The Institute of Chartered Accountants in England and Wales (ICAEW) has revealed that 80% of member firms were found to be compliant or generally compliant with anti-money laundering (AML) regulations, according to its AML supervision report for the financial year 2024/25. 

This figure is marginally lower than the 80.6% compliance rate recorded in the previous year, 2023/24. 

In the recent reporting period, ICAEW conducted 1,185 monitoring reviews, up from 1,112 reviews completed in 2023/24.  

The data indicates an increase in the share of firms assessed as fully compliant, with this figure rising from 13.9% to 19.4% year-on-year. 

The review process led to 237 firms being instructed to carry out further actions to address deficiencies, using either informal or formal measures.  

Additionally, financial penalties were imposed on 41 firms, totalling £197,706. Three members also lost their membership. 

ICAEW said it applies a risk-based framework when performing inspections, ensuring all firms are reviewed at least once every eight years, but with more frequent checks for those flagged as higher risk.  

For this year’s report, the organisation examined trends among non-compliant firms, looking at variables such as firm size and whether shortcomings were isolated or recurring. 

The approach also differentiated between informal follow-up actions overseen by staff and more formal escalations handled by the Practice Assurance Committee. 

Supervising around 9,500 member firms for AML purposes, ICAEW provides various materials and training resources to assist with compliance requirements. 

ICAEW Professional Standards chief officer Duncan Wiggetts said: “Our role as an AML supervisor is to act in the public interest to strengthen trust in ICAEW members and firms by raising standards through a programme of continuous improvement. This year, our commitment to improvement regulation has been clearer than ever. 

“Our work in the anti-money laundering space is vital, not only to protect the integrity of the profession but also to safeguard the wider economy and society from the harms of financial crime.  

This latest report comes as HM Treasury recently concluded its consultation on overhauling AML and counter-terrorism financing supervision within professional services.  

The government has announced its intention to introduce a Single Professional Services Supervisor (SPSS), designating the Financial Conduct Authority (FCA) to take on this role. 

Commenting on the outcome of the consultation, ICAEW Regulatory Board chair Parjinder Basra stated: “We’re disappointed with today’s announcement of the government’s decision to take anti-money laundering supervisory responsibilities away from ICAEW and the other professional body supervisors. 

“We believe that this decision will increase the regulatory burden and costs to firms, making business growth more challenging, while creating greater confusion within the regulatory framework and leading to even more fragmentation in the way key information is held and maintained about the activities of professional services firms. 

“We intend to continue to engage with Ministers and HM Treasury to ensure that all of the ramifications of this decision are understood, and to suggest alternative ways forward.”