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QUESTION: 9

Which should the external auditor recommend to ensure that the institution did not facilitate transactions involving a sanctioned person?

Re-screen all transactions over the period of time when the updated sanction lists were not uploaded against the current sanctions lists.
Perform a security risk and access assessment on the sanction screening tool to ensure more timely sanctions lists are uploaded.
Re-screen all transactions based on the sanctions lists that were active at that time but not uploaded.
Periodically monitor the sanctions lists uploaded by the screening tool to ensure the most up-to- date lists are in the system.

Answer(s): A

Explanation:

Recommended Action:
Re-screening ensures compliance with sanctions and identifies potential violations retrospectively. This is a critical regulatory requirement for addressing gaps in screening coverage.
FATF and Basel Guidelines:
Emphasize retrospective reviews in cases of system lapses to maintain the integrity of the sanctions compliance program.

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QUESTION: 10

Which conclusion should the auditor make regarding the staff attendance of the periodic AML training program organized by the bank?

Staff attendance is complete because the training is mandatory for staff in the business, operations compliance and senior management whose duties involve knowledge of AML controls and processes.
Staff attendance is complete because all staff in the institution are required to attend the AML training as part of the staff onboarding process.
Staff attendance is incomplete because the board of directors is not part of the staff required to attend the periodic trainings, and there is no other specially designed AML training for the board.
Staff attendance is incomplete because the compliance officer or the delegates are not part of the staff facilitating the 3-hour periodic AML training.

Answer(s): C

Explanation:

Importance of AML Training for All Levels of an Institution:
Advanced CAMS-Audit and FATF emphasize that AML training programs should be inclusive of all stakeholders, including senior management and board members, as they are integral to establishing an effective AML/CFT compliance culture.
Board-Level Training Specifics:
Directors require tailored AML training to address strategic oversight responsibilities rather than operational controls. Periodic training is mandatory to keep the board updated on regulatory changes and institutional risk profile adjustments.
Audit Observation:
Exclusion of the board from AML training reflects a gap in the institution's AML framework, potentially exposing it to regulatory scrutiny.
Reference to AML/CFT Standards:
FATF Recommendations mandate training for all levels of an institution, explicitly highlighting senior management and governance roles in compliance efforts.

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QUESTION: 11

What conclusion should the auditor make regarding AML training for outsourced AML providers?

The approach outlined by the Dank is deficient, as the service providers are not pan of the Dank s AML training during its staff onboarding.
The approach outlined by the Dank is appropriate as the Dank can rely on a professional service provider to deliver the AML training program for the Dank s staff.
The approach outlined by the Dank is deficient, as it does not provide controls for the Dank to verify training delivered by outsourced providers to the bank's staff is appropriate.
The approach outlined by the bank Is appropriate as it considers practical issues such as time zone differences and availability of both classroom and online sessions.

Answer(s): C

Explanation:

Outsourced Training Oversight Requirements:
CAMS-Audit emphasizes that institutions must ensure outsourced providers deliver training aligned with internal policies and regulatory standards.
Control Mechanisms for Outsourced AML Providers:
The bank must have controls in place to:
Review the content of training sessions.
Validate trainer qualifications.
Assess the effectiveness of training through feedback or testing.
Deficiencies in the Current Approach:
Failure to implement verification mechanisms for outsourced training compromises the consistency and quality of the AML education program.
Regulatory Requirements:
FATF and Basel guidelines mandate oversight of third-party service providers, especially for critical functions like AML compliance training.

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QUESTION: 12

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:

be updated more often given the risk of the entity.
include an assessment of jurisdiction where the customer currently resides as this may have changed.
allow for sales oy third patties other than advisors since most of the customers are local residents.
include a qualitative overlay that 95% of the products offered are subject to regulatory exemptions.

Answer(s): B

Explanation:

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.

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QUESTION: 13

The company has automated the completion of the customer risk assessment (CRA) into its main customer relationship management (CRM) system The CRM has needs recording the overall risk level assessed (Standard. Enhanced), the ID number of the staff member who completed the assessment, and me date of the last assessment Which additional fields should the auditor recommend to document the CRA process? (Select Three.)

Age (Years)
Risk factors (Y/N. if Y please specify)
Type of customer (Trust. Company Individual)
Annual premium (S)
Residence (Country)
Photo ID taken (Passport Driver's License. Other)

Answer(s): B,C,E

Explanation:

Enhancements to the CRA Process:
Risk Factors: Identify and document specific risk indicators for transparency and consistent assessment. This ensures alignment with the risk-based approach advocated by FATF. Type of Customer: Differentiating customer types (trust, company, individual) is critical for tailoring due diligence measures to the unique risks associated with each type. Residence (Country): Tracking customer jurisdiction ensures risk assessments reflect geopolitical and regulatory changes, fulfilling FATF compliance expectations.
Role of Additional Fields in Compliance:
These fields enhance traceability, accountability, and risk profiling, ensuring the CRA process is comprehensive and meets regulatory standards.
Advanced CAMS-Audit Guidance:
Documentation must be detailed and periodically reviewed to address evolving AML risks effectively, as recommended by CAMS-Audit guidelines.

