Acams Advanced-CAMS-Audit Exam Practice Test Instant Access

Question 1

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 2

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?

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

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

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

DReview the current risk assessment to determine the existence of privately-owned ATM customers.
Reviewing the Risk Assessment:
A risk assessment reveals whether privately-owned ATMs are identified and properly evaluated in terms of potential AML risks.
Auditor's Task:
Confirm that specific policies and procedures are now in place to address identified risks from the previous assessment.
Relevance to CAMS-Audit Standards:
Risk assessments are fundamental in identifying gaps in policies and procedures for high-risk areas like privately-owned ATMs.

Answer : D

Question 3

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?

ATo disguise dual-use goods

BTo trade prohibited goods

CTo move funds or value across national borders

DTo defraud shipping companies
Reason for Overvaluation/Undervaluation:
This technique is often used in trade-based money laundering to transfer funds or value disguised as legitimate trade transactions.
Auditor's Responsibility:
Auditors must ensure such discrepancies are detected, escalated, and adequately addressed to prevent money laundering.
CAMS-Audit Insight:
Advanced CAMS-Audit emphasizes vigilance in trade finance as a high-risk area for money laundering activities.

Answer : C

Question 4

An organization creates a document for its audit committee listing the outstanding audit findings. The list has an executive management owner assigned to each finding, due dates for reporting management's responses and space for management to identity the actions to be taken. Which is a primary purpose of this document?

AProviding audit documentation of management responses

BTracking completion of proposed recommendations

CDocumenting audit team validation testing

DTesting resiliency of proposed recommendations
Purpose of the Document:
This document is a management tool to ensure accountability and monitor the progress of resolving outstanding audit findings.
Audit Committee's Role:
The document facilitates oversight by the audit committee, ensuring timely and effective resolution of recommendations.
CAMS-Audit Recommendations:
Proper tracking mechanisms are emphasized to align audit processes with institutional and regulatory expectations.

Answer : B

Question 5

An auditor is writing the scope for an AML review of a financial institution. The objective is to evaluate how effectively existing controls are designed and operating. Which areas should be assessed? (Select Two.)

AClients of the institution for more than 10 years

BPrevious correspondent banking relationships

CClient base stability

DRecent audit findings

EAML corporate governance
Recent Audit Findings:
Reviewing past findings ensures the institution has addressed previous deficiencies and allows the auditor to assess the effectiveness of implemented corrective actions.
AML Corporate Governance:
Corporate governance is a critical component of AML compliance, involving oversight structures, policies, and accountability mechanisms to prevent money laundering risks.
Alignment with CAMS-Audit Principles:
Advanced CAMS-Audit emphasizes evaluating governance structures and learning from recent audits to maintain robust AML controls.

Answer : D, E

Question 6

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?

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

BAccept the risk conclusions provided by the senior manager.

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

DDiscuss with the senior manager to establish the risk appetite.
Importance of Business-Level Risk Assessments:
Aggregating client-level risk assessments does not replace a comprehensive business-level risk assessment, which is required for holistic risk management.
Audit Manager's Responsibility:
The absence of a business-level risk assessment constitutes a policy violation and must be formally addressed through a finding.
CAMS-Audit Guidelines:
CAMS-Audit emphasizes the need for layered risk assessments, including enterprise-wide evaluations, to comply with regulatory standards.

Answer : A

Question 7

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

AAttending internal meetings where key risk indicators are discussed

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

CWorking with staff to design and implement key controls

DPresenting at a local audit industry event where best practices are discussed
Impairment of Independence and Objectivity:
Auditors must remain independent and objective. Direct involvement in designing and implementing controls creates a conflict of interest.
Guidelines from CAMS-Audit:
CAMS-Audit emphasizes that auditors should limit their role to evaluating controls and avoid involvement in operational tasks.
Standards of Professional Conduct:
Independence is a cornerstone of effective auditing, ensuring unbiased findings and recommendations.

Answer : C

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