d) The main differences between ML and TF are:

- For ML to occur, the funds involved must be the proceeds of criminal conduct, and the
mental element is normally for profit.
- For TF to occur, the source of funds is irrelevant, i.e. the funds can be from a legitimate
or illegitimate source, and the mental element is normally ideology or cause driven.
- TF occurs before the physical act of terrorism, while ML occurs after the predicate
offence physical act has been completed.

Responsibilities of reporting firm:

 Enterprise Risk Assessment
 AML / CFT programme, policies and procedures
 Appointment of Compliance Officer and determining the TOR’s,
 Make comprehensive plan for Staff vetting and training relating to development in AML
 Conduct of ongoing CDD, including business relationship monitoring
 when establishing a client relationship
 when carrying out an occasional transaction
 where there is a suspicion of money laundering or terrorist financing\
 where there are doubts concerning the veracity of previous identification information.
 Suspicious transaction report(STR) and currency transaction report (CTR) to FMU
 Record keeping
 Independent audit
A.7

- We will evaluate the competence, capabilities and objectivity of that expert, for this we
will check whether his name is available in list of PBA or SBP, further we will check
whether he has the Pakistan Engineering Council Certificate.
- Obtain an understanding of the work of that expert, for the purpose we can meet with
management expert, further we can check the previous experience with same valuer.
- Evaluate the appropriateness of that expert’s work as audit evidence for the relevant
assertion.
- Inspection of the written instructions given to the valuer by Poppy Co which should
include the objectives and scope of the work, the intended use of the valuer's work and
the extent of the valuer's access to records and files
- Consideration of the assumptions and methods used by the valuer to ensure they are
reasonable based on other audit evidence and the auditor's previous knowledge of Poppy
Co
- An evaluation of the method used to measure fair value to ensure consistency with IAS
40
- Examination of the valuation report to ensure each property has been valued consistently
and that the date of valuation is reasonably close to Poppy Co's year-end
- Physical inspection of the valuation properties to ensure their condition is in line with the
valuation report
- Inspection of purchase documentation for the investment properties to ensure that any
revaluations made in the year of purchase are reasonable and not significantly different
from the purchase price

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