Which are the most important documents for an auditor to verify that a financial institution has proper controls in place for mitigating its money laundering risk exposure? (Select Two.)

Money laundering risk assessment

Internal controls including policies and procedures

Money laundering risk assessment

Internal controls including policies and procedures

Management action plan for remediating audit findings

List of politically exposed persons

Log of law enforcement requests Importance of Risk

A financial institution is auditing its correspondent banking relationships and their respective sanctions compliance programs. Which condition will merit a higher sample size assuming the correspondent banks have a moderate level of risk mitigation?

A fluctuating customer base in an international environment

A well-known customer base m a localized environment

A customer base changing due to a merger in the domestic market

A stable customer base in an international environment

When reviewing changes to the organizational structure of an AML department, which factor should an auditor assess?

Staffing levels on the AML team

Interaction with internal audit

Staffing levels on the AML team

Which is a true statement about the computer-assisted audit tool (CAAT)?

Auditors using CAAT could have all customer addresses from the past 10 years while auditors using traditional methods of auditing could only have a sample of these customer addresses.

Both CAAT and traditional methods of auditing allow auditors to build conclusions based upon a limited sample of a population.

KYC data that have been incorporated into the warehouse could still be changed if need be from using CAAT.

Auditors using CAAT could have all customer addresses from the past 10 years while auditors using traditional methods of auditing could only have a sample of these customer addresses.

CAAT cannot be customized to scrutinize huge volumes of data and produce specific procedures that could replace the requirement for the auditor's own procedures.

During a sample review, the auditor notices that an alert was generated for a large deposit that was inconsistent with the customer profile. The customer has had no other incidents in the past 10 years and has provided documents to confirm the deposit as a property sale. What should the auditor do?

Document the conclusion within the audit work papers.

Carry out further investigation of this alert.

Consult with the compliance officer.

During a sanction review, an auditor notes that several of the bank's large corporate clients continue to route transactions through the bank to certain Office of Foreign Assets Control (OFAC)-sanctioned countries. The head of corporate clients stated that these transactions were executed under the OFAC license. What should an auditor know to distinguish between an OFAC general license and a specific license?

A general license authorizes a type of transaction and a specific license authorizes a transaction in response to a written license application.

A specific license authorizes a transaction for an entity and a general license authorizes a transaction for an individual.

A general license authorizes a transaction for an entity and a specific license authorizes a transaction for an individual.

A specific license authorizes a type of transaction and a general license authorizes a transaction in response to a written license application.

An auditor should verify that an institution has ensured its AML systems and controls include:

supporting documents of its risk management policies and risk profile in relation to money laundering.

measures to ensure that money laundering risk is taken into account in its monthly operations.

daily reports by the institution's money laundering reporting officer on the operation and effectiveness of those systems and controls.

training for senior management and the governing body only.

Which set of activities describes the planning phase of an audit?

Request the scheduling of preliminary discussions with management and request a walk-through of key processes

Request data regarding financials, schedule planning meeting and perform sample testing

Request the scheduling of preliminary discussions with management and request a walk-through of key processes

Request organizational charts, assess data for sample testing and provide an initial report

Request management overview of the organization conduct analytical review of processes and issue findings Comprehensive Detailed Step-by-Step

Which task should an auditor complete first when preparing to audit the client risk scoring methodology?

Review the financial institution's AML risk assessment to understand the institution's client base.

Query the completeness of the customer data to be provided.

Discuss the client risk scoring process with the head of AML.

Review the financial institution's AML risk assessment to understand the institution's client base.

Review a list of high-risk customers provided by compliance.

Which circumstance would impair an auditor's independence and objectivity?

Working with staff to design and implement key controls

Attending internal meetings where key risk indicators are discussed

Donating funds to a local chanty which relates to the organization being audited

Working with staff to design and implement key controls

Presenting at a local audit industry event where best practices are discussed

An audit manager identifies that a financial institution (Fl) has not produced a business-level risk assessment in accordance with policy. The senior manager of the Fl assures that assessing risk at the individual client level and aggregating the data is an acceptable approach. How should the audit manager proceed?

Issue a finding that requires the completion of a business-level risk assessment.

Accept the risk conclusions provided by the senior manager.

