Description: FinTRAC, the Financial Transaction and Reports Analysis Centre of Canada, imposed its first fine on a Canadian bank this past week. The fine of $1.1 million was because a Canadian bank did not report some type of suspicious transaction to the authorities. The only problem was FinTRAC didn’t reveal who got fined. And all of the Big Six Canadian banks said “not me.” One of the criticisms is that if FinTRAC doesn’t say who is guilty, what kind of a deterrent effect does the fine present?
Date: April 6, 2016; updated April 7, 2016
1) What type of activity do you think may have caused FinTRAC to impose this fine?
2) Do you think that FinTRAC’s control would be more effective if the identity of the offending bank was revealed publicly?
3) If you were an accountant tasked with preparing the financial statements of this bank, how would you account for this $1.1 million payment? What type of note disclosure might you consider?