by John McCarthy Consulting Ltd. | Mar 21, 2026 | Blog, News
If you have clients in the high value goods dealer (HVGD) sector, then you will need to be aware of this case.
According to the website of the AML Compliance Unit of the Department of Justice HVGDs ‘are businesses involved in the sale of goods of high value where the trader accepts cash payments of €10,000 either in one transaction or a series of linked transactions. Examples of these businesses include antique dealers, boat and car sales, dealers in precious stones, jewellers.’
In a recent February 2026 case the Dutch branch of Louis Vuitton suffered a €500,000 penalty in an out of court settlement, for significant violations of the Money Laundering and Terrorism Financing Prevention Act in the Netherlands.
The underlying criminal case against the three individuals involved remains active, reflecting a trend where regulatory authorities often prioritize corporate accountability through financial sanctions while simultaneously pursuing criminal prosecutions against the specific actors who orchestrated the laundering scheme. The three main suspects face prosecution in a Rotterdam court.
The sanction followed a comprehensive police investigation into a sophisticated money laundering network that utilized luxury retail channels to disguise the origins of criminal proceeds.
The company was found guilty of falling short of the AML requirements by allowing a single customer to conduct a series of high-value transactions without triggering the necessary internal red flag alerts or verification procedures. The failure to monitor and report suspicious activity enabled a criminal organization to convert more than €2 million in cash payments over a multiyear period from 2021 to 2023.
HVGD retailers are expected to not only:
- Identify their customers, but also
- Investigate the source of funds when transactions meet certain risk profiles.
In this case, Louis Vuitton allegedly ignored multiple red flags, including the frequent use of different aliases by a recurring customer and the sheer volume of physical currency being exchanged for designer handbags. The acquisition of these goods was not for personal use but was instead a critical step in a value transfer process known as the Daigou trade. The UK National Crime Agency produced a detailed report on the Daigou AML phenomenon in 2019.
The Daigou model involves the purchase of luxury items in Western markets for resale in territories where such goods are more expensive or heavily taxed, such as China. The use of luxury retail items as a vehicle for laundering is particularly attractive to criminal groups because these products maintain high resale value and are easily transportable.
From 1 January 2026, the Netherlands has implemented a ban on accepting cash payments of €3,000 euros or more for professional sellers of goods. This same €3,000 threshold will apply in Ireland once legislation enacting the 6th AML Directive comes into force within the next two years.
This legislative change is specifically designed to eliminate the room for manoeuvre previously enjoyed by those who structured payments just below the old €10,000 threshold, which still applies in Ireland for the time being.
How can John McCarthy Consulting help?
Our audit file review service is available either on-site or remotely where we will provide you with a written report benchmarking your audit file against the appropriate standards. You will receive a gap analysis of where your firm stands on a particular assignment within clear direction as to appropriate action to consider for improvement.
For more on engagement and representation letter templates and a variety of CPD webinars on money laundering and other accounting/audit related topics, please go to our website for:
- Anti-Money Laundering Policies Controls and Procedures Manual (March 2022) — View the table of contents
- Letters of engagement and similar templates—Please visit our website here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items bought together.
- ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard. We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. Please contact John McCarthy FCA by email at john@jmcc.ie.
by John McCarthy Consulting Ltd. | Mar 2, 2026 | Blog, News
We complete many audit cold file review assignments every year. Whilst every audit file is different, and the approach by each firm varies, there are common themes in many of the reviews we undertake. Here we look at three of the most common issues and how firms should deal with them.
IT Systems and Controls
Compliance with ISA (Ireland) 315 ‘Identifying and Assessing the Risks of Material Misstatement’ still causes problems even though the standard came into effect for accounting periods beginning 15 December 2021. Frequently, auditors fail to properly document not only key transaction cycles but also the specific control activities required under ISA 315.26 which may not be part of the transaction cycle. As a result, walkthroughs of the transaction cycle to confirm:
- Design,
- Operating effectiveness and
- Implementation
do not always cover the controls required to be reviewed.
Audit files often overlook the requirement to consider the broader control environment including areas such as:
- risk management,
- how systems and controls are monitored,
- how the culture of the entity contributes to the control environment and
- how the control environment interacts with outsourced service providers like payroll, for example.
It is not sufficient to only document the key business cycles. The audit file must also document the overarching control environment as part of the audit risk assessment.
A useful IT Controls Questionnaire (as a downloadable Word document) to help with documenting part of this process, is available on our website, for €60+VAT at this link.
Going Concern
Many audit files don’t reflect the approach to fulfil the requirements of ISA (Ireland) 570 on Going Concern.
