“Dentons was one of several firms that has acted for Afterpay,” the firm said in a statement on Tuesday.

It is not known what other firms gave Afterpay relevant compliance advice between January 19, 2015 and the present, the period under scrutiny by independent auditor Neil Jeans of Initialism Pty Ltd.

“Dentons considers the advice given to Afterpay was in line with the firm’s understanding of Afterpay’s business model and the law and industry practice,” the firm said.

In his report, delivered to the company’s board of directors on Friday, Jeans said Afterpay’s anti-money laundering counter-terrorism financing compliance was based on “incorrect” advice received from top tier law firms. The report did not identify the firms.

“The initial legal advice concluded that Afterpay’s business model resulted in the provision of the AML/CTF designated service – factoring receivables from merchants. I am of the opinion this initial legal advice was incorrect. The initial legal advice provided to Afterpay did not reflect Afterpay’s business model,” Jeans said.

According to the auditor, the designated service Afterpay provides is not factoring receivables but providing loans to consumers to purchase goods.

“Based upon the initial legal advice received regarding the designated services being provided, with further support from additional legal advice, Afterpay developed its AML/CTF program.

Despite Afterpay having a compliance-focused culture, the consequence of being provided with incorrect legal advice has resulted in historic non-compliance with the AML/CTF Act and Rules,” Jeans said.

This bad advice led Afterpay to focus its AML/CTF compliance on merchants rather than consumers, which is where it should have been, the auditor found.

Afterpay said that it would take action on all the auditor’s recommendations and would continue to fully cooperate with AUSTRAC, which has yet to announce whether it will pursue legal action.

“The report refers to matters of historic non-compliance by Afterpay and makes recommendations in relation to Afterpay’s ongoing AML/CTF compliance. The report states that the majority of these matters have been addressed, with the remainder covered in the recommendations. Afterpay fully accepts and is actioning all recommendations from the independent auditor,” Afterpay said in an ASX statement.

“AUSTRAC will now consider the report and determine whether it will take further action. The Company will continue to fully cooperate with AUSTRAC both in relation to the Report and our AML/CTF compliance more generally,” the company said.

The auditor said Afterpay’s AML/CTF compliance is now up to par and that the company’s vulnerability to being used for money laundering or terrorism financing is low.

The independent auditor was appointed after what Afterpay called a period of “ongoing engagement” over concerns regarding its compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

In its statement, Dentons pledged its support to AUSTRAC’s compliance objectives.

“Dentons is supportive of AUSTRAC’s ongoing commitment to corporate compliance,” the firm said.