Understanding and Preventing Money Laundering

Abstract

The abilities and skills of internal auditors suit them well for the war against money laundering. Forensic accounting skills, as well as audit expertise, are needed to help in combating this crime. The development of internal policies, procedures, and controls to prevent money laundering fits within the accountant's abilities and expertise. Money laundering can be defined as a process in which illegally obtained money (e.g. from drug trafficking, terrorist activity or other serious crimes) is given an appearance of having originated from a legitimate source. Although the basic goals of money laundering are no different today than from decades ago, money laundering is now taking place in a high-tech global environment. This article provides background and recent developments in efforts to combat money laundering.