AML/CTF Compliance for Accounting Firms
Are you confident your accounting practice meets its AML/CTF obligations when providing designated services?
In short
From 1 July 2026, accounting firms that provide designated services, such as setting up companies or trusts, acting on the sale of a business or property, or handling client money in a transaction, are AUSTRAC reporting entities under Tranche 2. They must enrol, assess their risk, adopt AML/CTF policies, verify clients, report suspicious matters and keep records for seven years.
Since 1 July 2026, accounting firms that provide designated services have been reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, brought in by the Tranche 2 reforms in the AML/CTF Amendment Act 2024. This means your practice must enrol with AUSTRAC and comply with the full set of anti-money laundering and counter-terrorism financing obligations.
AUSTRAC expects accounting firms to have proportionate, written AML/CTF policies in place from the day they first provide a designated service.
Why are accounting firms now AUSTRAC reporting entities?
Accounting firms play a critical role in the financial system and are often the first point of contact for clients establishing business structures, managing finances, and conducting transactions. This positions accountants as gatekeepers who can identify and prevent money laundering and terrorism financing activities.
Without proper AML/CTF procedures, your firm faces regulatory penalties, reputational damage, and potential legal liability.
Which accounting services are designated services?
Your firm is a reporting entity if you provide designated services including:
- Preparing, arranging, or assisting with transactions concerning buying and selling of business entities, real property, or managing client money, securities, or other assets
- Managing bank, savings, or securities accounts on behalf of clients
- Organising contributions for the creation, operation, or management of legal persons or arrangements
- Creating, operating, or managing legal persons or arrangements, or buying and selling business entities
From 1 July 2026, a firm providing any of these services must be enrolled with AUSTRAC within 28 days and comply with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Routine tax, BAS, bookkeeping, payroll and audit work is not captured.
Key Challenges for Accounting Firms:
- Determining which services trigger AML/CTF obligations
- Conducting customer due diligence on existing long-term clients
- Balancing client confidentiality with reporting obligations
- Identifying and assessing beneficial owners of complex corporate structures
- Training staff to recognise suspicious activities and red flags
How do you build an accounting firm AML/CTF program?
Compliance begins with a comprehensive ML/TF Risk Assessment tailored specifically to your accounting practice. This assessment must evaluate the risks associated with your client base, service offerings, geographic locations, and delivery channels.
Once your risk profile is established, we help you implement an AML/CTF Program that integrates seamlessly with your existing practice management systems and workflows, ensuring compliance without disrupting client service.
What must an accounting firm's AML/CTF program include?
Customer Due Diligence
Verification procedures for client identity and beneficial ownership before providing designated services
Ongoing Monitoring
Regular review of client relationships and transactions to identify changes in risk profile or suspicious activities
Risk Assessment
Systematic evaluation of ML/TF risks associated with your clients, services, delivery channels, and geographic areas
AUSTRAC Reporting
Timely submission of Suspicious Matter Reports (SMRs) and Threshold Transaction Reports (TTRs) when required
Record Keeping
Secure maintenance of verification documents, transaction records, and AML/CTF compliance documentation for 7 years
Staff Training
Regular training programs to ensure staff understand their AML/CTF obligations and can identify red flags
Where do accounting firms most often go wrong?
Identifying Designated Services
Not all accounting services trigger AML/CTF obligations. Your program must clearly identify which services are designated services requiring customer due diligence. This includes services like setting up companies, managing client trust accounts, or facilitating property transactions - but excludes routine tax and compliance work.
Beneficial Ownership Verification
When working with corporate clients, trusts, or partnerships, you must identify and verify the beneficial owners - the individuals who ultimately own or control the entity. This requires looking beyond the legal structure to understand who actually benefits from your services and client assets.
Recognising Suspicious Activities
Your staff must be trained to recognise red flags such as: clients who are evasive about ownership structures, unusual transaction patterns, requests for unnecessary complexity in business structures, clients from high-risk jurisdictions, or transactions inconsistent with the client's stated business purpose.
