[May-2025] 100% Actual Advanced-CAMS-Audit dumps Q&As with Explanations Verified & Correct Answers
Advanced-CAMS-Audit Dumps with Free 365 Days Update Fast Exam Updates
ACAMS Advanced-CAMS-Audit Exam Syllabus Topics:
| Topic | Details |
|---|---|
| Topic 1 |
|
| Topic 2 |
|
| Topic 3 |
|
| Topic 4 |
|
NEW QUESTION # 28
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.)
- A. Annual premium (S)
- B. Photo ID taken (Passport Driver's License. Other)
- C. Type of customer (Trust. Company Individual)
- D. Risk factors (Y/N. if Y please specify)
- E. Residence (Country)
- F. Age (Years)
Answer: C,D,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.
NEW QUESTION # 29
Which products/services increase the risk level for money laundering for XYZ Bank?
- A. Foreign exchange services
- B. Payable through accounts
- C. Letters of credit
- D. International fund transfers
Answer: B,D
Explanation:
Payable through accounts allow foreign banks' customers direct access to the correspondent account, which can increase the risk of money laundering due to less direct oversight.
NEW QUESTION # 30
Which key risk indicator should the internal auditor consider when reviewing correspondent banking activities?
- A. Number of respondent banks located in higher risk jurisdictions.
- B. Volume of transaction activity referred by the respondent bank.
- C. Number of correspondent banking relations terminated.
- D. Size and stature of a respondent bank's operations in its home country.
Answer: A
Explanation:
Correspondent banking relationships with banks in high-risk jurisdictions are a key risk indicator, as these relationships often pose greater AML/CFT risks due to regulatory or operational deficiencies in those jurisdictions.
NEW QUESTION # 31
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?
- A. Assign to continuous monitoring.
- B. Escalate the finding regarding the lack of metrics to the board of directors.
- C. Include the lack of metrics as a deficiency in the reporting.
- D. Review within the IT audit.
Answer: C
Explanation:
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.
NEW QUESTION # 32
Which finding indicates issues that could result in clients being subject to incorrect scenarios and thresholds?
- A. Firming 2
- B. Finding 4
- C. Finding 5
- D. Finding 7
Answer: D
Explanation:
* Significance of Finding 4 in Scenario and Threshold Calibration:
* Finding 4typically 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 isB. 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.
NEW QUESTION # 33
When conducting an audit of a money services business (MSB), the frequency of the review depends on the country's regulatory practices and the MSB's.
- A. scope.
- B. policy.
- C. internal controls.
- D. regulatory requirements.
Answer: D
Explanation:
Review Frequency:
* The frequency of MSB reviews depends on regulatory requirements, which vary by jurisdiction but are guided by FATF Recommendations that mandate risk-based supervision for money services businesses.
Risk-Based Approach:
* Regulators often require more frequent reviews for high-risk MSBs to ensure compliance with AML
/CFT standards.
NEW QUESTION # 34
Which is a true statement about the computer-assisted audit tool (CAAT)?
- A. KYC data that have been incorporated into the warehouse could still be changed if need be from using CAAT.
- B. Auditors using CAAT could have all customer addresses from the past 10 years while auditors using traditional methods of auditing could only have a sample of these customer addresses.
- C. CAAT cannot be customized to scrutinize huge volumes of data and produce specific procedures thatcould replace the requirement for the auditor's own procedures.
- D. Both CAAT and traditional methods of auditing allow auditors to build conclusions based upon a limited sample of a population.
Answer: B
Explanation:
Capabilities of CAAT:
* CAAT provides comprehensive data access, allowing auditors to review all customer data over extended periods, unlike traditional methods that rely on sampling.
Irrelevant Options:
* A:Limited samples are more typical of traditional methods.
* B:Data incorporated in the warehouse should not be changeable as it would undermine audit integrity.
* D:CAAT can be customized for specific audit needs.
NEW QUESTION # 35
What should the auditor look for to assess the adequacy of controls for non-profit organizations that are vulnerable to terrorist financing (TF) abuse? (Select Two.)
- A. Ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship
- B. The overall volume of cash deposit reporting for the quarter
- C. Exploitation of legitimate entities as conduits for TF for the purpose of escaping asset-freezing measures
- D. Testing of the customer's identifying information using reliable and independent source documents
- E. Concealing of the secretive diversion of funds intended for legitimate purposes to terrorist organizations
Answer: A,E
Explanation:
A: Ongoing Due Diligence: FATF Recommendations emphasize the need for ongoing monitoring and due diligence of NPOs to detect and prevent misuse for terrorist financing.
C: Diversion of Funds: Identifying and mitigating risks of fund diversion to terrorist organizations is a critical component in evaluating NPO vulnerabilities.
NEW QUESTION # 36
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?
- A. Available resources and board of directors' commitment
- B. Reporting the breach and the regulatory response
- C. Responsible action owner and internal audit commitment to follow up
- D. Target completion date and status update on remedial action
Answer: D
Explanation:
In follow-up strategies, the focus should be on ensuring accountability and tracking progress. Establishing a target completion date and regularly updating the status of remedial actions ensures timely and effective resolution of deficiencies.
