SWEEPING IT UNDER THE CARPET - THE ROLE OF ACCOUNTANCY FIRMS IN MONEYLAUNDERING

White-collar crime is increasing in the Western world. It has been est imated that some pound 500 billion of hot money is laundered through t he world's financial markets each year. Such huge amounts of money can not be successfully laundered without the involvement of accountants ( and other professionals) who use their expertise to create the complex webs of transactions whose purpose it is to conceal and obscure illeg al activity. Despite this involvement, accountants and auditors are ex pected to play a leading role in the reporting of fraud and moneylaund ering. Through a detailed consideration of a case in which a small acc ountancy firm was judged by the UK High Court to be involved in moneyl aundering, the paper explores the relationship between regulators and errant accountants. The reluctance or inability of the regulators to p ursue other accountants and larger accounting firms involved in this c ase suggests that the current regulatory apparatus operates to shield the activities of accountancy firms from critical scrutiny. (C) 1998 E lsevier Science Ltd. All rights reserved.