Acams CKYCA Exam Questions Instant Access

Question 1

Assets under management show an increase of investors whose income originates from high-risk jurisdictions. This indicates higher risk in which area?

ACustomer

BGeographical

CPolitical

DEconomic

Answer : B

FATF considers jurisdictions with weak AML/CFT controls as high-risk. An increase in investors from such regions raises geographical risk, since the customers' funds originate from locations with elevated money laundering or terrorism financing threats.

Question 2

In relation to account activity, which is an example of tipping off?

ADisclosure of inside information based on KYC knowledge of a specific client

BRequest of additional information with respect to a client's behavior

CDisclosure of information to a regulatory body

DDisclosure of a suspicious transaction report to the subject of that report

Answer : D

Tipping off occurs when a customer is informed that a suspicious transaction report (STR) has been filed about them, which could compromise investigations and is prohibited under AML laws.

Question 3

An Ultimate Beneficial Owner (UBO) with a control prong is an individual with:

Aindirect ownership greater than a certain percent value.

Bdirect and indirect ownership greater than a certain percent value but who lacks management and operational control.

Cdirect and indirect ownership less than a certain percent value who exercises management and operational control.

Ddirect ownership greater than a certain percent value.

Answer : C

Under the control prong, a UBO is identified as an individual who may not meet the ownership threshold but still exercises significant management or operational control over the entity, thereby having effective influence over its activities.

Question 4

The owner of a local flower shop makes cash deposits on a regular basis to the shop's business account. Following the deposits, the owner wires the money to a high-risk country. Which action should a KYC analyst perform when conducting the periodic CDD review?

AReview the account activity with respect to the transaction profile of the customer.

BReview the business activities and update where necessary.

CEnd the business relationship due to wiring money to a high-risk country.

DReport a suspicious transaction with respect to wiring money to a high-risk country.

Answer : A

During a periodic CDD review, the analyst should assess whether the account activity, including cash deposits and transfers to high-risk countries, aligns with the customer's stated transaction profile. This step determines if further escalation or reporting is necessary.

Question 5

During an EDD process for a business customer, which document is the best source to identify and obtain details on the source of funds?

AFinancial statements

BCompany's website

CUtility bill

DArticles of incorporation

Answer : A

Financial statements provide verifiable details about a company's income sources, profitability, and cash flow, making them the most reliable document for identifying and confirming the source of funds during EDD.

Question 6

A KYC analyst receives a notification that the Office of Foreign Assets Control (OFAC) has updated its sanctioned entity and individual list. The analyst reviews the list and identifies a current customer. Which step should the analyst take first?

AReport the issue to the Money Laundering Reporting Officer.

BForm a sanctions committee to develop standard processes and procedures

CFreeze the customer's account and assets.

DContact the customer to request clarification

Answer : C

When a customer is identified as a sanctioned party, the immediate required action is to freeze the customer's account and assets in accordance with sanctions regulations, preventing any transactions before notifying the relevant authorities.

Question 7

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.

Acams Certified Know Your Customer Associate CKYCA Exam Questions