Test the accuracy of the mathematical aggregation of the risk assessments.

Discuss with the senior manager to establish the risk appetite.

What factors are considered tor conducting an external audit and assurance review? (Select Three.)

Budget available for the review

Information that will be required

The scoping and planning process of an AML audit of a bank is best guided by review of which document?

A document prepared to identify the inherent risk associated with a bank's products and services

Independent model validation and testing report of the bank's transaction surveillance systems

Information technology security risk assessment of the bank's COD risk rating solution

Report of independent audit conducted the previous year

A document prepared to identify the inherent risk associated with a bank's products and services

Which can be excluded from an audit report?

Overall opinions, judgments or conclusions reached in prior audit reports

The risk or control framework or other criteria used as a basis for the overall opinion

The scope, including the time period to which the opinion pertains

Overall opinions, judgments or conclusions reached in prior audit reports

The overall opinion judgment, or conclusion reached

Which are methods to test internal controls related to the CDD and KYC process? (Select Two.)

Review the accuracy of the gap analysis of the CDD and KYC policies and procedures against local regulations.

Evaluate the results of the sample testing of new and existing customer relationships for adherence to the CDD and KYC process.

Ask the account officers whether the CDD and KYC information provided is correct.

Confirm with client onboarding teams whether or not high-risk customers exist.

Review the accuracy of the gap analysis of the CDD and KYC policies and procedures against local regulations.

Evaluate the results of the sample testing of new and existing customer relationships for adherence to the CDD and KYC process.

Confirm if suspicious activity reports were filed following escalation for non-compliance with the CDD and KYC process.

Which should be incorporated into an AML compliance policy? (Select Three.)

Mandatory training requirements

Cryptocurrency threat assessment

Mandatory training requirements

Which is considered a minimum requirement in a customer identification program?

Account opening procedures that specify the information that will be obtained from each customer

Transaction reporting procedures used to report suspicious transactions to the regulator

Transaction monitoring procedures that specify the information that will be retained in each transaction

Account opening procedures that specify the information that will be obtained from each customer

Customer enhanced due diligence procedures used to identify unusual transactions

Which is considered a minimum requirement in a customer identification program?

Account opening procedures that specify the information that will be obtained from each customer

Transaction reporting procedures used to report suspicious transactions to the regulator

Transaction monitoring procedures that specify the information that will be retained in each transaction

Account opening procedures that specify the information that will be obtained from each customer

Customer enhanced due diligence procedures used to identify unusual transactions

While reviewing a sample of trade financing documents in a financial institution, an auditor notes that there were instances of potential overvaluation and undervaluation of goods. The auditor intends to check if these were detected and escalated. Which is a reason for such overvaluation and undervaluation?

To move funds or value across national borders

A financial institution's (FI) risk assessment identified a lack of specific policies and procedures for existing privately-owned automated teller machine (ATM) customers. What would an auditor review to assess whether this risk has been addressed?

Review the current risk assessment to determine the existence of privately-owned ATM customers.

Prepare to audit a sample of the FI's privately-owned ATM customers.

Draft policies and procedures for the FI's privately-owned ATM customers.

Request data on the volume and value of transactions through the privately-owned ATM customers.

Review the current risk assessment to determine the existence of privately-owned ATM customers.

Which does a financial institution (FI) need to do when outsourcing an independent audit?

Ensure that the scope of the audit and the experience of the auditors match the needs of the Fl.

Select an audit firm based on recommendations from the AMI compliance officer.

Investigate whether the audit firm has conducted prior audits with the Fl.

Ensure that the scope of the audit and the experience of the auditors match the needs of the Fl.

Choose an audit firm based on price consideration and geographic location.

Why is it crucial for the audit plan to consider the effectiveness of the AML risk assessment controls and risk mitigants?

Improper identification and assessment of risk creates deficiencies resulting in an overall weakened AML compliance program.

Audits need to approve the implementation of the controls and review testing outcomes.

Improper identification and assessment of risk creates deficiencies resulting in an overall weakened AML compliance program.

There is a regulatory requirement for the audit to update the AML risk assessments on a continuous or specified periodic basis.

Strict CDD rules promote high ethical and professional standards in the financial industry.

What should an auditor verify when auditing areas with previously identified AMI deficiencies?

Management took appropriate and timely action to address any violations and other deficiencies.

Senior management agreed that the findings were legitimate.

Management discussed an action plan to address any violations and other deficiencies.

The business attested to remediating the control gaps.

When testing the operational effectiveness of an institution's customer risk rating model an auditor finds that the risk rating is not in accordance with the model specification in some cases. After interviewing developers and officers, the auditor learns the specification document is inaccurate and has not been updated in a timely manner. Which are appropriate corrective action plans'? (Select Two.)

Check periodically if released rules are operating as per the specifications.

Set up a checkpoint before release to make sure that the release is in accordance with the specifications.

Alert the person in charge of releasing the model that me release must comply with the specifications.

Check periodically if released rules are operating as per the specifications.

Set up a checkpoint before release to make sure that the release is in accordance with the specifications.

Tram KYC personnel to recognize errors in the customer risk rating model.

Report this matter to the board of directors.

Which statements demonstrate an effective use of risk appetite in an organization? (Select Two.)

Determining risk appetite should include a discussion about an organization becoming overly risk-averse.

Analyzing risk appetite statements is important to reaching a meaningful articulation of risk appetite.

Risk appetite statements should remain stable and consistent, even in changing business conditions.

Determining risk appetite should include a discussion about an organization becoming overly risk-averse.

Risk appetite statements do not need specific indicators to alert management when the level of acceptable risk is exceeded.

When discussing and managing risk, 'risk appetite' and 'risk tolerance' can be used interchangeably.

Analyzing risk appetite statements is important to reaching a meaningful articulation of risk appetite.

When evaluating an AML training program tor CFT functions the auditor should verify that:

tailored training has been provided to AML and CFT staff.

interns and third parties are not included.

attendees have completed post-course surveys.

ethics training has been delivered to senior management.

tailored training has been provided to AML and CFT staff.

Which action would an auditor take to evaluate design effectiveness?

Check whether the policies and procedures are consistent with the authorities' regulations.

Carry out a sample check of suspicious activity reports and make sure they are in line with policies and procedures.

Confirm that alerts in transaction monitoring have been properly escalated or waived.

Confirm that customer records are being kept in accordance with policies and procedures.

Which are objectives of the issue confirmation step in the audit issue management process? (Select Two.)

Findings ate explained and assigned to the accountable owners.

Findings ate clearly written and facts are accurate

Findings ate explained and assigned to the accountable owners.

Additional remediation is identified and planned.

Findings ate clearly written and facts are accurate

Communication, follow-up. and documentation are tracked on scheduled sustainability validations.

Compliance Identifies and schedules pre-exam validation as appropriate.

Which key risk indicator should the internal auditor consider when reviewing correspondent banking activities?

Number of respondent banks located in higher risk jurisdictions.

Volume of transaction activity referred by the respondent bank.

Size and stature of a respondent bank's operations in its home country.

Number of respondent banks located in higher risk jurisdictions.

Number of correspondent banking relations terminated.

Which recommendation should the audit team provide to address transaction monitoring (TM) issues?

Perform a coverage assessment of the current suite of TM detection scenarios against the bank's money laundering and terrorist financing risks

Switch off those detection scenarios that are producing too many false positives.

Apply the same thresholds across all client types to ensure alignment of risk coverage.

Perform a coverage assessment of the current suite of TM detection scenarios against the bank's money laundering and terrorist financing risks

Provide training for first-line staff on how to review and disposition TM alerts.

Considering recent changes in the bank's correspondent banking business. Which is the most important risk indicator for the internal auditor to review?

The jurisdiction in which the respondent bank is located.

The management and ownership of the respondent bank.

The purpose of the services provided to the respondent bank.

The jurisdiction in which the respondent bank is located.

The major business activities of the respondent bank.

ACAMS Advanced-CAMS-Audit Practice Test 2 - Free Online Exam Questions 41-80

Audits are designed to provide assurance that what key aspect of risk management framework is adequately designed and functioning effectively?

Become a Premium Member for full access

Unlock Premium Member

ACAMS Advanced-CAMS-Audit Practice Test 2

Question

Drag and Drop

Hot Area

ACAMS Advanced-CAMS-Audit Practice Tests

Practice Tests