The client comes to meet with a companion – is there something wrong and risky!?

In practice, various situations often arise when accounting clients pay more attention to the evaluation of their transactions and doesn’t assess the risks before carrying them out, or create situations that make it necessary to evaluate them more, which is what we try to do by first discussing the situation with the client and trying to find a solution internally. What are top 10 situations in practice:

  • The client comes to a meeting at the accountant’s office to explain the specifics of his economic activity with a previously unknown companion, who takes the initiative during the conversation and speaks more than the client, explaining the nuances of the client’s business better than the client himself, providing conflicting information about the nature of the transactions;
  • The client has made a one-time transaction, which is drastically different from the client’s normal economic activity, which requires the need to become an AML subject, but this is not done;
  • The amount of compensation received as a result of this one-time transaction exceeds ten times the market value within the framework of a normal economic activity cycle between independent market participants;
  • The client receives payment from third countries instead of his/her client for the provided service, without apparent justification;
  • The client receives from his/her client several payments in small amounts in a short period of time, which are immediately transferred to a third party;
  • The client himself/herself lends his company a substantial loan of money with no apparent source of cash, since the client’s only sources of income are the minimum wage in his company;
  • The client works for a long time with significant losses, but at the same time lends his company significant funds, the origin of which is not clear;
  • The order for the client has been placed by a company indirectly subordinated to the state of Belarus under a multi-year contract. The order was placed at the end of 2021. In 2022, the client cannot fulfill this order due to the sanctions regime, because the fulfilled order cannot be sent to the buyer;
  • A thriving construction company has commissioned a 100,000 EUR “management consultancy” from a British residential company, with no tangible result of execution;
  • An advance was paid to the Estonian residence company for the supply of materials, without physically receiving them for more than half a year, whose beneficial owner and board member owns a small car repair shop in Kengarags;

If you need preventive consultation in the evaluation of such or similar risks, so that you do not get into unpredictable economic life situations, or you need daily support in bookkeeping, please contact us right here on our website and our team will hurry to help you.

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