Few situations are more unsettling for an accountant than receiving an unexpected visit or telephone call from the police concerning one of their clients. The natural reaction may be one of anxiety or even panic, but as AML specialist David Winch points out, that is precisely the response practitioners should avoid.
The first point to remember is that an enquiry about a client does not mean that the accountant is under investigation. In most cases, the police or another law enforcement agency are investigating the client and believe the accountant may hold documents or information that could assist their enquiries. Keeping this distinction firmly in mind helps ensure that decisions are made calmly and professionally.Client confidentiality remains a fundamental principle of professional practice. An accountant should not disclose confidential information simply because it has been requested by a police officer or investigator. In many cases, the authorities will need to obtain the appropriate legal authority, such as a court-approved production order, before confidential material can be disclosed. It is therefore important to establish precisely what legal powers are being relied upon before providing any documents. (mlrosupport.co.uk)
Where a production order has been issued, it should be read carefully and followed precisely. Accountants should provide the documents specified in the order, but no more than is required. Equally important, practitioners should not attempt to improve, amend or recreate working papers before they are produced. Records should remain exactly as they existed before the request was received.
Another important point concerns communication with the client. Although the instinct may be to telephone the client immediately, doing so could interfere with an ongoing criminal investigation. Unless there is a clear legal basis for informing the client, practitioners should avoid making contact about the enquiry. (mlrosupport.co.uk)
The article also highlights the importance of avoiding informal discussions with investigators. Producing documents under a lawful order is one matter, but answering questions, offering explanations or expressing opinions about a client's affairs is quite another. If there is any uncertainty about the extent of your obligations, legal advice should be sought before responding.
For many practitioners, the likelihood of receiving such an enquiry is relatively small. Nevertheless, having an internal procedure setting out how staff should respond can prevent confusion and reduce the risk of an inappropriate disclosure. A simple checklist covering who should be notified within the firm, how legal authority should be verified and when external legal advice should be obtained can prove invaluable.
The key message is straightforward. Stay calm, understand the legal basis of the request, comply with any lawful obligations and continue to respect your professional duties throughout the process. Careful, measured responses protect both the interests of the client and the integrity of the practice.
For a fuller explanation of the issues, together with practical guidance on what to do and, equally importantly, what not to do, David Winch's original article is well worth reading on the MLRO Support blog.
