Suspicious activity reporting in the United Kingdom and the United States: statutory obligations of auditors and optimal harvesting of information

Norton, Simon D. ORCID: https://orcid.org/0000-0001-8337-0944 2024. Suspicious activity reporting in the United Kingdom and the United States: statutory obligations of auditors and optimal harvesting of information. Journal of Money Laundering Control 27 (3) , pp. 432-444. 10.1108/JMLC-08-2023-0131

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Abstract

Purpose: This study aims to evaluate the advantages and disadvantages of auditor mandatory suspicious activity reporting versus the exercise of professional judgement in the anti-money laundering regimes of the UK and the USA. Design/methodology/approach: The research draws upon the following sources. Firstly, statistics provided by the UK National Crime Agency, 2019 (NCA) regarding suspicious activity report (SAR) filing rates. Secondly, anti-money laundering legislation in the USA and UK. Thirdly, statements made in the political domain in the USA, particularly those which raised constitutional concerns during the progress of the Patriot Act 2001. Finally, statements and recommendations by a UK Parliamentary Commission enquiring into the effectiveness of the suspicious activity reporting regime. Findings: The UK reporting regime does not accommodate professional judgement, resulting in the filing of SARs with limited intelligence value. This contrasts with discretionary reporting in the USA: voluntary reporting guides and influences auditor behaviour rather than mandating it. Defensive filing by UK auditors (defence to anti-money launderings [DAMLs]) has increased in recent years but the number of SARs filed has declined. Originality/value: The study evaluates auditor behavioural responses to legislative regimes which mandate or alternatively accommodate discretion in the reporting suspicion of money laundering. Consideration of constitutional and judicial activism in this context is a novel contribution to the literature. For its theoretical framework the study uses Foucault’s concept of discipline of the self to evaluate auditor behaviour under both regimes.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Emerald
ISSN:	1368-5201
Funders:	N/A
Date of First Compliant Deposit:	23 April 2024
Date of Acceptance:	8 November 2023
Last Modified:	10 Nov 2024 15:45
URI:	https://orca.cardiff.ac.uk/id/eprint/166524

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