Compliance determinants of anti-money laundering regime among professional accountants in Malaysia

Abstract

Purpose Money laundering offences occur worldwide, with recent discussions involving issues related to the low levels of compliance among professional accountants towards the anti-money laundering (AML) regime. Under the regime, professional accountants are required to implement compliance programs (Know Your Customer, Clients Due Diligent, Record Keeping) and to submit any suspicious transaction report encounters to the authorities. Due to the lack of research in this sector, this study aims to examine the compliance determinants towards AML regimes among professional accountants in Malaysia. Design/methodology/approach Premised on protection motivation theory, a questionnaire was developed and distributed among 1,100 professional accountants. Of which 275 questionnaires were returned and subjected to regression analysis. Findings Based on the findings, “perceived risk of non-compliance” and “awareness of Anti-Money Laundering Act 2001 and Financial Action Task Force standard” were significantly related to the level of compliance towards the AML regimes. Meanwhile, “compliance cost” did not influence the compliance behaviour of professional accountants. Moreover, the findings demonstrated that awareness programs among the reporting institutions should be enhanced, specifically the professional accountants. Practical implications This study recommends the professional bodies particularly professional accountants in Malaysia to establish a blueprint as a guideline for money laundering reporting. Originality/value This is one of the pioneer studies looking into AML compliance determinants among the professional accountants in Malaysia. This study will provide insights on the current practices and recommend ways to improve the current AML reporting practices among the professional accountants.

The Role of Regulatory Technology & Bankers to Prevent Money Laundering in Bank

“…Competency is important in detecting money laundering activities; training conducted by banks is used to improve staff's ability to detect money laundering continuously. The result of this hypothesis is in line with a previous study (Ahmad Tarmizi, Zolkaflil, et al, 2022;Bahrin et al, 2022;Dusabe, 2016;Usman Kemal, 2014) Money laundering crimes continue to change in method and typology; for this reason, there is a need for continuous efforts to improve the competency of bank employees, especially AML Officers, through training. OJK regulation Number 12/2017 article 61 requires continuous training for employees of financial institutions related to provisions, techniques, methods, typologies, and APUPPT policies and procedures.…”

“…Competency significantly affects an individual's ability to complete tasks (Ahmad Tarmizi, Zolkaflil et al, 2022) (Ahmad Tarmizi, Zolkaflil, et al, 2022). Competence affects the level of compliance in implementing anti-money laundering programs (Ahmad Tarmizi, Zolkaflil, et al, 2022).…”

Machine learning in predicting anti-money laundering compliance with protection motivation theory among professional accountants

“…Earlier research has been substantiated by the results, indicating that compliance can be enhanced by competence (Verkijika, 2018). Competence refers to an individual's aptitude and ability to handle tasks or make decisions and can have a significant impact on their capacity to complete tasks (Tarmizi et al, 2022). For accountants in particular, this entails their comprehension of anti-money laundering (AML) rules, their ability to spot suspicious transactions, and their proficiency in submitting suspicious transaction reports (STRs).…”

A Systematic Literature Review on the Roles and Ethical Dilemmas of Professional Accountant in Money Laundering

“…While this involvement results in the majority of them having good and average knowledge of Iranian AML rules and regulations and the recommendations outlined by the Financial Action Task Force (FATF), the same group exhibits weakness and an average level of familiarity with Wolfsberg Group standards, Basel standards, and other AML directives and best practices. Hence, comprehensive and relevant training and competence play an important role in the execution of an AML program (Tarmizi et al, 2022). Therefore, it is essential for the central bank, professional accounting bodies, and Big 4 audit firms to provide more comprehensive and in-depth awareness programs for professional accountants.…”

“…As part of their roles, professional accountants are required to have a robust understanding of internal and external audits, along with a comprehension of the nature of the client's business and industry. This competency empowered them to identify any suspicious transactions and activities (Alawaqleh et al, 2018;Tarmizi et al, 2022). Furthermore, the importance of external auditors's familiarity with the audit process has gained significance in addressing the issue of money laundering (Al-Husseini, 2018).…”