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Picture this: You’re in the middle of year-end, juggling multiple clients, when you get a letter from FINTRAC. Compliance audit.
Your stomach drops.
For Canadian accountants, FINTRAC compliance isn’t optional, and the penalties for getting it wrong are steep. But with the right knowledge and systems in place, staying compliant doesn’t have to be complicated.
Let’s break down what you need to know and how you can protect your clients, your practice, and your peace of mind.
What is FINTRAC?
FINTRAC stands for the Financial Transactions and Reports Analysis Centre of Canada. Think of it as Canada’s financial watchdog — protecting Canadians against money laundering and terrorist financing.
While that might sound far removed from day-to-day accounting work, FINTRAC’s reach extends to any professional who handles client funds or facilitates certain financial transactions. And yes, that includes accountants.
Why FINTRAC Matters for your Practice
This isn’t just about following rules for the sake of it. FINTRAC compliance protects the three things that matter most to your practice:
- Your clients: Proper due diligence helps prevent your clients from unknowingly being involved in financial crimes
- Your firm’s security: Strong compliance programs reduce your exposure to fraud and regulatory risk
- Your reputation: Non-compliance can result in public penalties and hurt to your professional credibility
The bottom line: Failing to comply can result in costly penalties and serious damage to your reputation as a trusted advisor.
Do you need to comply? Here’s how to know
Canadian accountants and accounting firms must comply with FINTRAC if they engage or give instructions for any of the following:
- Receiving or paying funds (including virtual currency)
- Purchasing or selling securities, real property, immovables, business assets, or entities
- Transferring funds, virtual currency, or securities
Important note: FINTRAC compliance is still required even if these activities are performed voluntarily or without compensation.
The good news: some exceptions do apply
You may be exempt from certain FINTRAC obligations if you’re:
- Authorized to act on behalf of an insolvent or bankrupt entity
- Acting under a security agreement
- An accountant working in the capacity of an employee (except when reporting suspicious transactions)
FINTRAC obligations also don’t apply to work done as part of an audit, review, or compilation engagement.
When in doubt, always refer directly to FINTRAC’s obligations and guidance for accountants.
How to achieve FINTRAC compliance
Build a written compliance program
Your compliance program is the foundation. At a minimum it must include:
- A designated compliance officer to oversee the program
- Policies and procedures for detecting and reporting suspicious activity
- A risk assessment for potential money-laundering or terrorist-financing exposure
- Ongoing training for your team
You need to review and document your compliance program at least every two years and ensure it follows ministerial directives.
Pro tip: Don’t just create this program and file it away. Make it a living document that evolves with regulatory changes and your practice’s growth.
Meet “Know Your Client” (KYC) requirements
You must verify the identity of clients involved in:
- Large cash, virtual currency, or suspicious transactions
- Receipts of funds of $3,000 or more
Client verification can be done through a government-issued photo ID, a Canadian credit file, or other FINTRAC-approved methods. But it doesn’t stop there.
Once your client is verified, you must:
- Confirm beneficial ownership details
- Take reasonable steps to identify politically exposed persons or heads of international organizations
- Monitor the business relationship
- Meet third party determination requirements Follow record keeping and transaction reporting standards
To be compliant, you must submit the following to FINTRAC:
- Suspicious Transactions Reports
- Listed Person or Entity Property Reports
- Large Cash Transaction Reports
- Large Virtual Currency Transaction Reports
- Sanctions evasion
You’re also required to keep certain client identification and transaction records on file.
Treat technology as your compliance partner
Modern payroll and accounting software can significantly reduce your FINTRAC compliance burden by:
- Automatically tracking and flagging large transactions
- Maintaining audit-ready records with proper timestamps
- Securely storing client verification documents
- Generating reports that align with FINTRAC requirements
At Wagepoint, we’re building FINTRAC compliance into our payroll platform — so you can focus on serving clients, not chasing paperwork.
Stay current on FINTRAC requirements
Regulatory requirements change — and staying ahead keeps you compliant. To make it easier:
- Subscribe to the FINTRAC mailing list for the latest updates
- Join Canada’s Payroll Collective for ongoing compliance best practices
With the right resources, accountants can go the extra mile to protect their clients and practice.
Beyond compliance: The real-value of FINTRAC readiness
Let’s be honest: FINTRAC compliance isn’t just about checking boxes and filling out forms. It’s about preventing fraud and showing your clients that you’ve got their backs.
When you have a robust compliance program in place, you’re telling your clients that you take their financial security seriously. You’re showing regulators that you run a professional, responsible practice. And you’re protecting yourself from the reputational and financial damage that comes with non-compliance.
Think of FINTRAC readiness not as red tape, but as a competitive advantage. In an industry built on trust, demonstrating that you have systems in place to prevent fraud and protect client data sets you apart.
