Advanced-CAMS-Audit Exam Dumps - ACAMS AML Certifications Questions and Answers

Dynamic Nature of Customer Risk Assessment (CRA):

A comprehensive CRA should incorporate jurisdictional risks, as customer location changes could introduce new risks, such as exposure to high-risk or non-compliant jurisdictions​​.

FATF Recommendations on Risk-Based Approach:

Periodic updates to the CRA, including changes in customer location, align with FATF’s risk-based approach and Recommendation 10​​.

Audit Observation Implications:

Omission of jurisdictional assessments could result in undetected risks, undermining the integrity of the AML program.

Evaluating the Management of Risk:

Internal auditors assess the effectiveness of risk management strategies to ensure alignment with organizational goals and regulatory expectations.

Acting as a Catalyst for Improvement:

Auditors provide insights and recommendations to enhance controls and improve overall risk management practices.

CAMS-Audit Emphasis:

CAMS-Audit outlines the dual role of internal auditors in evaluating and facilitating risk management improvements​​.

Definition of Residual Risk:

Residual risk is the risk that remains after controls are implemented to mitigate inherent risks.

It reflects the effectiveness of controls and highlights areas requiring further attention.

Relevance in Risk Management:

Evaluating residual risk helps determine whether existing controls adequately address the identified risks.

CAMS-Audit Best Practices:

Auditors must assess residual risk as part of the broader risk management framework to ensure regulatory compliance and operational resilience​​.

Data Integrity Review:

An end-to-end diagram provides a comprehensive view of data sources, flows, and integrity checkpoints, enabling auditors to assess the completeness and accuracy of transactional data in AML systems​​.

Importance of Visual Representation:

FATF and Basel guidelines stress the need for clarity in data flows to ensure accurate monitoring and reporting of suspicious activities​.

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​​.

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​​​.