Advice please - SOCA

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
I am having a disagreement with a client. I am sure I am right, having checked with both HMRC and Croner helplines.
So, what should I do if the client is insistent about the way the return is completed?
Should I report to SOCA?


Should I just resign next week and not complete the return? If I do that, should I still file a SOCA report?


Is it my duty to stick around, make a report, and wait to hear if I get consent to act?

AAT member support are quite "woolly" with their advice and the SOCA website doesn't help much.

I have read various forums which suggest there is no need to report unless a crime has been committed. Is there a crime if the VAT return has not been submitted?
I've also read the comment "sack the client and report him" when the professional is being put under pressure by a client.


Any comments appreciated, even if it's just emotional support. This is the first time I have dealt with anything like this and I'm finding all the advice quite confusing.

Thank you


Sheelagh

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    Hi Sheelagh,

    When something like this happens it puts us in a rather dubious position. I fully understand your dilemma.

    Basically, we have to act on clients instructions which, rightly or wrongly, are the terms in which we are engaged.

    You should file a report to SOCA if they have committed a money laundering offence. if you resign without completing the VAT return then you do not have to file a report because they could actually see sense and complete their own return correctly (doubtless this would be the case) but speculation is not a reportable offence.

    If you prepare the VAT return based on your clients requirements then you should make a report to SOCA as quite clearly the return is wrong. Looking at it from an accountancy point of view - we prepare accounts from clients information and explanations. If they are wrong we discuss the errors with the client and ask them to correct them - if they don't we still issue the accounts based on their explanations and refer the matter to SOCA. I suspect the same would apply to VAT returns. Clearly you cannot act for a client who is trying to evade VAT!

    Have a word with the AAT's Ethics helpline - I think they're better equipped to tell you how to resign in the circumstances rather than member support services. I've got a link here which is the members in practice line - they should be able to put you through to the ethics helpline.

    http://www.aat.org.uk/about/display/store3/item46012/

    Good luck and keep me posted as to how you get on with this.

    Kind regards
    Steve

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    Hi Steve

    Thank you for your response and for putting it so clearly. I've found it really hard to see the wood for the trees and this has really helped me to focus on the basic points I need to think about.

    I will have another word with the eithics helpline tomorrow to take advice on giving notice for resigning. I don't put a notice period in my letter of engagement. This particiular client once asked my what my notice period would be. I gave him my usual reply - One month, but as the relationship is based on trust I wouldn't expect either side to adhere to that if trust was compromised.

    I'll keep you posted.


    Thank you again

    Sheelagh
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    If you need a second opinion I would recommend contacting David Winch of MLRO Support.

    Although he offers his opinion for a fee, if you post a Money Laundering related question on AccountingWeb he is usually very quick to respond.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    Thank you for the tip Dean.
    I spoke to the AAT professional ethics helpline again and their basic advice seems to match up with the professional ethics handbook - don't do anything which you would not be prepared to defend in court, but still submit a report.


    The resignation issue seems to have paled into insignificance now - I'll sort that out over the next couple of weeks. One more thought - what can I tell their accountant or any new bookkeeper if I'm asked?


    Sheelagh
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    You cannot tell them anything about the reasons surrounding your suspicions because this could be classed as "tipping off".

    The money laundering information I have available states:

    "Whilst the existing accountants might feel obliged to mention any suspicion they might have regarding suspected money laundering, to do so they run a serious risk of tipping off. At this stage, there may be no easy way of telling if the incoming accountant is related to, or working with, the suspected money launderer. Expressing such concerns orally rather than in writing does not alleviate the situation".

    Note - the citation above is from my professional institute's guidelines. I'm very sure, however, the AAT's guidelines on money laundering will be the same as the above.

    Kind regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    Hi Steve
    Your reply makes good sense so had another 30 minute search around this website and found this hidden in the Money Laundering FAQ section
    Q. Do you have to advise a new accountant who is replacing you, that you have filed reports to NCIS, or should this be treated in confidence?
    A. It is probably a good idea to inform an incoming accountant that you have made a disclosure report and to state the basis of your knowledge or suspicion or reasonable grounds etc... The proviso is that the incoming accountant must belong to a regulated professional body. The reasons are:

    ? the tipping off provisions do not prohibit all disclosure, only those likely to prejudice an investigation, as an incoming accountant cannot divulge the content of the professional enquiry response to his client (due to his own professional standards and the POCA). Therefore, disclosure to an incoming accountant could be said to be unlikely to prejudice an investigation; and
    ? the whole thrust of the money laundering legislation, as it applies to the regulated professions, is to prevent money launderers obtaining professional services and expertise. Disclosure to an incoming accountant would help achieve this objective.

    Please be assured I have not set out to contradict you here - merely to demonstrate what a minefield this is ,and how difficult it is to access good quality information.

    Regards

    Sheelagh


  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    Hi Sheelagh,

    I don't - for one minute - think you're contradicting what I've said. I know only too well how much of a minefield it is out there and the difficulties you face along with other MIP's. I sometimes think the AAT would do a lot better, as would the other professional bodies, than rather than churning out rules and regulations on a periodic basis which we have to adhere to, that they would do better to support us more when it comes to actually interpreting them. Not everything is black and white - which professional bodies assume when they make up their rules. Money Laundering legislation is the latest in a long line of regulations issued by various institutes which have become extremely arduous.

    The regulations have been subject to a lot of change over the last couple of years. This is mainly due to the demise of NCIS and the new regulatory body for money laundering, SOCA. The information you found on this site refers to NCIS which is now no longer in existence. NCIS saw its demise in 2006.

    The guidance in my money laundering file is issued by our Institute (ACCA). They spell it out(surprisingly) clearly - we must not disclose a report to an incoming successor. They even go as far as to say that the money laundering officer must not discuss the case with any other staff member - not even the staff member that reported to the money laundering officer. I am assuming that these regulations are global and that each institute does not tailor them to their own needs.

    I've sent you a PM with my contact details. Please feel free to contact me if you need any clarification. I can point you in the direction of the paragraphs I have cited.

    Keep me posted on how you get on with this as I would be interested to hear how the AAT view this situation.

    Best regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    For any interested readers, there has been a thread on accounting web today about whether or not to inform an incoming accountant - link here

    http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=168363&d=1031&h=1021&f=1026&dateformat=%25o%20%25B%20%25Y
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Advice please - SOCA

    Clearly this is an article most MIPs will undeniably be interested in and which (especially in Sheelagh's case) is well-timed.

    I know the money laundering regulations are not new and there has been a lot of issues surrounding it in the press over the last few years. It is worrying when you have to rely on independent sources, such as accountingweb, for a definitive answer to such a high profile issue. I am aware that the AAT's guidance in this area maybe somewhat vague.

    It does ask the question as to how the professional institutes (such as AAT) are keeping their members up to date with developments in this area. I think the MIPs should certainly be asking the AAT to support them more when it comes to issues such as this as I'm sure the AAT would be the first ones to cite ethics in the event of a client bringing a case against a MIP.

    In any event it would seem feasible to suggest the professional institutes maybe consider stop spending huge amounts of members subscriptions on meaningless projects such as new logos and websites that don't work and invest that money in providing suitable communication techniques which are able to give members a more clearer understanding about more relevant matters - for example updating information Sheelagh has quoted from their website re NCIS! :oops:

    Kind regards
    Steve

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