Organization and Methodological Support of Financial Monitoring in an Auditing Firm: New Requirements
The requirements to implementation of financial monitoring by auditing entities, as specified by the Law of Ukraine “On prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction” from 06.12.2019 No 361-ІХ, enforced on 28.04.2020, are analyzed. The existence of unclear interpretations of some notions in the this Law of Ukraine or heavy financial sanctions that may be imposed on auditing entities call for elaboration and introduction of internal firm documents concerned with financial monitoring. While in the previous edition of the above Law of Ukraine the features of financial monitoring organization were specified for auditing entities in case of rendering certain categories of services to a client (realty transactions; asset management; raising funds to establish legal entities, support to their operation and management, buying and selling of corporate rights), they are not found in the updated edition of this Law of Ukraine. Therefore, auditing entities need to rely upon general norms of the Law of Ukraine in organizing financial monitoring. A series of administrative documents were elaborated for this purpose: the order on assignment of a person responsible for carrying out financial monitoring; the conclusion of business character test for the candidate on the position of the responsible person, the Rules for financial monitoring of an auditing entity, and the monthly fact sheet of the responsible person about the results of carried out measures on financial monitoring.
The developed Rules of financial monitoring cover all the regulatory requirements for the implementation of financial monitoring, with the possibility of making change in case of need. The Rules must be informed to the staff of an auditing entity, engaged in rendering auditing and non-auditing services, through the involvement in internal training on financial monitoring issues. Apart from the Rules, it is proposed to supplement the working documents supporting the financial monitoring procedures by the following sections: (i) “Documentary support to financial monitoring of auditing entities”; (ii) “Personnel and personnel training on financial monitoring issues”; (iii) “Documentary support to interactions with the State Service of Financial Monitoring of Ukraine, ministries and administrative departments”, which are supposed to help auditing entities to fully observe the regulatory requirements and avoid heavy financial sanctions on the part of controlling and regulatory bodies.
Pro zapobihannya ta protydiyu lehalizatsiyi (vidmyvannyu) dokhodiv, oderzhanykh zlochynnym shlyakhom, finansuvannyu teroryzmu ta finansuvannyu rozpovsyudzhennya zbroyi masovoho znyshchennya [On prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction: the Law of Ukraine from December, 06, 2019, No 361-IX]. zakon.rada.gov.ua. Retrieved from http:// https://zakon.rada.gov.ua/laws/show/361-20 [in Ukrainian].
Balanutsa O. O. (2011). Mistse ta rol finansovoho monitorynhu v Ukrayini yak osnovopolozhnoho chynnyka efektyvnoyi borotby derzhavy z lehalizatsiyeyu (vidmyvannyam) koshtiv ta finansuvannyam teroryzmu [The place and role of financial monitoring in Ukraine as a fundamental factor in the effective struggle of the state against money laundering and terrorist financing]. Zbirnyk naukovykh prats Natsionalnoho universytetu derzhavnoyi podatkovoy isluzhby Ukrayiny – Collection of scientific works of the National University of the State Tax Service of Ukraine, 1, 35–42 [in Ukrainian].
Dmytrenko E. S. (2017). Okremi problem mekhanizmu pravovoho zabezpechennya finansovoyi bezpeky derzhavy ta shlyakhy vyrishennya [Some problems of the mechanism of legal support of financial security of the state and ways of the solution]. Pravove rehulyuvannya ekonomiky – Legal regulation of the economy, 16, 54–63 [in Ukrainian].
Dmytrenko E. S. (2014). Rol finansovoho monitorynhu u minimizatsiyi latentnosti zlochyniv, peredbachenykh stattyamy 209 ta 209-1 Kryminalnoho kodeksu Ukrayiny [The role of financial monitoring in minimizing the latency of crimes under Articles 209 and 209-1 of the Criminal Code of Ukraine]. Naukovyy chasopys Natsionalnoyi akademiyi prokuratury Ukrayiny – Scientific Journal of the National Academy of Prosecutors of Ukraine, 1, 43–50 [in Ukrainian].
Sukhonos V. V. (2010). Vzayemodiya prokuratury iz subyektamy finansovoho monitorynhu [Interaction of the Prosecutor’s Office with the subjects of financial monitoring]. Visnyk prokuratury – Bulletin of the Prosecutor’s Office, 12, 30–35 [in Ukrainian].
Khmelyuk A. A. (2014). Finansovyy monitorynh: subyekty ta obyekty v Ukrayini [Financial monitoring: subjects and objects in Ukraine]. Naukovyy visnyk Natsionalnoho universytetu DPS Ukrayiny (ekonomika, pravo) – Scientific Bulletin of the National University of the State Tax Service of Ukraine (economics, law), 1(64), 174–180 [in Ukrainian].
Pro zapobihannya ta protydiyu lehalizatsiyi (vidmyvannyu) dokhodiv, oderzhanykh zlochynnym shlyakhom, finansuvannyu teroryzmu ta finansuvannyu rozpovsyudzhennya zbroyi masovoho znyshchennya [On prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction: the Law of Ukraine from October, 14, 2014, No 1702-VII]. zakon.rada.gov.ua Retrieved from http:// https://zakon.rada.gov.ua/laws/show/1702 - 18 [in Ukrainian].
Denysyuk S. F. (2011). Zlochynnadiyalnist: ponyattya, struktura ta kharakterystyka elementiv [Criminal activities: concept, structure and characteristics of elements]. Pravo i bezpeka – Law and Security, 1(38), 135–139 [in Ukrainian].
Abstract views: 85 PDF Downloads: 32