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QUESTION: 14

Which findings indicate issues that would cause a lack of understanding of the risks associated with the business the financial institution conducts? (Select Three.)

Finding 1
Finding 3
Finding 4
Finding 5
Finding 6
Finding 8

Answer(s): A,C,F

Explanation:

Finding 1
This highlights fundamental gaps in the risk assessment process. A lack of clarity in identifying and analyzing risks associated with certain products, services, or client categories reflects an incomplete understanding of the business's risk landscape.
CAMS-Audit emphasizes the importance of comprehensive risk assessments to identify inherent and residual risks and align them with the institution's overall AML/CFT framework.

Finding 4
This pertains to inadequate integration of risk mitigation controls into operational processes, leading to blind spots in identifying emerging threats. Institutions that do not properly embed risk controls often fail to adapt to changing business or regulatory requirements. Reference to FATF recommendations underlines the necessity of embedding controls that reflect ongoing and emerging risks.

Finding 8
Failure to implement effective monitoring mechanisms or maintain updated customer or transaction profiles suggests a superficial approach to understanding risk exposure. Without robust data tracking, financial institutions may overlook key risk indicators. CAMS-Audit documents stress the need for effective transaction and customer profile monitoring systems as part of a sound risk-based approach.

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QUESTION: 15

Which finding indicates issues that could result in clients being subject to incorrect scenarios and thresholds?

Firming 2
Finding 4
Finding 5
Finding 7

Answer(s): D

Explanation:

Significance of Finding 4 in Scenario and Threshold Calibration:
Finding 4 typically points to issues with the alignment of customer segmentation or risk profiling. Incorrect segmentation or categorization directly impacts the assignment of scenarios and thresholds, leading to clients being subjected to inappropriate monitoring settings. For example, placing a low-risk client in a high-risk threshold group can cause unnecessary alerts, while the opposite scenario might miss genuine suspicious activities.
Other Options Evaluated:
Finding 2: May relate to broader systemic issues but does not specifically highlight misalignment with thresholds or scenarios.
Finding 5: Typically involves data accuracy concerns but does not directly result in the application of incorrect scenarios or thresholds.
Finding 7: Often pertains to gaps in coverage or monitoring rather than specific issues in the calibration of scenarios and thresholds.
Advanced CAMS-Audit Context:
Advanced CAMS-Audit emphasizes the importance of precise customer segmentation and scenario calibration to ensure transaction monitoring systems operate efficiently and effectively. Findings pointing to misalignments in these areas are critical indicators of potential weaknesses.
Regulatory Relevance:
FATF and Basel Committee standards require risk-based monitoring tailored to the risk profile of each customer. Misaligned thresholds violate this principle, potentially leading to regulatory scrutiny.
Conclusion:
The correct answer is B. Finding 4, as it identifies the misalignment of scenarios and thresholds with customer risk profiles, which is a critical issue in ensuring effective AML monitoring systems.

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QUESTION: 16

Which finding must be first remediated in order to understand is risks the organization is exposed to?

Finding 1
Finding 3
Finding 5
Finding 8

Answer(s): A

Explanation:

Finding 1
This finding likely pertains to foundational gaps in the organization's risk assessment framework or the absence of a comprehensive understanding of inherent risks. Without addressing this, the organization cannot adequately identify, assess, or mitigate risks effectively.

According to CAMS-Audit standards, a thorough risk assessment is the cornerstone of an effective AML/CFT program. It helps to prioritize resources and design appropriate controls based on the identified risk levels.
Critical Role in Understanding Risks
Remediating foundational issues ensures that the organization has a clear understanding of its risk exposure across all products, services, and jurisdictions. This step is essential before addressing downstream issues such as customer due diligence (CDD) gaps or monitoring inefficiencies.
Alignment with Regulatory Requirements
FATF guidelines and CAMS-Audit practices emphasize that risk assessment should precede other remediation efforts. Without this, the organization may address symptoms rather than root causes of compliance and operational risks.

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ACAMS Advanced CAMS-Audit Certification Advanced-CAMS-Audit Dumps in PDF

Free ACAMS Advanced-CAMS-Audit Real Questions (page: 9)

QUESTION: 9

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QUESTION: 10

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QUESTION: 11

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QUESTION: 12

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QUESTION: 13

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QUESTION: 15

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QUESTION: 16

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