Firm-wide risk assessment. Assessment of risk [Every accountancy firm will have risks. Therefore, it’s important to

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