finance

Money Laundering and financial frauds became common during and before the global crisis
2008. After the crisis special measures have been taken to avoid frauds. Whenever such
activities happens the follow up is done. The task is usually known as follow the money
trail where the regulators analyses the various situations and circumstances and detects the
loopholes that are there in the whole vicious circle. This is done by trained workers in the
department. The money trail is regulated by many ways as mentioned below:

The customer due diligence done, the procedures followed and their compliance procedure
followed.
Testing transactions that involves high-risk operations

Procedures are used to determine that the personnel adhere to anti-money laundering
policies or not

Assessing attendance at anti-money laundering training programs

Examine the accuracy of MIS used during anti-money laundering complaining

Reviewing Suspicious Activity and Transaction Reporting (SAR/STR) systems

The regulators who ensure compliance across the border range across industry.

Money Trail with respect to the following:

FINCEN : For an effective partnership it has been with the Law Enforcements which has
taken special care of following the money trails which provides proper analysis, information
for supporting the investigation, which increasingly help identifying the targets where the
risk or fraud is there. Some financial institutions which van better understand the purpose,
importance and impact of contributing the protection for integrity of the financial markets,
which promote consecutive dialogues for focusing on the aim. The various foreign parts that
are with the Fin CEN like AML/CFT regulatory authorities which have a capacity and
commitment.
 BSA: bank Secrecy act is also known as Currency and foreign transaction reporting Act. It is
an act used to assist the various financial institutions and organizations to report any kind of
financial frauds that are happening and the correct course of action. It is mainly
implemented to stop money laundering. The act mainly emphasizes on the main records of
transaction in cash of negotiable instruments usually more than $ 10000 and reporting is
done in case of any suspicion.
OFAC( Office of Foreign Assets Control) : it is mainly a department of treasury administers
and helps in enforcing trade sanctions according to the rules and policies of the US
government.it main target is usually act involving proliferation and mass weapon deals
which are threat to the country and are a cause of destruction. It handles the assets under
trade and freezes them under US jurisdiction.

FATF (Financial action task force): It is a body setup by the minister of the jurisdiction
which is inter-governmental. Its main objective is to set up such a structure where the legal,
operational measures are so effective to avoid money laundering that fraud doesnt work.
The various financial fraud are to be avoided in any case and an integrity is to be
maintained.it is also a policy making body which generate basic policies to work out the
national legislature reforms in the country,

Patriot Act: it was signed in laws by president George Bush.it is an abbreviation to the
Uniting and Strengthening America by providing Appropriate Tools required to interpret and
obstruct terrorism act of 2001.its main aims are to enhance domestic security against
terrorism, the surveillance procedures, and anti-money laundering to prevent terrorism,
border security and removing obstacles in investigation.

Sarbanes Oxley act: It is also known as the Public company accounting reform and investor
protection act and corporate and auditing accountability and responsibility act. It is also
known as SOX.it was mainly implemented because of the following reasons: The auditors
conflicts, boardroom failures, security analyst conflicts of interest etc.
 Lehman brothers case: It was dependent on the repurchase agreements of the mortgage
properties and it was a financial crisis in the world. SOX are mainly about transparency
accuracy, providing a right to investigate and allow proper surveillance. SOX failed in this
case because it was all about reporting the details the details were correct but it was not put in
action and hence SOX failed. More effective policies have been implemented to curb such a
fraud and it is put in practice. More investor care is ensured and the regulators have been
more care full in handling such cases.
A proper due diligence, pre situation and post situation is very important while any suspicion
is present. In between the lines also a proper investigation continues where the regulators
should be careful of what actually is happening and should happen, is what is said put in
practice or not etc.

If there is a suspicion on any activity around it is obligation to fill a SAR (suspicion activity
Report) we have the right to tell the customer that the transaction has been rejected or is put
to atop due to the given reason and further investigation can be carried out.

If I was an external auditor I would have caught the root cause of the fraud and then worked
on it so that the problems I removed from the root and not from between to just save my bit
of it.

SOX have been successful in following ways:

o It re empowered and reformed the board of directors in corporates

o It always encourage adoption of CEBC(Corporate of Business ethics)

o It helped create the Public company accounting oversight board

o It clarifies the complications in the role of in house counsels

o It laid a cultural root of victims under shareholdings in corporates

o Public companies where more expensive to set and run

o It empowered and enhances SEC

o It helped the private companies work effectively.