Top Ten Things to do for AML High-Risk Clients

by | Oct 27, 2026 | Blog, News

Higher risk clients trigger additional AML scrutiny by accountants. This additional AML documentation that one is supposed to have on file is known as ‘Enhanced Due Diligence’ (EDD) and the top 10 most important Due Diligence steps to take are as follows:

  1. Additional background checks: These checks are accompanied by a more in-depth investigation into the customer’s background, including sanctions checks.
  2. Source of funds and wealth: Investigate the funds to be used throughout the business relationship and the client’s total wealth, supported with documentary evidence, ideally sourced from independent credible sources.
  3. Independent verification: Seek independent verification of the customer’s identity documents and establish the integrity of any other supporting information provided.
  4. Increased monitoring: Increase the frequency and intensity of transaction monitoring to detect any suspicious activity as soon as possible.
  5. Third party validation: Obtain information from third party sources, such as credit reference agencies to verify the customer’s information and help better assess the risk.
  6. Obtain senior management approval: Where the client is a Politically Exposed Person (PEPs) as well as reviewing the latest sanctions lists. It’s expected that certain city and county councillors will become PEPs in forthcoming Government AML legislation. It is important for senior management to understand the risk that the accountancy firm undertakes.
  7. Limiting transactions: In certain circumstances, restrict the type and size of transactions the customer can conduct, or limit their access to certain services that the firm provides.
  8. Incoming funds: Require that the initial funds and the first transaction be conducted through a reputable financial institution which will attract more intensive AML supervision.
  9. Ongoing customer reviews: Increase the frequency of subsequent customer reviews to monthly instead of annually.
  10. In extreme cases: Choose to refuse the business with the customer if the risk of money laundering is too high and beyond your firm’s risk appetite.

 

After completing all of the above steps, each firm needs to assess, on an ongoing basis, whether it is really worthwhile dealing with such clients, given the costs of getting the AML risk assessment wrong, versus the benefits of being involved in such transactions.

For those of you still in the process of ISQM 1 implementation, please see our ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please call or e-mail John McCarthy FCA or e-mail him at john@jmcc.ie.

We typically tailor ISQM training and brainstorming sessions to suit each firm’s unique requirements.

Publications:

  • The ISQM TOOLKIT 2022 is available to purchase here.
  • To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.

Recently the CCAB has created an AI Hub which pools together helpful resources for professional accountants in relation to AI and Ethics, created by Member bodies including the ACCA and the Chartered Accountants Ireland.

The hub contains:

  • a range of guidance and checklists about AI;
  • a podcast series of ethical leadership issues discussing the use of AI by the profession;
  • a Statement to the Profession on the Ethical Use of Artificial Intelligence; and
  • six case studies covering a range of fictional scenarios which professional accountants are likely to encounter and use in their work, including specifically for those in practice:
    • AI in collecting audit evidence; and
    • Using synthetic client data for LLM training in a large firm.

All the templates on our website have had a refresh as of June 2026 and the letters of engagement have had a new paragraph added for the potential use of artificial intelligence and machine learning on client assignments along with auto enrolment for payroll assignments. There is a bulk discount (five templates for the price of four) for purchases of five or more templates when purchased in a single transaction.

If you need an up-to-date engagement letter, there is a search bar near the bottom of our home page (www.jmcc.ie) to quickly look up the item you need. More details see here.

For those of you still in the process of ISQM 1 implementation, please see our ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please call or e-mail John McCarthy FCA or e-mail him at john@jmcc.ie.

We typically tailor our training and brainstorming sessions to suit each firm’s unique requirements.

Publications: