Acams Advanced-CAMS-Audit Exam Practice Test Instant Access

Question 1

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

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

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

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

Dtraining for senior management and the governing body only.
Core Components of AML Systems and Controls:
Supporting documentation ensures alignment with regulatory expectations and helps auditors verify that the institution's policies and controls reflect its assessed risks.
Other Options:
B: Monthly operations are operational concerns, not control documentation.
C: Daily reports are excessive for governance purposes.
D: Training must include all staff, not only senior management.

Answer : A

Question 2

Which should the auditor recommend to management in terms of the client's risk rating procedures?

ARemove enhanced due diligence requirements for long-standing clients that are art collectors and do not transact with precious metals.

BInclude an assessment of risk factors of channel, credit, and transaction risk to determine the client's composite AML and sanctions risk score.

CProvide staff with training on new record retention requirements for occasional transactions.

DRemediate client files to verify their AML and sanctions risk rating and document enhanced due diligence measures, where applicable.
Incorporating Comprehensive Risk Factors
By including an assessment of channel, credit, and transaction risks, the client's overall risk profile is accurately determined. This aligns with risk-based approaches emphasized by FATF and CAMS-Audit standards.
These risk factors provide a granular view of the client's risk level, ensuring proper classification into Standard or Enhanced Due Diligence categories.
Regulatory Alignment
FATF Recommendations mandate that client risk assessments consider the products, services, and delivery channels used, as well as geographic and transactional risks.
Conclusion
Implementing composite AML and sanctions risk scores ensures the institution is compliant with regulatory standards and adequately mitigates risks associated with different client profiles.

Answer : B

Question 3

Which requirement of a financial institution's compliance program should an auditor review first to understand key roles and responsibilities?

ADesignation of an individual or individuals responsible for coordinating and monitoring day-to-day compliance

BList of high-risk customers subject to enhanced due diligence and the measures taken to mitigate the risks

CNames of politically exposed persons that are subject to ongoing monitoring

DList of suspicious transactions reported to the regulator
Key Roles and Responsibilities:
Identifying compliance coordinators helps auditors understand the operational framework and ensure clear accountability in managing day-to-day AML compliance activities.
Initial Review Focus:
This step provides a foundational understanding of the institution's compliance structure, enabling targeted assessments of other program components.
Advanced CAMS-Audit Reference:
CAMS-Audit emphasizes that the effectiveness of an AML program hinges on having designated individuals who oversee compliance processes.

Answer : A

Question 4

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

AQuery the completeness of the customer data to be provided.

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

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

DReview a list of high-risk customers provided by compliance.
Understanding Client Risk Scoring Methodology:
Reviewing the AML risk assessment offers a comprehensive view of the institution's client base, risk appetite, and segmentation strategies.
Preparation Steps:
Assessing the AML risk assessment ensures that auditors understand the institution's framework for categorizing and managing client risks.
Importance in CAMS-Audit Framework:
CAMS-Audit highlights the necessity of linking client risk scoring to the broader institutional AML risk assessment.

Answer : C

Question 5

The auditor finds that the customer risk assessment (CRA) is completed at initial onboarding and is repealed for each customer every other year. The auditor's observations should Include that the CRA should:

Abe updated more often given the risk of the entity.

Binclude an assessment of jurisdiction where the customer currently resides as this may have changed.

Callow for sales oy third patties other than advisors since most of the customers are local residents.

Dinclude a qualitative overlay that 95% of the products offered are subject to regulatory exemptions.
Dynamic Nature of Customer Risk Assessment (CRA):
A comprehensive CRA should incorporate jurisdictional risks, as customer location changes could introduce new risks, such as exposure to high-risk or non-compliant jurisdictions.
FATF Recommendations on Risk-Based Approach:
Periodic updates to the CRA, including changes in customer location, align with FATF's risk-based approach and Recommendation 10.
Audit Observation Implications:
Omission of jurisdictional assessments could result in undetected risks, undermining the integrity of the AML program.

Answer : B

Question 6

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

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

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

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

DChoose an audit firm based on price consideration and geographic location.
Selecting an Audit Firm:
The scope and expertise of the audit firm must align with the institution's risk profile and regulatory requirements to ensure the audit's effectiveness.
Best Practices in Outsourced Audits:
Properly scoping and selecting auditors with relevant AML/CFT experience ensures compliance and minimizes operational risks.
CAMS-Audit Guidance:
Advanced CAMS-Audit emphasizes the importance of tailoring audit scopes and selecting experienced auditors for outsourced engagements.

Answer : C

Question 7

Suspicious activity report testing in the last three audits did not identify any metrics to indicate that volume vanes dramatically each month. Which step should the auditor take next?

AAssign to continuous monitoring.

BInclude the lack of metrics as a deficiency in the reporting.

CEscalate the finding regarding the lack of metrics to the board of directors.

DReview within the IT audit.
Deficiency in Reporting Metrics:
AML compliance frameworks require metrics to track trends and unusual patterns in suspicious activity reports (SARs). A lack of such metrics is a deficiency that undermines monitoring and oversight.
Why This is the Appropriate Step:
Identifying and documenting deficiencies ensures accountability and facilitates corrective action, aligning with AML audit standards.

Answer : B

Acams Advanced CAMS-Audit Certification Advanced-CAMS-Audit Exam Practice Test