The audit work on going concern that is evidenced on the audit file often neglects to show that management have first of all prepared their own going concern assessment, which is supposed to be reviewed and appropriately challenged by the auditors.
Instead, files often include detailed notes, prepared by the auditors, explaining why the audit team believe the entity to be a going concern, but with little evidence of a challenge of management’s assumptions included an assessment of the budgets and forecasts prepared by management. It can appear that the files include a going concern assessment prepared for management by the auditors, which an inappropriate non-audit service.
Firms are required to show that they have documented management’s assessment of going concern and show how they have tested management’s assumptions, being careful not to be biased in favour or against any particular outcome.
Fraud
Quite often we see on audit files the following text or something similar – ‘the management tell us there has never been a fraud, so therefore there is no fraud in the latest financial year’’.
This approach hardly displays the kind of scepticism required by the standard. For example, ISA (Ireland) 240.13 states (our underline) ‘the auditor shall maintain professional scepticism throughout the audit, recognizing the possibility that a material misstatement due to fraud could exist, notwithstanding the auditor’s past experience of the honesty and integrity of the entity’s management and those charged with governance.
Auditors, please also note the three Appendices at the back of ISA 240 which are not new and are well worth a read, when planning an assignment:
Appendix 1 – Examples of Fraud Risk Factors;
Appendix 2 – Examples of Possible Audit Procedures to Address the Assessed Risks of Material Misstatement Due to Fraud (we call this the ‘Auditors Toolbox’); and
Appendix 3 – Examples of Circumstances that Indicate the Possibility of Fraud.
How can John McCarthy Consulting help?
Our audit file review service is available either on-site or remotely where we will provide you with a written report benchmarking your audit file against the appropriate standards. You will receive a gap analysis of where your firm stands on a particular assignment within clear direction as to appropriate action to consider for improvement.
For more on engagement and representation letter templates and a variety of CPD webinars on money laundering and other accounting/audit related topics, please go to our website for:
- Anti-Money Laundering Policies Controls and Procedures Manual (March 2022) — View the table of contents
- Letters of engagement and similar templates—Please visit our website here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items bought together.
- ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard. We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. Please contact John McCarthy FCA by email at john@jmcc.ie.
by John McCarthy Consulting Ltd. | Feb 22, 2026 | Blog, News
The fallout from the Carillion case continues. On 16 February 2026 the UK Financial Conduct Authority issued a Final Notice and fined Richard Howson, former group chief executive of Carillion plc a total of £237,700 after he withdrew his challenge to the original penalty decision made in 2022. He was CEO of the group until July 2017. In October 2023 he was banned from acting as a company director for six years.
Howson, one of two executive directors on the Board, was aware that Carillion UK and Ireland construction business was in trouble. He failed to reflect this in company announcements or alert its board and audit committee, leading to poor oversight. Ultimately the company had a £200 million black hole.
Howson’s responsibilities included working closely with the group finance director (the other executive director on the board) to ensure Carillion communicated effectively with investors and had appropriate internal control processes. Provisions made on four of the largest projects operated by Carillion were insufficient to cover the loses expected and he did not inform the Board or the Audit Committee about these under-provisions.
In Ireland, there were at least six school projects affected by the collapse of Carillion which were:
- Loreto College, Wexford;
- Coláiste Raithín, Bray;
- Ravenswell Primary School, Bray;
- Tyndall College, Carlow;
- Carlow Institute of Further Education, and
- Eureka Secondary School, Kells.
Bespoke Audit Training at a location of your choice
If you would like a quotation for a tailored audit training session to include the latest accounting changes in FRS 102 (leasing and revenue recognition) dealing with issues like the Carillion case and how to spot these issue in your work, please contact is at john@jmcc.ie.
For more on engagement and representation letter templates and a variety of CPD webinars on money laundering and other accounting/audit related topics, please go to our website for:
- Anti-Money Laundering Policies Controls and Procedures Manual (March 2022) — View the table of contents
- Letters of engagement and similar templates—Please visit our website here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items bought together.
- ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard. We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. Please contact John McCarthy FCA by email at john@jmcc.ie.
by John McCarthy Consulting Ltd. | Feb 22, 2026 | Blog, News
The International Standard on Quality Management (ISQM) 1 has now been in place since 15 December 2022. Have you reviewed your ISQM in action and updated it for any root cause analysis carried out in the interim?
The standard requires firms to record quality objectives in six key areas. These are:
- Governance and leadership;
- Relevant ethical requirements;
- Acceptance and continuance of client relationships and specific engagements;
- Engagement performance;
- Resources; and
- Information and communication.
