Who meets the standard to perform the AML audit? (Select Two.)
Correct Answer: B,D
B: An internal auditor with the requisite knowledge and expertise of AML: An internal auditor with sufficient knowledge and expertise in AML regulations and compliance requirements can perform the AML audit. D: Qualified bank staff if not involved in the AML function being tested: Qualified bank staff who are not involved in the AML function being audited can perform the AML audit.
Question 102
What is a criterion for FATF membership?
Correct Answer: A
Question 103
Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking? Choose 3 answers.
Correct Answer: B,C,D
Question 104
According to Basel Committee on Banking Supervision guidelines, which of the following statements best describes the relationship between the internal audit function and compliance?
Correct Answer: A
According to the Basel Committee on Banking Supervision guidelines, the internal audit function should evaluate the adequacy and effectiveness of the bank's compliance function and its compliance risk management framework1. This includes assessing the compliance risk inherent in the bank's activities, products, services, and systems, as well as the compliance policies, procedures, controls, and reporting mechanisms2. The internal audit function should also review the transactions and records of the bank to ensure compliance with applicable laws, regulations, and internal standards3. The other statements are incorrect because: B: An internal audit program of adequacy of the bank's compliance function should be established, but should not include review of transactions. This statement is false because the internal audit function should review the transactions and records of the bank to ensure compliance, as mentioned above3. C: The compliance function and internal audit function should be combined. This statement is false because the compliance function and the internal audit function should be separate and independent from each other, to avoid conflicts of interest and ensure objectivity and credibility. D: The auditors should not discuss internal audit findings with compliance management to maintain independence. This statement is false because the internal audit function should communicate and coordinate with the compliance function on a regular basis, to share information, insights, and recommendations, and to avoid duplication of work. However, the internal audit function should maintain its independence and report directly to the board of directors or the audit committee. References: 1: The internal audit function in banks, Principle 10, p. 9 2: The internal audit function in banks, Principle 10, p. 10 3: The internal audit function in banks, Principle 10, p. 11 4: The internal audit function in banks, Principle 2, p. 4 5: The internal audit function in banks, Principle 10, p. 11
Question 105
Which of the following are the most suspicious transaction indicators related to casino activities? 1. A client requests a winnings check (cheque) in a third party's name. 2. Acquaintances bet against each other in even-money games and it appears they are intentionally losing to one of the parties. 3. A new client who is a large volume player asks the casino operator about the ability to transfer the funds to other locations in the same country. 4. A client requests the transfer of winnings to the bank account of a third party in a country without an effective anti-money laundering regime.
