THEORETICAL FRAMEWORK:

Figure 1.1 Theory X and Theory Y of Douglas McGregor applied on money laundering

As seen in Figure 1.1, Theory X suggests that authorities are monitoring different
financial institutions in order for them to comply and do their jobs. These financial institutions act
in accordance to the rules and regulations set by the governing bodies because they are
motivated by fear of getting sanctions if they fail to fulfill their responsibilities. On the other hand,
Theory Y implies that financial institutions recognize their duties and they would use their
position for the benefit of the society. In this research, it is expected that the influence of the
Anti-Money Laundering Council over financial institutions is high since they have the
responsibility to investigate and cause the prosecution of money laundering offenses.
The researchers would want to know the influence of these theories and how they are
applied to fight money laundering crimes. This includes the roles of forensic accountants in the
THEORY X THEORY Y
Governing
Bodies
Governing
Bodies
Financial
Institutions
Financial
Institutions
Control
(for
compliance)
Command
Feedback
(to enable
action)
Command
litigation process of money laundering crimes and how these theories affect their jobs in finding
financial evidences regarding the case and presenting them to the court.
Having an effective anti-money laundering system is vital in fighting crimes concerning
this issue. The participation and compliance of banks and other financial systems is highly
needed by the government to establish one. If there are suspicions about this kind of illegal
transaction, investigation will start in order to detect if money laundering is being practiced.
Transactions entered by individuals are monitored through:





Figure 1.2 Transaction Monitoring Process

Figure 1.2 shows the process monitoring the transactions done by the one being
suspected of practicing money laundering. Basically, it begins with the submission of covered
and suspicious transaction reports to the AMLC. Data collecting refers to gathering information
about the client through his bank account and the transactions he entered into. The next step is
to process and filter the data collected for easier analysis. This data then will be examined for
suspicious patterns like series of transactions and transfers of funds. If the AMLC finds out that
money laundering has been committed, it causes the filing of the criminal complaint.
Filing of
Case

Behavior
Diagnosing
Data
Ingestion
Data
Collecting
During the investigation process, the AMLC must obtain sufficient evidence that a
property or proceeds are connected to an illegal activity or money laundering offenses. With
this, forensic accountants will now help and assist in the litigation process. They will gather facts
and information and used what they have gathered as evidence to support the case. They are
given the responsibility of finding financial evidences that will be used against the offender as
well as giving their opinions regarding the matter. They must be able find evidences that are
conclusive and present them to the court.