This page was exported from Exam for engine [ http://blog.test4engine.com ] Export date:Wed Mar 26 11:07:29 2025 / +0000 GMT ___________________________________________________ Title: 2025 Valid Advanced-CAMS-Audit Exam Updates - 2025 Study Guide [Q18-Q38] --------------------------------------------------- 2025 Valid Advanced-CAMS-Audit Exam Updates - 2025 Study Guide Advanced-CAMS-Audit Certification - The Ultimate Guide [Updated 2025] QUESTION 18Which task should an auditor complete first when preparing to audit the client risk scoring methodology?  Query the completeness of the customer data to be provided.  Discuss the client risk scoring process with the head of AML.  Review the financial institution’s AML risk assessment to understand the institution’s client base.  Review a list of high-risk customers provided by compliance. Understanding Client Risk Scoring Methodology:* Reviewing the AML risk assessment offers a comprehensive view of the institution’s client base, risk appetite, and segmentation strategies.Preparation Steps:* Assessing the AML risk assessment ensures that auditors understand the institution’s framework for categorizing and managing client risks.Importance in CAMS-Audit Framework:* CAMS-Audit highlights the necessity of linking client risk scoring to the broader institutional AML risk assessment.QUESTION 19What type of audit approach should the auditor use when testing KYC files as part of an AML examination?  Horizontal  Full scope  Vertical  Risk-based 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.QUESTION 20When assessing the effectiveness of a transaction monitoring system, which indicators require active monitoring by the auditor or compliance’? (Select Two.)  Data quality and mapping  Scenario altering techniques  Robustness of feedback relating to submitted suspicious activity reports  False positive ratio  Complexity of monitoring scenarios Transaction Monitoring Effectiveness:* A. Data Quality: Accurate data mapping ensures scenarios detect relevant risks, reducing errors in monitoring.* D. False Positives: Monitoring false positive ratios improves system efficiency and minimizes unnecessary alerts.QUESTION 21During the auditing process the auditor finds that the entity never updates the customers risk assessment.Which remediation actions should the auditor suggest? (Select Two.)  Compliance regularly updates the lists of high- and medium-risk countries to ensure updated customer risk profiles.  Audit designates an audit manager to review customer profiles annually.  Delete non-active customer profiles to reduce the workload of ongoing surveillance.  Management engages an independent third party to update all the customer risk profiles.  The business updates the customer risk profiles periodically in accordance with the customer risk level. A:Regularly updating lists of high- and medium-risk countries ensures that customer risk profiles align with the most current geopolitical and economic risks.E:Periodic updates to customer risk profiles, based on their assigned risk level, are critical for maintaining an accurate and dynamic risk assessment system.QUESTION 22The auditor determines that the population for transaction monitoring testing can be stratified into five distinct categories. To complete testing which sampling method should the auditor use to identify the sample size?  Judgmental  Proportional  Statistical  Risk-based * Importance of Statistical Sampling in Transaction Monitoring Testing:* Statistical sampling is the most suitable method when dealing with stratified populations, as it ensures a representative sample is drawn from each distinct category.* This method allows auditors to achieve reliable results by applying mathematical and probabilistic models to calculate the required sample size, ensuring unbiased and valid conclusions.* Relevance to Stratified Populations:* When the transaction monitoring population is divided into distinct categories, statistical sampling ensures that each category is proportionately represented based on its size or risk level within the overall population.* Evaluation of Other Options:* Judgmental Sampling:Relies on auditor discretion and may introduce bias, making it unsuitable for ensuring proportional representation in stratified populations.* Proportional Sampling:Focuses only on proportional representation but does not leverage statistical tools to determine the optimal sample size or confidence levels.* Risk-Based Sampling:While effective in certain contexts, it is better suited for focusing on high- risk categories rather than ensuring comprehensive representation of all strata.* Alignment with Advanced CAMS-Audit Standards:* Advanced CAMS-Audit recommends statistical sampling for stratified populations to ensure that all categories are adequately tested and results are statistically valid for compliance and performance assessments.Conclusion:The auditor should usestatistical samplingto identify the sample size when testing a stratified population for transaction monitoring. This ensures a reliable, unbiased, and mathematically sound basis for the audit.QUESTION 23Which is considered a minimum requirement in a customer identification program?  Transaction reporting procedures used to report suspicious transactions to the regulator  Transaction monitoring procedures that specify the information that will be retained in each transaction  Account opening procedures that specify the information that will be obtained from each customer  Customer enhanced due diligence procedures used to identify unusual transactions A customer identification program (CIP) mandates that financial institutions obtain specific information from customers during account opening. This includes verifying identity through reliable documents, understanding the purpose of the account, and assessing associated risks.Advanced CAMS-Audit and FATF recommendations highlight the necessity of robust account opening procedures as the foundation for AML compliance.QUESTION 24Suspicious 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?  Assign to continuous monitoring.  Include the lack of metrics as a deficiency in the reporting.  