Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA BT – FIA FBT › Money laundering
- This topic has 1 reply, 2 voices, and was last updated 2 months ago by Ken Garrett.
- January 14, 2023 at 4:41 am #675877DdeepParticipant
- Topics: 7
- Replies: 4
Hello tutor, i got stuck on this que can you explain please!
Which of the following procedures should help auditors detect money laundering?
(1) Validating the source of the company’s funds
(2) Reviewing gross profit margins
(3) Analysing cash flows to identify unusual amounts of cash
(4) Checking cash payments to establish reason for payments
1 and 4 only
1, 2, 3 and 4
3 and 4 only
2 and 3 onlyJanuary 14, 2023 at 7:21 am #675892Ken GarrettKeymaster
- Topics: 10
- Replies: 10224
I think all could be used.
1 Fairly obvious. Determine that the money has come from legitimate sources.
2 Introducing laundered cash into the reported revenue of an otherwise legitimate business is a classic money laundering technique, but this often inflates the GP margin.
3 Lots of cash moving around for no good reason is a sign of money laundering, often used to obscure the sources and destinations of the money.
4 Money laundering usually involves ending money somewhere where it is difficult to trace so unexplained payments need ro be investigated.
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