Advanced CAMS - Audit

Advanced CAMS - Audit practice questions, page 2 of 4, with answer review and explanations.

Question 6

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? (Choose two.)

  1. AML corporate governance
  2. Clients of the institution for more than 10 years
  3. Client base stability
  4. Recent audit findings
  5. Previous correspondent banking relationships

Question 7

How should an auditor ensure that a financial institution (FI) has appropriate controls in place for AML risk mitigation?

  1. Determine if the FI’s AML risk assessment properly identifies risks related to the Office of Foreign Assets Control.
  2. Assess whether the AML risk assessment was discussed and adopted by the FI’s board of directors.
  3. Confirm that the FI is using a standard industry template for its AML risk assessment.
  4. Verify that the AML risk assessment provides a comprehensive analysis of the FI’s inherent and residual financial crime risks.

Question 8

During an audit review, the auditor notices that an alert was generated for a large deposit inconsistent with the customer’s usual profile. The customer has provided documentation confirming the deposit as a property sale, and there have been no other suspicious activities in the past 10 years.What is the most appropriate action for the auditor?

  1. Increase the sample size.
  2. Consult with the compliance officer.
  3. Carry out further investigation of this alert.
  4. Document the conclusion within the audit work papers.

Question 9

Which factors should be taken into consideration in designing a follow-up strategy when remedial action needs to be taken due to deficiencies identified in an AML audit?

  1. Reporting the breach and the regulatory response
  2. Target completion date and status update on remedial action
  3. Responsible action owner and internal audit commitment to follow up
  4. Available resources and board of directors’ commitment

Question 10

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?

  1. A fluctuating customer base in an international environment
  2. A well-known customer base in a localized environment
  3. A customer base changing due to a merger in the domestic market
  4. A stable customer base in an international environment