ICAEW’s AML Supervision Report 2025/26 brings good news for accountancy firms, and a warning.
The good news: ICAEW completed 1,608 monitoring reviews, 35% more than last year, and 84.5% of firms were compliant or generally compliant, up from 80.0%. Findings on client identification, client risk assessments and verification all more than halved.
The warning: fines rose from £197,706 (41 fines) to £1,052,619 (53 fines). ICAEW says a small number of serious, higher-risk cases drove the rise, including a single fine of £735,000. And only 14.8% of firms were rated fully compliant, down from 19.4%.
Where firms are still falling down
Ongoing customer due diligence is still the most common finding, at 7.8% of firms. The report is specific: some firms updated CDD for some clients but not all, considered changes but didn’t record them, or relied on an electronic system that “does not clearly evidence the review”. ICAEW expects a fresh look whenever a trigger event happens, such as a new service, a change of key office holders or a politically exposed person.
Four areas got slightly worse: firm-wide risk assessments, AML training, policies and procedures, and CDD on new clients.
What this means in practice
Firms are doing the work. They can’t always prove it. Client risk assessments were often discussed but not fully documented.
That’s a process problem, and it gets harder as a firm grows. Make your CRM the record: each client’s risk rating, review date, ID expiry and Companies House changes in one place, with reminders going to the responsible manager or partner before a review falls due.
Supervision is moving to the FCA, with firms transferring in tranches from late 2028. Until then, the Money Laundering Regulations apply in full. Whoever reviews you next, a clean, evidenced CDD trail is the best preparation.