What are AML checks for accountants?
AML checks for accountants are the anti-money laundering steps accounting firms must take on their clients where the law covers them: verifying the identity of each client and its beneficial owners, assessing the money laundering risk of the work, monitoring the relationship, keeping records and reporting suspicions. The checks are often called KYC, for know your customer.
Also calledKYC for accountantsclient due diligenceanti-money laundering compliance
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- UK law
- Money Laundering Regulations 2017
- EU
- AML Regulation applies 10 July 2027
- Core steps
- ID, risk, monitoring, reporting
How AML rules apply to accountants
In the UK, the Money Laundering Regulations 2017 cover external accountants, auditors, insolvency practitioners and tax advisers. Firms must assess their own risk, apply customer due diligence before taking on a client, apply enhanced checks to higher-risk clients such as politically exposed persons, train staff and appoint a reporting officer, and are supervised by their professional body or by HM Revenue and Customs. In the EU, auditors, external accountants and tax advisors are obliged entities under the anti-money laundering directives, and from 10 July 2027 under a directly applicable Regulation, (EU) 2024/1624. US accountants are not generally covered by the Bank Secrecy Act's AML programme rules, which apply mainly to financial institutions. Credas and SmartSearch run electronic identity verification, document checks and sanctions and PEP screening for firms.
Common questions
What is customer due diligence?+
Identifying the client and verifying that identity from reliable independent evidence, identifying beneficial owners of companies and trusts, and understanding the purpose of the relationship. It is repeated or updated when risk changes.
Can accountants verify identity electronically?+
Yes, where the method is reliable and suited to the risk. Electronic checks against credit, government and sanctions data, often combined with document and face matching, are widely used for low and standard risk clients.
What happens if an accountant suspects money laundering?+
Staff report internally to the firm's nominated officer, who decides whether to report to the authorities, in the UK through a suspicious activity report to the National Crime Agency. Tipping off the client is an offence.
AML and identity check software for accountants
Part of Accountio’s accounting technology coverage · Glossary
