AML Obligations for Auditors and Accountants

The United Arab Emirates (UAE) has made significant strides in building a strong Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework. While banks and financial institutions remain primary targets of AML regulations, auditors and accountants — as part of the Designated Non-Financial Businesses and Professions (DNFBPs) — also have important compliance obligations under UAE law.

Given their role in preparing, auditing, and analyzing financial records, auditors and accountants are uniquely positioned to detect suspicious activity and prevent the misuse of corporate structures for illicit purposes.

At Sheikh Anwar Accounting and Auditing LLC, Dubai (MOE Registered Auditor – Entry No. 5817), we provide end-to-end AML advisory and compliance support to accountants, auditors, and businesses across multiple sectors.

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1. Legal Framework Governing Auditors and Accountants

Auditors and accountants fall under the scope of:

• Federal Decree-Law No. 20 of 2018 on AML/CFT.

• Cabinet Decision No. 10 of 2019, which specifies DNFBPs’ obligations.

• Cabinet Decision No. 58 of 2020 on Beneficial Ownership.

• Ministry of Economy (MOE) AML Inspection Guidelines for DNFBPs.

As DNFBPs, auditors and accountants must establish compliance programs, report suspicious activities, and cooperate with authorities.

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2. Why Auditors and Accountants Are Considered High-Risk

The nature of services provided by auditors and accountants exposes them to potential ML/TF risks, such as:

• Advising on corporate structuring, which could conceal beneficial ownership.

• Preparing or auditing financial statements that may include illicit funds.

• Handling large transactions during mergers, acquisitions, or asset transfers.

• Identifying discrepancies in client accounts that could indicate financial crime.

Because of this, regulators require auditors and accountants to act as gatekeepers to ensure the integrity of financial reporting.

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3. Core AML Obligations for Auditors and Accountants

a) Customer Due Diligence (CDD)

• Verify the identity of clients and beneficial owners before accepting engagements.

• Understand the nature and purpose of the client’s business activities.

• Apply Enhanced Due Diligence (EDD) where clients present higher risks (e.g., PEPs, offshore structures).

b) Beneficial Ownership Verification

• Ensure that corporate clients disclose their Ultimate Beneficial Owner (UBO) in line with Cabinet Decision No. 58 of 2020.

• Maintain updated records of UBOs.

c) Record-Keeping

• Retain financial documents, identification data, and correspondence for at least five years.

• Ensure these records are available for MOE inspections.

d) Suspicious Transaction Reporting (STRs)

• File STRs through the goAML portal when unusual or suspicious activity is detected.

• Examples include unexplained discrepancies in client accounts, sudden changes in financial structures, or inflated/false invoices.

e) Internal AML Policies and Training

• Establish AML policies tailored to the audit and accounting profession.

• Appoint an AML Compliance Officer to oversee obligations.

• Provide regular AML training to staff on red flag indicators.

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4. Impact of AML Laws on Auditors and Accountants

The introduction of AML obligations has transformed the auditing and accounting profession in the UAE:

• Compliance Burden: Firms must allocate resources for compliance programs and reporting systems.

• Client Onboarding: Engagement acceptance requires thorough KYC and background checks.

• Increased Scrutiny: The MOE actively monitors DNFBPs and imposes penalties for non-compliance.

• Reputational Responsibility: Compliance enhances credibility and strengthens trust with international partners.

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5. Penalties for Non-Compliance

Failure to comply with AML obligations may result in:

• Administrative fines ranging from AED 50,000 to AED 5 million.

• Suspension or cancellation of audit licenses.

• Reputational damage and loss of professional credibility.

The Ministry of Economy has already issued fines to auditors and accounting firms failing to register on the goAML system or neglecting STR filings.

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6. Best Practices for Auditors and Accountants

To ensure compliance and avoid penalties, auditors and accountants should:

• Conduct periodic risk assessments of clients and transactions.

• Maintain a comprehensive AML Policy Manual.

• Adopt digital tools for KYC, client screening, and STR reporting.

• Engage professional AML advisory firms like Sheikh Anwar Accounting and Auditing LLC for compliance audits, training, and policy drafting.

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Conclusion

AML compliance is no longer confined to banks — auditors and accountants play a vital role in detecting financial crime and protecting the integrity of the UAE’s economy. By adhering to the legal framework, establishing robust internal controls, and proactively reporting suspicious activity, professionals in the sector can safeguard both their businesses and the wider financial system.

At Sheikh Anwar Accounting and Auditing LLC, we specialize in helping auditors and accountants meet AML requirements through tailored advisory, compliance frameworks, and training programs.

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Sheikh Anwar Accounting and Auditing LLC – Dubai, UAE

🌐 Website: www.sa-auditors.com

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