Question: 1
An audit determines that an important control is not being performed. The operational manager responds to the audit comment stating that they do not have adequate resources in the department to accomplish this task. The audit item discussion between the auditor and the operational manager is a(n):
Question: 2
A financial institution (FI) recently updated its transaction monitoring (TM) thresholds During validation which should be provided as evidence of optimized thresholds'? (Select Two.)
Question: 3
Which should the auditor recommend to management in terms of the client's risk rating procedures?
A Remove enhanced due diligence requirements for long-standing clients that are art collectors and do not transact with precious metals.
B Include an assessment of risk factors of channel, credit, and transaction risk to determine the client's composite AML and sanctions risk score.
C Provide staff with training on new record retention requirements for occasional transactions.
D Remediate client files to verify their AML and sanctions risk rating and document enhanced due diligence measures, where applicable.
Incorporating Comprehensive Risk Factors
By including an assessment of channel, credit, and transaction risks, the client's overall risk profile is accurately determined. This aligns with risk-based approaches emphasized by FATF and CAMS-Audit standards.
These risk factors provide a granular view of the client's risk level, ensuring proper classification into Standard or Enhanced Due Diligence categories.
Regulatory Alignment
FATF Recommendations mandate that client risk assessments consider the products, services, and delivery channels used, as well as geographic and transactional risks.
Conclusion
Implementing composite AML and sanctions risk scores ensures the institution is compliant with regulatory standards and adequately mitigates risks associated with different client profiles.
Answer : B
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Question: 4
Which are key responsibilities of internal auditors? (Select Two.)
Question: 5
When assessing the effectiveness of a transaction monitoring system, which indicators require active monitoring by the auditor or compliance'? (Select Two.)