For many UAE businesses, monthly closing and ledger reviews are seen as routine accounting exercises—focused on accuracy, reconciliation, and reporting deadlines. However, in 2025, UAE regulators increasingly view these processes through a very different lens: as a critical AML control point.

Recent inspections and enforcement actions show that undetected AML risks often sit quietly inside monthly closings, masked by journal entries, reconciliations, and balance adjustments that were never questioned deeply enough.

This article explains how monthly closings and ledger reviews can hide serious AML risks, why real estate remains a high-risk focus area, how regulators apply the risk-based approach (RBA) in practice, and what businesses must do to strengthen AML controls embedded within finance operations.

Why Monthly Closings Matter for AML Compliance

Monthly closings are where:

• Transactions are summarized

• Adjustments are posted

• Balances are finalized

• Financial reality is “locked in”

If suspicious activity is not identified before the books are closed, it becomes:

• Harder to trace

• Easier to normalize

• More difficult to explain during inspections

Regulators increasingly ask not just what is recorded—but why it was recorded without challenge.

Why Real Estate Is Especially Exposed During Closings

Real estate businesses face heightened AML risk during monthly closings because:

• Transactions are high-value and infrequent

• Payments may be staggered or structured

• Multiple parties are often involved

• Timing differences are common

Criminals prefer real estate because:

• Large sums can move in a single deal

• Ownership can be obscured through entities or nominees

• The sector has historically been less regulated than banking

• Once funds convert into property, they become harder to trace or seize

If ledger reviews do not question how and why balances exist, real estate transactions can pass through accounting systems with minimal scrutiny.

Where AML Risks Hide Inside Ledger Reviews

1. “Temporary” or Suspense Accounts

Balances parked repeatedly in:

• Suspense accounts

• Clearing accounts

• Advances from customers

may signal:

• Unclear source of funds

• Third-party involvement

• Structuring or layering activity

If these balances roll forward month after month without explanation, regulators consider this a red flag.

2. Repeated Manual Journal Entries

Manual journals are one of the most scrutinized areas in AML inspections.

Red flags include:

• Frequent top-side entries

• Adjustments posted late in the month

• Entries without clear narration or support

These entries can unintentionally—or deliberately—mask unusual financial flows.

3. Ledger Balances That Don’t Match Client Risk Profiles

If accounting records show:

• High transaction volumes

• Large advances

• Significant settlements

but AML files classify the client as low-risk, inspectors see a disconnect between finance and compliance—a common finding in enforcement actions.

4. Unexplained Write-Offs and Reversals

Repeated reversals, write-offs, or reclassifications may indicate:

• Failed transactions

• Abandoned deals

• Attempts to normalize suspicious flows

Without documentation, these entries raise concerns about transaction intent and legitimacy.

5. Delayed Reconciliations

Late bank or customer reconciliations:

• Reduce visibility into transaction behavior

• Delay escalation of anomalies

• Allow suspicious patterns to blend into normal activity

From an AML perspective, timing matters as much as accuracy.

The Risk-Based Approach Starts Inside the Ledger

Under guidance from the Financial Action Task Force (FATF), businesses must apply a risk-based approach (RBA)—focusing controls where risk is highest.

In practice, this means:

• High-value or unusual ledger entries require enhanced review

• Complex real estate transactions need deeper scrutiny

• Repeated anomalies must trigger escalation

If all ledger entries are treated the same during monthly closing, the RBA exists only on paper—not in reality.

What Regulators Expect During AML Inspections

In 2025 inspections, regulators increasingly:

• Trace transactions from ledgers to bank statements

• Review journal approval workflows

• Ask finance teams to explain balances

• Test coordination between finance and AML teams

AML/CFT supervision in the UAE is overseen by the Anti-Money Laundering and Combating the Financing of Terrorism Supervision Department (AMLD) under the Central Bank of the UAE (CBUAE).

Recent supervisory actions show that weak ledger-level controls alone can justify penalties, even where no confirmed money laundering occurred.

Emerging and Weakly Regulated Markets Face Higher Scrutiny

Monthly closings are especially risky in:

• Fast-growing real estate markets

• Newly licensed companies

• Businesses scaling faster than systems

In such environments, ledger reviews often lag behind transaction complexity—creating blind spots regulators are keen to identify.

Practical Steps to Reduce AML Risk in Monthly Closings

To strengthen AML controls within finance processes, UAE businesses should:

• Integrate AML red-flag checks into closing checklists

• Require documented explanations for unusual balances

• Review manual journal entries with heightened scrutiny

• Align ledger reviews with client risk ratings

• Escalate recurring anomalies to compliance teams

• Train finance staff to recognize AML indicators

Many organizations also conduct independent reviews of closing procedures to ensure they support—not weaken—AML obligations.

Why Monthly Closings Are an AML Opportunity, Not a Burden

When done properly, monthly closings:

• Surface suspicious patterns early

• Improve audit and inspection outcomes

• Strengthen internal governance

• Reduce regulatory and penalty risk

In 2025, regulators increasingly view finance-led AML controls as a sign of maturity, not administrative overhead.

Monthly closings and ledger reviews are no longer just accounting checkpoints—they are critical AML control points. Hidden inside routine reconciliations and journal entries are signals that regulators expect businesses to identify, question, and escalate.

For real estate and other high-risk sectors, the message is clear: if AML risks are not being detected during monthly closings, they are being missed entirely. Businesses that embed AML awareness into finance processes will be far better positioned to meet regulatory expectations and operate confidently in the UAE.