Free Practice Questions for ACAMS CAMS Exam

Transaction monitoring governanceinvolves ensuring thatAML detection systems are effective, aligned with regulatory standards, and capable of identifying evolving threats.

Option B (Correct):Legal cooperation is essential for responding to subpoenas and law enforcement inquiries.

Option D (Correct):Regularly updating transaction monitoring scenarios ensures that the system adapts to emerging financial crime trends.

Why Other Options Are Incorrect:

Option A (Incorrect):SARs cannot be withdrawn unless an error was made—once filed, SARs remain confidential and must be retained.

Option C (Incorrect):Client profile updates are a CDD/KYC function, not directly related to transaction monitoring governance.

Best Practices for Transaction Monitoring Governance:

Regularly review system effectiveness through validation tests.

Collaborate with legal and compliance teams for risk mitigation.

Use AI and data analytics to refine detection accuracy.

AML/CFT frameworks worldwide require firms to apply a risk-based approach (RBA) to customer due diligence. Under FATF standards, the risk profile of the customer is the primary factor that determines how frequently CDD information should be refreshed.

Higher-risk customers—such as politically exposed persons (PEPs), customers operating in high-risk jurisdictions, or those with complex ownership structures—require more frequent reviews and updates to ensure information remains accurate and risks are appropriately mitigated. Lower-risk customers may be subject to less frequent refresh cycles.

Operational burden, cost, or automation capabilities are not valid drivers for determining CDD refresh frequency. Regulators expect firms to design processes that align with risk, even if this requires additional resources or system enhancements.

Therefore, customer risk profile is the foremost and decisive consideration when setting periodic CDD refresh timelines.

Terrorist financing can be facilitated on gaming platforms particularly through the trading of in-game items for fiat currency. This mechanism allows for the movement of value outside the formal financial system, potentially evading detection and reporting requirements.

“One of the key ML/TF risks in online gaming is the ability to convert virtual assets or in-game items into real-world (fiat) currency, thereby providing a channel for laundering money or funding terrorist activities.”

(CAMS 6th Edition, Chapter: Risks and Methods of Money Laundering and Terrorist Financing; FATF, Virtual Assets Guidance 2019)

Incorrect Options:

A: Buying in-game items with in-game currency does not in itself facilitate terrorist financing.

B: Exchanging items between players may be a step in layering but is not direct TF unless items are traded for fiat.

D: Obtaining items by in-game activity is standard gameplay and not a TF method.

UN sanctions regimes are not punitive but aim to:

B: “Support peaceful resolution of conflicts.”

D: “Deter non-democratic and unconstitutional changes of government.”

E: “Promote respect for human rights and humanitarian law.”(CAMS 6th Edition, United Nations Sanctions; UN Security Council Mandates)

Incorrect:

A: The UN does not impose sanctions to force regime type.

C: Sanctions are not for punishing weak AML controls.

Accountants are classified as designated non-financial businesses and professions (DNFBPs) under FATF standards and must apply a risk-based approach to AML/CFT compliance.

A customer acceptance policy is a key tool that helps accountants define which clients or engagements fall outside their risk appetite. This supports consistent onboarding decisions and ensures high-risk clients are either subject to enhanced due diligence or declined.

Additionally, due to the nature of accounting services—such as advisory, tax preparation, and financial reporting—traditional automated transaction monitoring systems used by banks are often not appropriate. Instead, accountants rely more heavily on engagement-based risk assessments, client profiling, and professional judgment.

Accountants are subject to record-keeping requirements longer than two years in most jurisdictions, and geographic risk is always relevant when assessing AML/CFT exposure. Risk assessments must be comprehensive and proportionate, not artificially limited.