The anti-money laundering expectations gap in Iran: auditor and judiciary perspectives
| DOI | https://doi.org/10.1108/JMLC-09-2020-0105 |
| Published date | 08 February 2021 |
| Date | 08 February 2021 |
| Pages | 681-692 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Vahid Molla Imeny,Simon D. Norton,Mahdi Moradi,Mahdi Salehi |
The anti-money laundering
expectations gap in Iran: auditor
and judiciary perspectives
Vahid Molla Imeny
Ferdowsi University of Mashhad, Mashhad, Iran
Simon D. Norton
Department of Accounting and Finance, University of Cardiff Section of Accountancy and
Finance, Cardiff, UK
Mahdi Moradi
Faculty of Economics and Administrative Sciences, F erdowsi University of Mashhad,
Mashhad, Iran, and
Mahdi Salehi
Ferdowsi University of Mashhad, Mashhad, Iran
Abstract
Purpose –This study aims to compare judicial and audi tor expectations of audit in the detectio n
and reporting of money laundering in Iran. It also aims to assess the implications of expectations gap
for the reliability of data provided to the Financial Action Task Force (FATF) in its blacklisting
policy.
Design/methodology/approach –Questionnaires were administered to auditors to determine
perceptions of their anti-money laundering (AML) reporting obligations. These were also completed by
Iranian judges who hear money launderingprosecutions and who agreed to participate in the research. The
group was createdthrough the “snowballing”technique.
Findings –There is significant divergence between judges and auditors regarding the latter’sAML
reporting obligations.Self-perception among auditors regarding investigativeduties is insufficiently aligned
with expectationsof the FATF, particularly where there is use of corporate structures,charities and trusts in
which identity of trueowners, of payers and payees of funds cannot be accurately verified.This gap presents
a significantterrorist financing risk.
Practical implications –The expectations gap makes training in forensic accounting, as well as
compliance withinternational reporting expectations, a matterof urgency for the Iranian auditing profession.
The judiciaryneeds to be more aware of international expectations.
Originality/value –Data regarding judicial expectations of auditors’AML reporting obligations is difficult
to obtain and of a highly sensitive nature. This research has obtained such data which has relevance to the FATF
blacklisting policy, and tointernational organisations tasked with disrupting terrorist financing networks.
Keywords Iran, Forensic accounting, Anti-money laundering reporting, FATF blacklist,
Judiciary auditor expectations gap, Snowballing technique
Paper type Research paper
1. Introduction
An expectation gap arises when one party has a view regarding its duties and responsibilitiesbut
a party to which it is accountable perceives these differently (Liggio, 1974;Jennings et al.,1993;
Anti-money
laundering
expectations
gap
681
Journalof Money Laundering
Control
Vol.24 No. 4, 2021
pp. 681-692
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-09-2020-0105
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