Free Access ACAMS.CAMS.v2024-12-05.q439 Practice Test (Page 8)

Question 31

According to the Financial Action Task Force 40 Recommendations, simplified customer due diligence or reduced measures could be acceptable for which of the following types of products or transactions?
1.Life insurance policies where the annual premium is no more than USD/EUR 1,000 or a single premium of no more than USD/EUR 2,500.
2.Insurance policies for pension schemes if there is no surrender clause and the policy cannot be used as collateral.
3.A ptfiisiui i Ll idL pr uviJcfb lelir emei it bei lefils Lu employees.
4.Trusts where the settlor, trustee and beneficiaries are identified and the shares are in bearer
form.

A.1, 2, and 3 only

B.1, 2, and 4 only

C.2, 3, and 4 only

D.1, 3, and 4 only

Question 32

A client is a wholesale auto business that operates as a used car lot. The client regularly ships vehicles internationally. In a four-month period, the client received wires totaling $1,250,000 from a dealer in Benin in West Africa. All wires originated from Benin and were in increments of $50,000.
Account debits made to the account were payable to various transport companies. All incoming checks reference various vehicles purchased. Dock shipping receipts produced by the client to support account activity identify the vehicles but cannot easily be tied to the wires received.
What is the suspicious behavior?

A.The dock shipping receipts match the vehicles

B.Vehicles are regularly shipped internationally

C.Wires received are in large, even dollar amounts

D.Account debits are payable to transport companies

Question 33

According to Basel Committee on Banking Supervision guidelines, which of the following statements best describes the relationship between the internal audit function and compliance?

A.The internal audit methodology should include an assessment of compliance risk.

B.An internal audit program of adequacy of the bank's compliance function should be es-tablished, but should not include review of transactions.

C.The compliance function and internal audit function should be combined.

D.The auditors should not discuss internal audit findings with compliance management to maintain independence.

Correct Answer: A

According to the Basel Committee on Banking Supervision guidelines, the internal audit function should evaluate the adequacy and effectiveness of the bank's compliance function and its compliance risk management framework1. This includes assessing the compliance risk inherent in the bank's activities, products, services, and systems, as well as the compliance policies, procedures, controls, and reporting mechanisms2. The internal audit function should also review the transactions and records of the bank to ensure compliance with applicable laws, regulations, and internal standards3.
The other statements are incorrect because:
* B. An internal audit program of adequacy of the bank's compliance function should be established, but should not include review of transactions. This statement is false because the internal audit function should review the transactions and records of the bank to ensure compliance, as mentioned above3.
* C. The compliance function and internal audit function should be combined. This statement is false because the compliance function and the internal audit function should be separate and independent from each other, to avoid conflicts of interest and ensure objectivity and credibility.
* D. The auditors should not discuss internal audit findings with compliance management to maintain independence. This statement is false because the internal audit function should communicate and coordinate with the compliance function on a regular basis, to share information, insights, and recommendations, and to avoid duplication of work. However, the internal audit function should maintain its independence and report directly to the board of directors or the audit committee.
References:
* 1: The internal audit function in banks, Principle 10, p. 9
* 2: The internal audit function in banks, Principle 10, p. 10
* 3: The internal audit function in banks, Principle 10, p. 11
* : The internal audit function in banks, Principle 2, p. 4
* : The internal audit function in banks, Principle 10, p. 11

Question 34

Which information must a United States financial institution retain for having foreign correspondent accounts as part of the USA PATRIOT Act record keeping requirements?

A.Section 314(b) information sharing results related to foreign correspondent accounts

B.Purchase of monetary instruments of $3,000 or more involving foreign correspondent accounts

C.Records identifying the owners of each foreign bank

D.A suspicious activity report filed and the supporting documentation involving foreign correspondent accounts

Question 35

When should new business products to evaluated for AML concerns?

A.After they have been implemented so there is empirical data to review

B.Before they are launched into the market

C.At the time of the next enterprise risk assessment

D.On an annual basis

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Question 31

Question 32

Question 33

Question 34

Question 35

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