Escalate the finding regarding the lack of metrics to the board of directors.  Review within the IT audit. 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.QUESTION 25The mam characteristics of an AML program testing are:  tailored and risk-based.  standard and focused.  innovative and evaluative.  remedial and interdependent. Characteristics of Effective AML Program Testing:* Tailored:Custom-designed to address specific organizational risks.* Risk-Based:Prioritizes high-risk areas to ensure optimal resource allocation and compliance.Alignment with CAMS-Audit and FATF Principles:* Both emphasize the importance of a risk-based approach to AML program evaluation to mitigate the most significant threats.QUESTION 26What factors are considered tor conducting an external audit and assurance review? (Select Three.)  Type of reporting format  Budget available for the review  Purpose of the review  Type of risk assessment needed  Users of the external report  Information that will be required Factors for External Audit:* C. Purpose of the Review: Determines the scope and focus of the audit to align with regulatory or organizational objectives.* D. Type of Risk Assessment Needed: Tailors the audit methodology to the identified risks.* E. Users of the External Report: Ensures the audit addresses the needs of regulators, stakeholders, or management.QUESTION 27When 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.  regulatory requirements.  internal controls.  policy.  scope. 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.QUESTION 28What model test verifies that alerts indicative of potentially suspicious activity are not missed due to threshold settings?  Black-box configuration  Above-the-line  Gap analysis  Below-the-line Understanding Below-the-Line Testing:* Below-the-line testing evaluates scenarios where alerts were not generated but could have been if the thresholds were set differently.* This testing method focuses on identifying potential gaps in the detection model that might lead to missed alerts for suspicious activities.Significance in AML/CFT Compliance:* This type of test ensures the system’s thresholds are not too restrictive, which could result in legitimate suspicious activities being overlooked.* It provides insight into whether the system needs re-calibration to balance false positives and missed detections.Process of Below-the-Line Testing:* Data Sampling: Analyze transactions that fall just below the alert generation threshold.* Scenario Analysis: Identify whether these transactions exhibit patterns consistent with suspicious activities.* Model Adjustment: Adjust thresholds to optimize the trade-off between sensitivity and specificity.Advanced CAMS-Audit Reference:* CAMS-Audit guidelines detail below-the-line testing as an integral part of tuning and validating monitoring models. It ensures that monitoring systems align with risk appetite and operational realities.* FATF guidance on dynamic model validation highlights the importance of continuous review and adaptation of thresholds to evolving typologies and risks.Case Example and Regulatory Perspective:* Advanced CAMS-Audit recommends below-the-line tests especially in high-risk sectors, ensuring robust detection mechanisms.* Regulatory expectations, as per FATF and Basel guidelines, require proactive measures to address model gaps that below-the-line testing can identify.QUESTION 29An audit manager identifies that a financial institution (Fl) has not produced a business-level risk assessment in accordance with policy. The senior manager of the Fl assures that assessing risk at the individual client level and aggregating the data is an acceptable approach. How should the audit manager proceed?  Issue a finding that requires the completion of a business-level risk assessment.  Accept the risk conclusions provided by the senior manager.  Test the accuracy of the mathematical aggregation of the risk assessments.  Discuss with the senior manager to establish the risk appetite. Importance of Business-Level Risk Assessments:* Aggregating client-level risk assessments does not replace a comprehensive business-level risk assessment, which is required for holistic risk management.Audit Manager’s Responsibility:* The absence of a business-level risk assessment constitutes a policy violation and must be formally addressed through a finding.CAMS-Audit Guidelines:* CAMS-Audit emphasizes the need for layered risk assessments, including enterprise-wide evaluations, to comply with regulatory standards.QUESTION 30As an auditor reviewing this investigation report, which indicates an effective process?  The compliance officer concluded the investigation approximately 3 months later and filed a suspicious activity report.  The compliance officer concluded from the report that there are reasonable grounds for suspicion and filed a suspicious activity report.  The compliance officer filed a suspicious activity report and omitted details regarding the reason it was filed.  The compliance officer decided not to cease the Business relationship hut kept the account under rigorous monitoring process. Filing an SAR based on reasonable grounds for suspicion ensures compliance with AML obligations and demonstrates the effectiveness of the investigative process.QUESTION 31Which requirement of a financial institution’s compliance program should an auditor review first to understand key roles and responsibilities?  Designation of an individual or individuals responsible for coordinating and monitoring day-to-day compliance  List of high-risk customers subject to enhanced due diligence and the measures taken to mitigate the risks  Names of politically exposed persons that are subject to ongoing monitoring  List of suspicious transactions reported to the regulator 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.QUESTION 32During 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.)  File a suspicious activity report as the previous riskrating was not correct.  Deploy automated monitoring toots to efficiently peruse the customer’s KYC information and assure that the customer’s KYC risk rating is correct.  Designate the account as a PEP-account.  