An analysis of the FIAU implementing procedures for accountants and auditors in local audit firms

Abstract

Purpose: This study investigates the impact of the Implementing Procedures Part II for Accountants and Auditors (IPAA), issued by the Financial Intelligence Analysis Unit, on audit firms in Malta. It seeks to explore whether the IPAA introduced new compliance expectations or merely reiterated existing obligations, and to assess its influence on firms’ AML frameworks and engagement procedures. Design: The research adopts a qualitative methodology based on twelve semi- structured interviews with representatives of local audit firms and relevant industry entities. The interview process was designed to capture practical insights from professionals and compare through thematic analysis. Findings: The findings reveal that while audit firms were largely compliant with existing AML obligations prior to the IPAA, it clarified certain grey areas and helped standardise interpretation across the profession. However, recurring ambiguities remain, particularly concerning the classification of relevant activities and risk assessment for audit-specific services, suggesting that future updates to the IPAA would further enhance its utility. Conclusions: The IPAA played a clarifying role rather than a transformative one. Despite its supplementary nature, it was widely regarded as a beneficial tool for audit firms. Its effectiveness, however, depends on continuous guidance from the FIAU and regular engagement with practitioners to ensure practical alignment. Implications/Value: This study contributes to the academic and professional understanding of regulatory implementation within the auditing sector. It underscores the value of targeted guidance documents and highlights the importance of sustained dialogue between regulators and subject persons.