Acams CKYCA Exam Questions Instant Access

Question 1

Which customer type represents the highest risk of money laundering to a financial institution?

APayment service provider

BConstruction company

CAccounting firm

DWholesale food distributor

Answer : A

Payment service providers pose higher money laundering risk because they handle high volumes of transactions, often across multiple jurisdictions, and may process funds on behalf of third parties, increasing the potential for illicit activity.

Question 2

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 3

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 4

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 5

According to a reputable financial news source, a client is being taken over by one of its competitors. The public registry has not yet reflected the ownership change. Which step should the KYC analyst take?

AObtain legal documents from the client corroborating its current ownership structure.

BFollow the reputable financial news source and update the client's profile.

CPut the KYC refresh on hold and wait for the public sources to be updated.

DDo not change the ownership information in the profile until it is updated in the public registry.

Answer : A

Until the ownership change is officially recorded in a public registry, the KYC analyst should obtain legal documents directly from the client to verify the current ownership structure and maintain accurate CDD records.

Question 6

Which risk assessment factor is most essential for a customer risk evaluation?

ANumber of years the company has been in operation
B Number of countries the company operates in

CCustomer country/jurisdiction of establishment

DCustomer size in terms of the number of employees

Answer : C

The customer's country or jurisdiction of establishment is a key risk assessment factor because it determines the applicable legal framework, AML/CFT risk level, and potential exposure to high-risk or sanctioned regions.

Question 7

A corporate client changes directors and the address of its registered office. Which documentation would be sufficient to verify these changes?

AGovernment-issued documents indicating the changes

BNotes from a phone call with client representatives who mention the changes

CPrintout of the client's website where the changes are announced

DSigned letter from the client's secretary describing the changes

Answer : A

Government-issued documents, such as updated company registry extracts, provide authoritative and verifiable proof of changes to directors and registered office details, ensuring compliance with CDD requirements.

Acams Certified Know Your Customer Associate CKYCA Exam Questions