CAMS-Audit emphasizes tracking timelines and milestones for corrective actions to align with regulatory expectations and internal compliance frameworks.
NEW QUESTION # 37
The standard audit report format requires that an executive summary of the findings is included. Which statement is most appropriate for summarizing detailed findings'?
- A. Evidence indicated inconsistent application of the client risk rating procedures and lack of evidence of enhanced due diligence measures for higher risk clients.
- B. Deletion of transaction records for completed occasional transactions is operationally an efficient practice.
- C. Although the evidence of enhanced due diligence performed was not available audit was satisfied that the risk of higher risk clients has been appropriately mitigated.
- D. The dealers have assured they are able to identify long-standing regular clients that are typically collectors and customers for occasional transactions.
Answer: A
Explanation:
Executive Summary Requirements:
* The statement focuses on clear, evidence-based findings, critical for reflecting material deficiencies in enhanced due diligence (EDD) for high-risk clients.
Guidelines for Reporting:
* FATF emphasizes the consistent application of risk rating systems to ensure ML/TF risks are adequately mitigated.
NEW QUESTION # 38
Which action would an auditor take to evaluate design effectiveness?
- A. Confirm that alerts in transaction monitoring have been properly escalated or waived.
- B. Check whether the policies and procedures are consistent with the authorities' regulations.
- C. Carry out a sample check of suspicious activity reports and make sure they are in line with policies and procedures.
- D. Confirm that customer records are being kept in accordance with policies and procedures.
Answer: B
Explanation:
* Explanation:Evaluating design effectiveness involves determining whether policies and procedures align with regulatory standards, which sets the foundation for a compliant AML/CFT program. This is a design-level assessment rather than testing implementation or outcomes, which would pertain to operational effectiveness.
NEW QUESTION # 39
Which scenarios should be used to monitor for potential elder abuse? (Select Two.)
- A. Scenarios 7
- B. Scenarios 2
- C. Scenarios 8
- D. Scenarios 5
- E. Scenarios 1
Answer: A,C
Explanation:
* Explanation:Scenarios 7 and 8 align with elder abuse detection by focusing on unusual account behaviors, like abrupt large withdrawals or transactions inconsistent with the elder's profile. Patterns like these often indicate exploitation.
NEW QUESTION # 40
During a sanction review, an auditor notes that several of the bank's large corporate clients continue to route transactions through the bank to certain Office of Foreign AssetsControl (OFAC)-sanctioned countries.The head of corporate clients stated that these transactions were executed under the OFAC license.What should an auditor know to distinguish between an OFAC general license and a specific license?
- A. A specific license authorizes a type of transaction and a general license authorizes a transaction in response to a written license application.
- B. A general license authorizes a transaction for an entity and a specific license authorizes a transaction for an individual.
- C. A general license authorizes a type of transaction and a specific license authorizes a transaction in response to a written license application.
- D. A specific license authorizes a transaction for an entity and a general license authorizes a transaction for an individual.
Answer: C
Explanation:
Distinguishing General and Specific Licenses:
* Ageneral licensepermits predefined categories of transactions without individual approval.
* Aspecific licenseis issued for unique transactions based on a written application evaluated on a case-by- case basis.
OFAC Guidance:
* Auditors should verify that transactions routed through sanctioned countries align with the licenses and confirm appropriate documentation for compliance.
NEW QUESTION # 41
Independent testing of the New York branch of a foreign bank is conducted by an outsourced audit firm. The independent testing report should be submitted to which authority in order to provide appropriate level of governance and oversight?
- A. New York branch regulatory compliance committee headed by the chief incumbent of the branch
- B. Compliance oversight committee of the New York branch headed by the chief compliance officer
- C. Bank's designated board committee at the head office
- D. Main office risk management committee
Answer: C
Explanation:
Reporting to the Head Office Board Committee:
* Independent testing reports must be submitted to the highest governance body to ensure proper oversight and alignment with global AML/CFT policies.
* This ensures that findings are addressed at the appropriate organizational level.
CAMS-Audit and FATF Guidelines:
* Governance frameworks outlined in CAMS-Audit and FATF recommendations emphasize the importance of board-level oversight for critical compliance functions
NEW QUESTION # 42
What type of audit approach should the auditor use when testing KYC files as part of an AML examination?
- A. Risk-based
- B. Full scope
- C. Vertical
- D. Horizontal
Answer: C
Explanation:
Understanding the Vertical Approach:
* A vertical audit focuses on reviewing the entire process or function within a single area or department, such as testing KYC files for compliance and effectiveness in a specific customer group or business line.
Application in AML Examinations:
* Vertical audits are particularly useful for examining KYC processes as they allow auditors to trace the end-to-end workflow, from customer onboarding to risk assessment and ongoing monitoring.
Alignment with Advanced CAMS-Audit Guidelines:
* The vertical approach provides detailed insights into compliance gaps within the KYC function, helping auditors identify root causes and systemic issues, which is emphasized in CAMS-Audit training.
