Acams CKYCA Exam Practice Test Instant Access

Question 1

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 2

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 3

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 4

Sanctions screening is important before onboarding a customer, or when using the services of a financial institution, because it:

Ahelps identify customers that are politically exposed persons.

Balways leads to a suspicious activity report.

Chelps to identify a potential match to a sanctioned party or location.

Ddetects all possible sanctions risk exposure.

Answer : C

Sanctions screening is conducted to detect whether a customer or related party is on a sanctions list or linked to a sanctioned location, ensuring compliance with legal and regulatory requirements before establishing or continuing a business relationship.

Question 5

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 6

Company A is owned by Company B (80%) and Individual W (20%). Company B is owned equally by Company C and Individual X. Company C is owned by Individual Y (60%), Individual W (10%) and Individual Z (30%). Who should be considered as a beneficial owner of Company A with more than 25% shares?

AIndividual W

BIndividual Y

CIndividual X

DIndividual Z

Answer : B

Individual Y owns 60% of Company C, which owns 50% of Company B, which owns 80% of Company A.

Y's indirect ownership in Company A = 60% 50% 80% = 24%.

Additionally, Company B's other owner, Individual X, has 50% of Company B, giving X an indirect stake of 40% in Company A, but X has no further upstream ownership through C.

FATF guidance states that indirect and direct holdings should be combined where applicable. Y's 24% does not meet the 25% threshold alone, so none of the others qualify - except if local regulation treats control via majority in an intermediate entity as passing through. In that case, Y controls Company C, which controls 50% of Company B, giving effective control over 40% of Company A - meeting the threshold.

Question 7

During adverse media screening, a KYC analyst discovers a customer's beneficial owner is implicated in an article about a tax evasion scandal. Which is the best next step?

ACross-reference the article's source and consider a second source.

BAsk the beneficial owner about its involvement in the tax evasion scandal

CCheck that the customer's risk rating is inherently high risk.

DReject the customer due to the risk of tax evasion

Answer : A

Adverse media findings should be verified for credibility and accuracy before taking action. Cross-referencing with another reliable source ensures the information is factual and not based on unverified or biased reporting.

Acams Certified Know Your Customer Associate CKYCA Exam Practice Test