Cambodia’s accounting and auditing professions recently came under heightened scrutiny as the national framework intensifies its focus on preventing illicit financial flows. A workshop led by the country’s regulatory authorities targeted reporting entities within the professional accounting sector, signalling a marked shift in the country’s approach to anti-money laundering (AML) and counter-financing of terrorism (CFT). The financial crime dimension of this development is significant. Weak spots in professional services are often exploited for layering, integration and obscuration of criminal funds, and bringing the accounting and auditing domain into sharper supervisory focus is a pivotal step. This article examines the evolving AML landscape in Cambodia, explores how the accounting sector intersects with money laundering vulnerabilities, and unpacks why this regulatory push matters from a financial crime standpoint.
Table of Contents
What the regulation change means for the accounting sector
The country’s legal and regulatory architecture for AML/CFT has been overhauled over the last several years. The 2020 Law on Anti-Money Laundering and Combating the Financing of Terrorism replaced the earlier 2007 law and associated sub-decrees. The newer law provides more specific definitions of high-risk activities, expands the range of reporting entities, and raises penalties for non-compliance.
Professional accounting and auditing firms now face explicit obligations: conduct enhanced customer due diligence (CDD) when necessary, verify beneficial ownership more robustly, report suspicious transactions, maintain records, and appoint compliance officers. These developments reflect a growing recognition that accountants and auditors are core gatekeepers whose services can facilitate or conceal illicit finance if left unchecked.
In this context, the workshop convened by the accounting and auditing regulator plays a dual role: build capacity within the sector and send a signal that the DNFBP (designated non-financial business and profession) space is now firmly in AML/CFT focus.
Money laundering risks inherent in the accounting & auditing profession
Money laundering frequently exploits weaknesses in professional service providers. Accounting and auditing firms may act — often unintentionally — as conduits for criminals to legitimise illicit proceeds through corporate structures, fictitious invoices, trust entities or shell companies. The layering and integration stages of money laundering demand the complicity — or at least the negligence — of professionals who enable complex structures without verifying underlying activities or sources.
In Cambodia’s setting the risks are even more pronounced: the country’s economy remains highly cash-based and dollarised, the regulatory environment has had historic gaps in supervision of DNFBPs, and the banking sector is dominant but still evolving its AML controls. According to the national risk assessment, the accounting and auditing profession was identified as a sector with “medium” vulnerability for money laundering risk. The combination of high volumes of domestic cash transactions, informal economy linkages, and longstanding weak oversight of beneficiary ownership makes professional accountants and auditors a particularly sensitive node.
From a compliance perspective, accounting firms must pay special attention to: high-risk clients, use of nominee directors, frequent restructuring of companies, large cash deposits, cross-border flows where the source is opaque, and clients from jurisdictions with weaker AML regimes. Enhanced due diligence must be applied to politically exposed persons (PEPs) and trust arrangements. If firms fail to detect or report suspicious activity, they become enablers of illicit finance.
How the recent workshop ties into money laundering prevention
The nationwide workshop focused on the standards issued by the international standard-setting body for AML/CFT — Recommendations 13, 14, 15 and 16 and Immediate Outcome 4 — which emphasise reporting obligations, supervision of DNFBPs, and transparency around beneficial ownership and corporate vehicles. By targeting accounting and auditing firms, regulators are reinforcing that these concepts are not theoretical but operational requirements.
From a money laundering perspective this is significant because improving DNFBP compliance closes a gap in the anti-illicit-finance value chain. When accountants and auditors are trained to recognise red-flags (such as unexplained transactions, mismatched source of funds, complex ownership structures), they act as an additional layer of defense. The workshop thus seeks to raise professional awareness of how money laundering schemes exploit the accounting sector — for example through invoice manipulation, phantom companies, trust services, or the movement of funds via audit clients.
Furthermore, the regulatory focus is aligned with the national AML/CFT strategy, which calls for a risk-based approach, enhanced supervision of DNFBPs, and stronger public-private cooperation. By elevating the accounting sector’s role, Cambodia is acknowledging that illicit financial flows are not always confined to banks but often routed through seemingly legitimate professional channels.
Implications for compliance officers and audit firms
For compliance officers in audit firms or accounting practices, the heightened scrutiny means that internal controls must be strengthened. Key actions include reviewing client onboarding and KYC processes, enhancing monitoring of client transactions and corporate restructuring, ensuring beneficial ownership data is captured and verified, and training staff to recognise typologies of money laundering rather than treating AML as a bank-only issue.
Audit firms should integrate AML/CFT risk assessments into their engagements: when clients are engaged in high-risk sectors, cross-border operations or complex ownership arrangements, enhanced due diligence is required. Firms must escalate suspicious activity reports to the relevant financial intelligence unit when indicators of laundering or terrorism financing emerge. The regulatory environment now holds firms to account not only for traditional audit quality but also for their role in the broader financial crime ecosystem.
From a strategic compliance standpoint, firms should map their exposure: identify how many clients fall into the higher risk categories, whether internal policies reflect the expanded legal requirements, whether the appointed compliance officer has adequate resources, and whether training programmes exist for accountants and auditors on AML/CFT. Because penalties have increased under the 2020 law, failure to act may result not only reputational harm but also regulatory sanctions.
The broader financial crime environment and future outlook
Cambodia’s anti-money laundering regime has progressed, but gaps remain. According to the latest follow-up report on AML/CFT compliance, the country made tangible improvements since its mutual evaluation, especially in banking and payment services, yet still faces technical deficiencies regarding supervision of DNFBPs including accountants and auditors. The accounting sector’s inclusion in supervisory efforts signals a shift in the enforcement horizon.
From a money laundering mitigation standpoint, the emphasis on corporate transparency, beneficial ownership, and cross-sector cooperation is essential. As Cambodia continues to attract foreign investment and expand its financial services ecosystem, the integrity of its professional services sector becomes more critical. Accounting and auditing firms play a frontline role in safeguarding investors, preserving the integrity of financial flows, and supporting national efforts against illicit finance.
Regulators, firms and compliance professionals must treat this moment as an inflection point. The move to bolster the accounting sector is not a one-time event but part of a continuing journey. Firms that adapt quickly will not only comply but also position themselves as trusted advisors in a market where financial crime risk is under growing international scrutiny.
Related Links
- National Risk Assessment Report Cambodia for Money Laundering & Terrorist Financing
- Prakas on Anti-Money Laundering and Combating the Financing of Terrorism (Relating to DNFBPs)
- Cambodia’s New Law on Anti-Money Laundering and Combating the Financing of Terrorism 2020
- Mutual Evaluation Report Cambodia 2023 Follow-Up
Other FinCrime central News Related to Cambodia
- How Huione Group Laundered $4 Billion Through Crypto Loopholes
- Inside the Global Laundering Machine of Prince Group TCO
Source: Khmer Times
Some of FinCrime Central’s articles may have been enriched or edited with the help of AI tools. It may contain unintentional errors.
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