Acams CKYCA Exam Practice Test Instant Access

Question 1

During the regular periodic review of a high-risk client, a KYC analyst performs EDD checks and detects the presence of a politically exposed person. The KYC analyst should escalate this issue to the:

Aonboarding team for the assessment of risk

Bmanagement team for approval or denial of risk

Chead of the KYC team for approval or denial of risk.

Dprivacy officer for the assessment of risk

Answer : B

When a politically exposed person (PEP) is identified during enhanced due diligence, FATF requires that senior management approve the decision to continue or terminate the relationship due to the elevated financial crime risk.

Question 2

During the onboarding process of a new customer, it is noted that the customer is a politically exposed person opening a private banking account and has a foreign passport. Which statement best describes the industry best practice for the institution?

AMandatory periodic review should occur on at least an annual basis

BSimplified monitoring should occur on a yearly basis.

CEnhanced monitoring may be decided on by the business line manager.

DSimplified monitoring is required per the customer risk criteria.

Answer : A

Question 3

Which is an example of an EDD measure?

AVerifying the identity of the customer after the establishment of the business relationship

BMonitoring an account's transactions based on a monetary threshold

CObtaining information on the source of wealth of the customer

DIdentifying the purpose and nature of the business relationship

Answer : C

Obtaining and verifying the customer's source of wealth is a key Enhanced Due Diligence (EDD) measure, especially for high-risk customers such as PEPs, as it helps assess the legitimacy of their funds.

Question 4

A legal entity applies to open an account in a financial institution. The owners of the entity are 20 individuals with equal shareholding. Who should be identified as the Ultimate Beneficial Owner (UBO), per Financial Action Task Force (FATF) guidelines?

AAny six shareholders whose collective shareholding exceeds 25%

BAll 20 shareholders, because none exceeds the 25% threshold

CNo one; this is an orphan legal entity because it has no UBOs

DThe person(s) exercising control and/or acting as a senior management official(s)

Answer : D

FATF guidelines require identifying UBOs as individuals owning more than 25% or, if no one meets that threshold, those who exercise control through other means. In this case, no shareholder owns more than 25%, so the UBO is identified based on control, typically the person(s) in senior management.

Question 5

A KYC analyst suspects a transaction is related to a sanctioned individual. How should the analyst respond?

AContinue with the due diligence onboarding procedure, focusing on primary and secondary documentation.

BDiscuss the issue with the firm's compliance officer as it is of low priority.

CReach out to the customer to confirm their sanctions status during the onboarding process, and after that, once a year.

DReport the issue immediately according to the defined procedures.

Answer : D

Any suspicion of a link to a sanctioned individual must be reported immediately through the institution's defined sanctions compliance procedures to ensure legal and regulatory obligations are met without tipping off the customer.

Question 6

A compliance officer in an international bank is reviewing new customer onboarding files. The relationship manager provides a whole set of customer documents, in addition to information from open source research. What information should be used by the compliance officer as secondary documentation to verify the primary documentation?

AA phone bill, utility bill, or bank statement showing the name and address of the customer, issued less than 3 months ago

BGovernment-issued documents such as an identification card, passport, or driving license, issued more than 1 year ago

CGovernment-issued documents such as an identification card, passport, or driving license, issued less than 3 months ago

DA phone bill, utility bill, or bank statement showing the name and address of the customer, issued more than 1 year ago

Answer : A

Secondary documentation for verification purposes should be recent, reliable, and issued by a trusted source. Utility bills, phone bills, or bank statements issued within the last three months are commonly accepted to confirm address and identity details provided in primary documentation.

Question 7

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?

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

BRefer internally for a potential suspicious transaction report

CEstablish internally the existence of a criminal violation.

DPrepare to close the customer's account.

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).

Acams Certified Know Your Customer AssociateA CKYCA Exam Practice Test