CKYCA Acams Practice Questions

Question #1 (Topic: Demo Questions)

A politically exposed person (PEP) is eager to open a private account with an international bank. In addition to performing the normal CDD, which measure should be required from the AML officer?

A.

Conduct enhanced ongoing monitoring of the business relationship each quarter.

B.

Obtain senior management approval for establishing such business relationships.

C.

Contact law enforcement, as PEPs pose enhanced risks to an institution.

D.

Make a note of a PEP business relationship and file a suspicious transaction report to the local financial intelligence unit.

Correct Answer: B

Explanation:

FATF requires that before establishing a business relationship with a PEP, financial institutions must obtain senior management approval, along with applying enhanced due diligence measures such as verifying the source of wealth and funds.

Question #2 (Topic: Demo Questions)

A KYC analyst is onboarding a high-net-worth client and, during the screening process, notices that the prospective client is the parent of a government minister. After the analyst performs a source of wealth analysis, whose approval is needed before opening the account?

A.

Relationship management

B.

Senior management

C.

Team management

D.

Project management

Correct Answer: B

Explanation:

FATF requires that the decision to establish or continue a business relationship with a Politically Exposed Person (PEP), or their close family members, must be approved by senior management after appropriate enhanced due diligence has been completed.

Question #3 (Topic: Demo Questions)

During a routine CDD update in a financial institution, a junior member of the compliance department identifies that the spouse of the reviewed client was elected as a member of government. Which action should the junior member take?

A.

Inform the relationship manager about the election of the client's spouse.

B.

Make a note on the client's account of this fact and continue operations as usual.

C.

File a suspicious transaction report because the client did not notify the financial institution.

D.

Update the client's information to reflect that the client is related to a politically exposed person.

Correct Answer: D

Explanation:

FATF guidelines require enhanced due diligence when a client becomes a Politically Exposed Person (PEP) or is related to one. Since the client’s spouse is now a government member, the client must be classified as related to a PEP, and the institution’s records must be updated accordingly.

Question #4 (Topic: Demo Questions)

An Iranian customer is incorrectly recorded in the system as being from Ireland. As a result of this error, the customer will be:

A.

assigned fewer risk points.

B.

prohibited from funding a new account.

C.

disallowed from opening new accounts.

D.

not screened against applicable sanctions lists.

Correct Answer: A

Explanation:

Misrecording the customer’s country as a low-risk jurisdiction like Ireland instead of a high-risk sanctioned jurisdiction like Iran would result in the system assigning fewer risk points, underestimating the customer’s true risk level.

Question #5 (Topic: Demo Questions)

A KYC analyst notices frequent use of letters of credit as a method of trade finance. It further appears that trades covered by letters of credit are not consistent with the customer’s usual business. What should be the next action taken by the KYC analyst?

A.

Notify the Board of Directors and obtain the Board's approval for filing a STR.

B.

Refer internally for a potential suspicious transaction report

C.

Establish internally the existence of a criminal violation.

D.

Prepare to close the customer’s account.

Next Question

Correct Answer: B

Explanation:

Unusual trade finance activity, such as letters of credit inconsistent with the customer’s normal business, is a potential red flag for trade-based money laundering. The appropriate step is to make an internal referral for review and possible filing of a suspicious transaction report (STR).

Acams CKYCA - Certified Know Your Customer Associate Certification Exam

A politically exposed person (PEP) is eager to open a private account with an international bank. In addition to performing the normal CDD, which measure should be required from the AML officer?

Conduct enhanced ongoing monitoring of the business relationship each quarter.

Obtain senior management approval for establishing such business relationships.

Contact law enforcement, as PEPs pose enhanced risks to an institution.

Make a note of a PEP business relationship and file a suspicious transaction report to the local financial intelligence unit.

Correct Answer: B

FATF requires that before establishing a business relationship with a PEP, financial institutions must obtain senior management approval, along with applying enhanced due diligence measures such as verifying the source of wealth and funds.

A KYC analyst is onboarding a high-net-worth client and, during the screening process, notices that the prospective client is the parent of a government minister. After the analyst performs a source of wealth analysis, whose approval is needed before opening the account?

Relationship management

Senior management

Team management

Project management

Correct Answer: B

FATF requires that the decision to establish or continue a business relationship with a Politically Exposed Person (PEP), or their close family members, must be approved by senior management after appropriate enhanced due diligence has been completed.

During a routine CDD update in a financial institution, a junior member of the compliance department identifies that the spouse of the reviewed client was elected as a member of government. Which action should the junior member take?

Inform the relationship manager about the election of the client's spouse.

Make a note on the client's account of this fact and continue operations as usual.

File a suspicious transaction report because the client did not notify the financial institution.

Update the client's information to reflect that the client is related to a politically exposed person.

Correct Answer: D

FATF guidelines require enhanced due diligence when a client becomes a Politically Exposed Person (PEP) or is related to one. Since the client’s spouse is now a government member, the client must be classified as related to a PEP, and the institution’s records must be updated accordingly.

An Iranian customer is incorrectly recorded in the system as being from Ireland. As a result of this error, the customer will be:

assigned fewer risk points.

prohibited from funding a new account.

disallowed from opening new accounts.

not screened against applicable sanctions lists.

Correct Answer: A

Misrecording the customer’s country as a low-risk jurisdiction like Ireland instead of a high-risk sanctioned jurisdiction like Iran would result in the system assigning fewer risk points, underestimating the customer’s true risk level.

A KYC analyst notices frequent use of letters of credit as a method of trade finance. It further appears that trades covered by letters of credit are not consistent with the customer’s usual business. What should be the next action taken by the KYC analyst?

Notify the Board of Directors and obtain the Board's approval for filing a STR.

Refer internally for a potential suspicious transaction report

Establish internally the existence of a criminal violation.

Prepare to close the customer’s account.

Correct Answer: B

Unusual trade finance activity, such as letters of credit inconsistent with the customer’s normal business, is a potential red flag for trade-based money laundering. The appropriate step is to make an internal referral for review and possible filing of a suspicious transaction report (STR).