NEW QUESTION # 43
Why is it crucial for the audit plan to consider the effectiveness of the AML risk assessment controls and risk mitigants?
- A. Strict CDD rules promote high ethical and professional standards in the financial industry.
- B. There is a regulatory requirement for the audit to update the AML risk assessments on a continuous or specified periodic basis.
- C. Improper identification and assessment of risk creates deficiencies resulting in an overall weakened AML compliance program.
- D. Audits need to approve the implementation of the controls and review testing outcomes.
Answer: C
Explanation:
B: Improper identification and assessment of risk creates deficiencies resulting in an overall weakened AML compliance program.
NEW QUESTION # 44
Which circumstance would impair an auditor's independence and objectivity?
- A. Donating funds to a local chanty which relates to the organization being audited
- B. Working with staff to design and implement key controls
- C. Presenting at a local audit industry event where best practices are discussed
- D. Attending internal meetings where key risk indicators are discussed
Answer: B
Explanation:
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.
NEW QUESTION # 45
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 auditorreview to assess whether this risk has been addressed?
- A. Request data on the volume and value of transactions through the privately-owned ATM customers.
- B. Prepare to audit a sample of the FI's privately-owned ATM customers.
- C. Draft policies and procedures for the FI's privately-owned ATM customers.
- D. Review the current risk assessment to determine the existence of privately-owned ATM customers.
Answer: D
Explanation:
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.
NEW QUESTION # 46
Considering recent changes in the bank's correspondent banking business. Which is the most important risk indicator for the internal auditor to review?
- A. The purpose of the services provided to the respondent bank.
- B. The management and ownership of the respondent bank.
- C. The jurisdiction in which the respondent bank is located.
- D. The major business activities of the respondent bank.
Answer: C
Explanation:
Jurisdictional risk is critical in correspondent banking due to potential exposure to countries with weaker AML
/CFT controls, high corruption levels, or sanctions.
NEW QUESTION # 47
Which does a financial institution (FI) need to do when outsourcing an independent audit?
- A. Investigate whether the audit firm has conducted prior audits with the Fl.
- B. Choose an audit firm based on price consideration and geographic location.
- C. Select an audit firm based on recommendations from the AMI compliance officer.
- D. Ensure that the scope of the audit and the experience of the auditors match the needs of the Fl.
Answer: D
Explanation:
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.
NEW QUESTION # 48
An auditor plans to examine a sample targeting newly onboarded, high net-worth clients to assess adherence to their onboarding policies. What sampling methods should the auditor use? (Select Three.)
- A. Stratified sampling
- B. Snowball sampling
- C. Systematic sampling
- D. Judgment sampling
- E. Simple random sampling
- F. Discovery sampling
Answer: A,C,D
Explanation:
Sampling Methods Justification:
* A. Judgment Sampling: Enables the auditor to target high net-worth clients specifically based on their judgment of risk factors.
* B. Stratified Sampling: Allows for dividing the population into groups (e.g., high net-worth clients) and selecting samples from each group.
* F. Systematic Sampling: Ensures a structured and unbiased selection process, suitable for large datasets.
NEW QUESTION # 49
When reviewing an AML policy, an auditor should expect to find that the policy.
- A. has been approved by regulators.
- B. contains items related to staff training.
- C. was reviewed and approved by the money laundering reporting officer.
- D. is aligned with investment strategy.
Answer: B
Explanation:
AML Policy Expectations:
* Staff training is a fundamental component of an effective AML program. FATF Recommendations and Basel Committee guidelines require AML policies to address staff training to ensure compliance with AML/CFT laws
NEW QUESTION # 50
During the ongoing due diligence process the company becomes aware that the customer is holding personal assets for a politically exposed person (PEP). What should the auditor recommend to enhance the control environment for this customer relationship? (Select Three.)
- A. Deploy automated monitoring toots to efficiently peruse the customer's KYC information and assure that the customer's KYC risk rating is correct.
- B. File a suspicious activity report as the previous riskrating was not correct.
- C. Review the customer risk profile every two years as with any other customers.
- D. Designate the account as a PEP-account.
- E. Conduct enhanced due diligence and enhanced ongoing monitoring of the customer relationship.
- F. Review and document the details of the customer s asset-holding arrangement.
Answer: D,E,F
Explanation:
C:Designating the account as a PEP-account triggers additional monitoring and controls as PEPs inherently pose higher risks.
D:Enhanced due diligence (EDD) and ongoing monitoring are essential for PEPs to track their financial activities closely and address any anomalies.
E:Documenting the details of the asset-holding arrangement provides clarity on the customer's profile and any associated risks.
NEW QUESTION # 51
......
Verified Advanced-CAMS-Audit dumps Q&As - 2025 Latest Advanced-CAMS-Audit Download: https://www.testkingpdf.com/Advanced-CAMS-Audit-testking-pdf-torrent.html
Dumps Questions [2025] Pass for Advanced-CAMS-Audit Exam: https://drive.google.com/open?id=1OdW8JgBdeMR1Exjr_sBtuUxAYY24HkT8