Conduct enhanced due diligence and enhanced ongoing monitoring of the customer relationship.  Review and document the details of the customer s asset-holding arrangement.  Review the customer risk profile every two years as with any other customers. 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.QUESTION 33Which are objectives of the issue confirmation step in the audit issue management process? (Select Two.)  Findings ate explained and assigned to the accountable owners.  Additional remediation is identified and planned.  Findings ate clearly written and facts are accurate  Communication, follow-up. and documentation are tracked on scheduled sustainability validations.  Compliance Identifies and schedules pre-exam validation as appropriate. Key Objectives of Issue Confirmation:* Findings need to be clearly articulated and assigned to ensure accountability and actionable remediation.* Accurate documentation ensures that facts are not disputed and remediation can proceed efficiently.Irrelevant Options:* B:Additional remediation is a later step in the issue resolution process.* D and E:Tracking and pre-exam validation relate to follow-up stages, not the initial confirmation step.QUESTION 34Which key risk indicator should the internal auditor consider when reviewing correspondent banking activities?  Volume of transaction activity referred by the respondent bank.  Size and stature of a respondent bank’s operations in its home country.  Number of respondent banks located in higher risk jurisdictions.  Number of correspondent banking relations terminated. 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.QUESTION 35When reviewing an AML policy, an auditor should expect to find that the policy.  is aligned with investment strategy.  was reviewed and approved by the money laundering reporting officer.  has been approved by regulators.  contains items related to staff training. 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 lawsQUESTION 36An auditor should present exceptions identified during testing to the auditee after.  preliminary observation of exceptions.  final audit report issuance  performance of additional testing.  analysis of likelihood and impact. Presentation of Exceptions:* Auditors must analyze the exceptions based on their likelihood of occurrence and potential impact on compliance and operational risks before presenting findings to the auditee.Supporting Standards:* Basel and FATF emphasize prioritizing findings based on their materiality and risk implications during the audit process.QUESTION 37When testing the operational effectiveness of an institution’s customer risk rating model an auditor finds that the risk rating is not in accordance with the model specification in some cases.After interviewing developers andofficers,the auditor learns the specification document is inaccurate and has not been updated in a timely manner.Which are appropriate corrective action plans’? (Select Two.)  Alert the person incharge of releasing the model that me release must comply with the specifications.  Check periodically if released rules are operating as per the specifications.  Set up a checkpoint before release to make sure that the release is in accordance with the specifications.  Tram KYC personnel to recognize errors in the customer risk rating model.  Report this matter to the board of directors. B: Periodic Checks: Regular monitoring ensures that implemented rules align with updated specifications and are functioning as intended, reducing the risk of deviation from compliance standardsints Before Release**:Establishing validation checkpoints ensures that all releases comply with documented specifications, mitigating risks of errors in the risk rating modelQUESTION 38Which 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?  Available resources and board of directors’ commitment  Responsible action owner and internal audit commitment to follow up  Reporting the breach and the regulatory response  Target completion date and status update on remedial action 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. Loading … ACAMS Advanced-CAMS-Audit Exam Syllabus Topics: TopicDetailsTopic 1Planning and Scoping: This section of the exam measures the skills of audit managers and covers the processes involved in planning an audit engagement. It includes defining the scope, objectives, and resources required for an effective audit. A critical skill evaluated here is the ability to identify risks and develop a comprehensive audit plan that addresses those risks while ensuring compliance with relevant standards.Topic 2Fieldwork and Evaluation: This section of the exam measures the skills of target professionals to demonstrate audit procedures during fieldwork. It involves collecting evidence, testing controls, and evaluating findings to ensure accuracy and reliability.Topic 3Corporate Governance and the Audit Function: This section of the exam measures the skills of auditing professionals and covers the principles and frameworks that guide effective governance in organizations. It emphasizes understanding the roles and responsibilities of the board of directors, management, and auditors. A key skill assessed is the ability to evaluate governance structures and their impact on organizational performance.Topic 4Reporting, Recommendations, and Follow-Up: This section of the exam measures the skills of audit managers and covers the communication of audit findings to stakeholders. It includes developing clear recommendations for improvement based on evaluation results and ensuring follow-up on those recommendations.   Advanced-CAMS-Audit Practice Exam and Study Guides - Verified By Test4Engine: https://www.test4engine.com/Advanced-CAMS-Audit_exam-latest-braindumps.html --------------------------------------------------- Images: https://blog.test4engine.com/wp-content/plugins/watu/loading.gif https://blog.test4engine.com/wp-content/plugins/watu/loading.gif --------------------------------------------------- --------------------------------------------------- Post date: 2025-03-14 10:59:40 Post date GMT: 2025-03-14 10:59:40 Post modified date: 2025-03-14 10:59:40 Post modified date GMT: 2025-03-14 10:59:40