Unveiling the dynamics of money laundering in Iraq: Auditors&#039; perceptions, audit processes, and country-specific factors

Al-Refiay, Hussen; ALSELMAN, ABDULRASOOL; Dawood, Mohammed

doi:10.22059/ijms.2025.401165.677942

Unveiling the dynamics of money laundering in Iraq: Auditors' perceptions, audit processes, and country-specific factors

Articles in Press

Document Type : Research Paper

Authors

Hussen Al-Refiay ¹

ABDULRASOOL ALSELMAN ²

Mohammed Dawood ³

¹ Accounting business school university of Kerbala Kerbala iraq

² accounting, business school, kerbala university, kerbala, iraq

³ accounting, business school, Kerbala University, kerbala , iraq

10.22059/ijms.2025.401165.677942

Abstract

Abstract

This paper also examines the perception of auditors regarding some concerned factors to money laundering (ML), including what role and obligation they are anticipated to play as insurers of accounting reports, what audit process was used, and some characteristics of the country in which they performed the audit, influence auditors' detection of ML. The current study employed questionnaires and distributed among Iraqi auditors whose names were registered in the list of official auditors in Iraq for 2024. Results reveal that ML is perceived as a developing issue, which is driven predominantly by political corruption, weaknesses in banking and the system of governance, and weak monitoring by experts such as accountants and auditors. The recipient destinations of the laundered funds reflect local and external channels, where personal networks and business investments dominate. Further analyses show that auditors' mindset toward their work and incorporation of ML factors into audit procedures are pivotal to detecting money laundering. Conditions of individual countries, including legal frameworks, cultural settings, and economic environments, are critical in determining the role of auditors in preventing ML.

Keywords

Red Flags

Money Laundering

Iraqi Auditors

Agency and Fraud Triangle Theory

Counter Terrorist Financing

Subjects