Enhanced Due Diligence for Higher Risk Clients
Higher risk clients require enhanced verification and ongoing monitoring. This includes politically exposed persons (PEPs), clients from high-risk countries, complex corporate structures with offshore components, or clients in high-risk industries like cash-intensive businesses or digital currencies.
How does SNS Accounting help accounting firms comply?
We specialise in helping accounting firms navigate AML/CTF compliance. Our team understands the unique challenges accountants face - balancing regulatory obligations with client relationships, determining which services are designated, and implementing practical compliance procedures that work within your existing workflows.
We work with accounting firms of all sizes:
Our accounting firm compliance services include:
- Accounting practice-specific ML/TF Risk Assessment
- Development of tailored AML/CTF Programs for accounting firms
- Identification of which services are designated services
- Customer due diligence procedures and templates
- Beneficial ownership identification frameworks
- Independent Reviews of your AML/CTF Program
- AUSTRAC registration and ongoing compliance support
- Suspicious Matter Reporting (SMR) guidance and support
- Staff training tailored to accounting professionals
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Accounting firm AML/CTF questions answered
What practitioners ask us about Tranche 2, enrolment, client verification and reporting.
Are all accountants caught by the AML/CTF laws?
No. Routine tax returns, BAS lodgement, bookkeeping, payroll and audit are not designated services. Obligations arise when a firm assists a client to buy, sell or transfer real estate or a business, creates, operates or manages a company, trust or partnership, provides a registered office or a nominee director or shareholder, or receives, holds or manages client money or assets as part of a transaction. Firms doing any of those are reporting entities from 1 July 2026.
When did accounting firms have to enrol with AUSTRAC?
Tranche 2 entities, including accountants, could enrol with AUSTRAC from 31 March 2026 and must be enrolled within 28 days of first providing a designated service on or after 1 July 2026. Enrolment is free and done through AUSTRAC Online, and you nominate your AML/CTF compliance officer at the same time.
What does an accounting firm's AML/CTF program need to include?
A written money-laundering and terrorism-financing risk assessment covering your clients, services, delivery channels and the countries you deal with; AML/CTF policies approved by a senior manager and overseen by the partners or board; a management-level compliance officer; client identification and beneficial-ownership procedures; enhanced due diligence for higher-risk clients such as politically exposed persons; ongoing monitoring; suspicious matter reporting; staff training and screening; and an independent evaluation at least every three years.
Do existing clients have to be re-identified?
Not all at once. Clients you already act for are pre-commencement customers: you monitor them, and must carry out initial due diligence only when a significant change in the nature and purpose of the relationship leaves their risk medium or high, or when a suspicious matter report becomes due. Simply providing another designated service is not itself a trigger. New clients must be identified before a designated service is provided.
How does client confidentiality fit with reporting obligations?
The AML/CTF Act overrides confidentiality for the purpose of lodging a suspicious matter report, and a report lodged in good faith is protected from civil liability. You must not tell the client a report has been made (tipping off), although since 31 March 2026 disclosures that would not prejudice an investigation are permitted. Privilege can still attach to material you hold from a client's lawyer: you may withhold what you reasonably believe is privileged, after taking legal advice.
What happens if an accounting firm does not comply?
AUSTRAC can require remedial action, accept enforceable undertakings, issue infringement notices and seek civil penalties in the Federal Court running to tens of millions of dollars for corporations, with separate penalties for individuals involved. Providing designated services while unenrolled contravenes a civil penalty provision. Professional bodies such as CPA Australia, CA ANZ and the IPA treat AML/CTF breaches as conduct matters, and the Tax Practitioners Board may consider them under the Code of Professional Conduct.
How does SNS Accounting help other accounting firms comply?
We are a Tranche 2 reporting entity ourselves and run the program we offer. We scope which of your services are designated, enrol you with AUSTRAC, write the risk assessment and policies, set up identification and reporting procedures inside your practice software, train your team, and arrange the independent evaluation. AUSTRAC requires an evaluator who did not build the program, so we evaluate only programs we did not write. Fixed fees, quoted in advance. General information, not legal advice.