The first of these areas is Governance and leadership. This is of paramount importance to quality management because it drives how the firm is perceived by its Partner, staff, audit clients and ultimately the public. Governance and leadership principles serve as the framework for how the firm’s decisions are made.
The standard has enhanced requirements regarding the firm’s commitment to quality through its culture.
4 Key Areas of Quality
The requirements now also focus on 4 key areas:
- The firm’s public interest role;
- The importance of professional ethics, values and attitudes;
- The responsibility of all personnel for quality relating to the performance of engagements or activities within the Statement of Quality Management (SoQM), and their expected behaviour; and
- Quality in the context of the firm’s strategic decisions and actions (e.g. will we expand the Tax Department and offer tax planning services to our private company audit clients?), including the firm’s financial and operational priorities.
There are requirements that:
- Address leadership’s behaviour and commitment to quality, and their accountability for quality;
- Address the organizational structure of the firm and the firm’s assignment of roles, responsibilities and authority; and
- Address resource needs, and resource planning, allocation and assignment, which also include financial resources for matters like up-to-date software and training.
This brief blog is only a summary of the main requirements.
For more assistance please see our ISQM Toolkit or if you prefer to chat through the different audit risks and potential appropriate responses presented by this standard, please call or e-mail John McCarthy FCA on Governance and leadership or e-mail him at john@jmcc.ie
Other publications and AML webinar
by John McCarthy Consulting Ltd. | Feb 15, 2026 | Blog, News
The CPI, or the Corruption Perceptions Index (CPI) is (according to the publishers Transparency International) the leading global indicator of public sector corruption and provides a comparative snapshot of 182 countries and territories. The latest index, for 2025, was published last week (10 February 2026) at this link.
It is often used by MLROs as a supplementary tool to assist in their understanding of money laundering risks in overseas territories.
Transparency International (TI) is a Berlin based non-profit organisation set up by former employees of the World Bank. The index is calculated using data from 13 external sources (including interviews of businesses around the globe) and scores countries out of 100, meaning that the higher the score, the lower the level of corruption is in the country. In this index, Denmark comes out best with a score of 89 in this year’s report – a drop of one point compared to 2024.
Ireland has a score of 76 (compared to 77 in the 2024 report) out of 100, meaning it ranks 15th out of 182 countries (a drop of four places compared to its ranking in the 2023 index).
As a result of this poorer score – Transparency International (TI) Ireland has called on the Government to strengthen transparency and oversight across political finance, corporate and financial services regulation. TI warned that the State remains exposed to emerging corruption risks that receive less public attention but may have significant long-term consequences.
See our ISQM TOOLKIT at this link. We can tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. Please contact John McCarthy FCA by email at john@jmcc.ie.
For AML training and compliance please send a mail to john@jmcc.ie.
For audit cold file reviews and tailored training sessions explaining more about various topics like AML, Audit, FRS 102, please send a mail to john@jmcc.ie.
For more on engagement and representation letter templates and a variety of CPD webinars on money laundering and other accounting/audit related topics, please go to our website for:
ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard. We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. Please contact John McCarthy FCA by email at john@jmcc.ie.
by John McCarthy Consulting Ltd. | Feb 2, 2026 | Blog, News
The move away from using human beings in professional services has already started.
In May 2025 the UK Legal sector regulator, the Solicitors Regulatory Authority approved Garfield Law, as the first fully AI-driven law firm, to operate without human lawyers.
Garfield offers businesses and individuals cost-effective legal services, such as debt collection, at substantially lower rates—starting at just £2 for initial actions.
The firm was Co-founded by former litigator Philip Young and quantum physicist Daniel Long. Garfield initially concentrates on small claims debt collection and aims to recover billions in unpaid debts and streamline court processes using AI.
Pursuing claims in the UK under £10,000 is typically seen as too costly or time-consuming. The English small claims Court process is perceived as confusing and intimidating, especially for sole traders and smaller businesses.
See our ISQM TOOLKIT at this link. We can tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. Please contact John McCarthy FCA by email at john@jmcc.ie.
For AML training and compliance please send a mail to john@jmcc.ie.
For audit cold file reviews and tailored training sessions explaining more about various topics like AML, Audit, FRS 102, please send a mail to john@jmcc.ie.
For more on engagement and representation letter templates and a variety of CPD webinars on money laundering and other accounting/audit related topics, please go to our website for:
ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard. We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. Please contact John McCarthy FCA by email at john@jmcc.ie.
