Who should be the MLRO or nominated officer in a small accountancy practice?
Last updated: July 1, 2026
In a small accountancy practice, the MLRO role is significantly more important than an administrative appointment. It is the point at which internal concerns about possible money laundering are assessed and, where necessary, turned into an external report.
The role needs someone with direct access to the client file and engagement context, as well as the authority to make a reporting decision even when it may disrupt client activity or challenge another person’s judgement.
Note: The formal term used in the Money Laundering Regulations is nominated officer. Yet, in practice, the more commonly used term is Money Laundering Reporting Officer, or MLRO. This article uses MLRO while referring to the same AML reporting function.
Key takeaways
- The MLRO should be someone inside the practice with sufficient authority to act when suspicion arises.
- In a sole-practitioner firm, the reporting responsibility sits with the practitioner rather than an outside appointee.
- AML support from outside the practice should not replace the firm’s own reporting judgement.
- The person appointed must be able to obtain the facts and respond without unnecessary delay.
- Staff should follow the firm’s agreed process and avoid discussing the issue with the client. The MLRO should then decide whether further reporting is required.
The role of the MLRO in an accountancy firm
The MLRO is the person staff go to when they identify possible money laundering during an accountancy engagement.
Once a concern is raised, the MLRO must decide whether it creates reportable knowledge or suspicion. If it does, the MLRO submits a suspicious activity report (SAR) to the National Crime Agency (NCA).
The role can affect whether a transaction or instruction proceeds while a concern is being assessed. When a defence against money laundering (DAML) might be needed before proceeding, the MLRO considers whether to request one.
Sensitivity comes from the tension between reporting duties and client-service pressure. The MLRO may need to pause an engagement, delay an instruction, or make a report even when that creates commercial difficulty.
This is why the appointment needs enough authority and independence for the decision to be made properly.
Who can hold the MLRO role in a small accountancy practice?
Oftentimes, the MLRO appointment will sit with a partner, director, senior manager, or sole practitioner.
The MLRO must be senior enough to review the file and challenge a fee earner’s view when the facts point towards suspicion. Without that seniority or client context, the named MLRO is unlikely to handle a live SAR question properly.
Furthermore, in a sole-practitioner practice with no employees, there is usually no separate person to appoint.
The owner-practitioner is effectively responsible for the entire MLRO function, including assessing internal concerns, deciding whether a SAR is required, and making any necessary report to the NCA.
The appointment should still be treated as a real AML responsibility, despite there being no additional staff.
Why an external AML consultant cannot hold the MLRO role
HMRC states that the nominated officer must be someone in the business or organisation and that the role should not be held by a consultant.
Anti-money laundering advisers can support the practice, but they cannot take on the MLRO function itself.
The role involves receiving internal reports, assessing suspicion, and deciding whether a SAR should be made. Therefore, these are decisions that form part of the firm’s own AML reporting arrangements.
A consultant can also help the practice analyse a difficult issue or understand the relevant guidance. However, the reporting judgement remains with the appointed MLRO, who has authority within the practice and responsibility for its AML controls.
What competence and authority does the nominated MLRO need?
The MLRO needs enough knowledge of the practice to judge concerns properly. This includes understanding the firm’s regulated client services and the relevant risks that arise from them.
The nominated person must also be able to obtain the required information to submit SARs without needing someone else’s permission.
The appointment also requires capacity, as suspicion reports can be time-sensitive, especially when a transaction is about to proceed.
If the MLRO is too busy to review concerns promptly, the appointment can appear adequate on paper while failing in practice.
Role-specific training should cover reporting judgement, confidentiality risks, and updates to relevant obligations.
How can the MLRO role work in a sole practitioner or very small practice?
Due to the size of the practice, one person often holds several anti-money laundering positions, including the MLRO role and wider senior compliance responsibility.
Even so, this overlap needs a clear boundary. Senior management responsibility for the firm’s AML arrangements is connected to the MLRO function, but the reporting decision is separate.
When there are staff, even one part-time employee, they need to know how to raise an AML issue and who provides cover in the MLRO’s absence.
Any deputy or absence cover should be clear enough to prevent an AML concern from being delayed or discussed with the wrong person, with SAR-sensitive cover roles considered as part of employee screening under the Money Laundering Regulations.
If responsibilities are divided, the firm should record who decides whether a SAR is needed and who provides cover when the MLRO is unavailable.
Notify the supervisor and keep the appointment under review
Once the firm has identified who will act as its MLRO, the appointment should be recorded and kept under review. CCAB guidance refers to notifying the firm’s anti-money laundering supervisory authority within 14 days of appointing the MLRO or the responsible senior management person.
The firm should also revisit the appointment when changes in the practice affect the MLRO’s ability to carry out the role. The person appointed still needs to be able to review concerns independently and act promptly when a suspicious activity report is required.
In summary
The right MLRO appointment needs to understand the client file, make the reporting judgement, and act without unnecessary delay.
A simple arrangement can be sufficient in a very small practice, but it still needs to be clear. Staff should know the escalation point, and the appointed person should be able to respond with proper independence.
FAQs
Choose the person who can receive sensitive internal reports, judge them properly, and act without waiting for another person’s approval. While seniority is important, so is practical access to the facts.
Yes. If there are no employees, the sole practitioner will handle the reporting function personally, including any SAR submission.
No. An adviser can provide guidance on interpretation, training, or difficult AML questions, but the named MLRO must be part of the firm.
Staff should report concerns internally to the named MLRO using the firm’s agreed process. They should not investigate concerns informally or raise them with the client.
MLRO’s need enough time to deal with a report before the firm takes the next step, such as progressing a transaction or client instruction.
Review it after a material change in staffing, workload, client base, or internal reporting processes. The firm should also check that its records and any supervisor notifications remain accurate.
References and Source Material
- HMRC, Risks common to accountancy service providers
- Money Laundering Regulations 2017
- HMRC, Appoint a nominated officer and train staff for money laundering supervision
- HMRC, Economic Crime Supervision Handbook (ECSH33111 – Nominated Officer)
- CCAB, Anti-Money Laundering and Counter-Terrorist Financing Guidance for the Accountancy Sector
- NCA, Suspicious Activity Reports
- ACCA, The role of the money laundering reporting officer
