Free Practice Questions for ACAMS Advanced-CAMS-Audit Exam

Identification of Themes Relevant to Trade Finance Services:

Trade finance services for multinational companies participating in China's Belt and Road initiatives involve transactions with potential geopolitical, regulatory, and economic risks​​.

These transactions generally encompass cross-border activities, high-value accounts, and potentially politically exposed persons (PEPs)​​.

Scoring Theme A (11.2): Economic Activity and Geographical Risks:

As these services involve international trade, they are inherently linked to economic activity and geographical risks. FATF guidelines indicate the necessity to evaluate regions with different AML/CFT maturity levels. This is consistent with theme 11.2, focusing on the understanding and mitigation of risks associated with economic and geographical contexts​​.

Scoring Theme B (11.3): Customer Due Diligence and Enhanced Measures for High-Risk Profiles:

The target clientele includes multinational companies, which might require enhanced customer due diligence (EDD), especially when engaging with entities or PEPs from countries with varying regulatory controls​​.

FATF Recommendations and Basel Committee insights emphasize robust customer identification, verification, and ongoing monitoring, aligning with theme 11.3’s requirements​​.

Not Affected Themes:

C (12.1):This theme pertains more to specific reporting or transaction monitoring requirements that might not directly relate to the initiation of trade finance services.

D (12.2) and E (13.1):These themes are typically associated with procedural adjustments rather than the scoring of risk profiles.

Advanced CAMS-Audit Framework Alignment:

Advanced CAMS-Audit highlights the role of structured compliance frameworks in mitigating risks tied to strategic initiatives like the Belt and Road​​.

Evaluators assess the institution's alignment with FATF, Basel Committee, and regional guidelines to ensure adherence to best practices for risk mitigation​​.

Conclusion:The scoring themes A (11.2) and B (11.3) are significantly influenced by the introduction of trade finance services targeting multinational corporations under China's Belt and Road initiatives. This is due to the intertwined economic and geographical risks and the requisite enhanced due diligence measures for high-risk customer segments.

AML Compliance Policy Elements:

A. Record Keeping: Essential for regulatory compliance, ensuring accurate data retention for audits and investigations​​.

B. Suspicious Activity Reporting: A core AML requirement, mandated by FATF recommendations to identify and report suspicious transactions​​.

E. Training Requirements: Ensures staff understand their AML obligations, as highlighted in Basel and FATF guidelines​​.

Nature of Discussion:

Root cause analysis is required to identify underlying reasons for the failure to perform the control, particularly resource constraints​.

Key Compliance Justification:

Addressing the root cause aligns with Basel Committee guidelines on improving control environments and addressing systemic issues in AML compliance​​.

Scenario 1: Evaluates unusual activity, such as large, unexplained deposits or withdrawals, which are red flags in charity-related accounts .

Scenario 7: Exads to detect inconsistencies with the stated purpose, ensuring adherence to AML standards for NPOs.

Rationale for Documenting Conclusions:

Documenting findings ensures transparency and provides an audit trail. This is critical when the incident is consistent with provided evidence and no further investigation is warranted.

Audit Work Paper Standards:

CAMS-Audit recommends that all conclusions be adequately documented, especially when deviations from normal patterns are justified with valid explanations​​.

Key Roles and Responsibilities:

Identifying compliance coordinators helps auditors understand the operational framework and ensure clear accountability in managing day-to-day AML compliance activities.

Initial Review Focus:

This step provides a foundational understanding of the institution's compliance structure, enabling targeted assessments of other program components.

Advanced CAMS-Audit Reference:

CAMS-Audit emphasizes that the effectiveness of an AML program hinges on having designated individuals who oversee compliance processes​​.

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​​.