Latest Success Metrics For Actual CKYCA Exam (Updated 132 Questions)
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NEW QUESTION # 17
If the legal structure is overly complex.
What step should the analyst do when conducting Customer Due Diligence in identifying the beneficial owners?
- A. Tread carefully, particularly if they operate in jurisdictions with secrecy la
- B. Escalate, A complex legal structure is a sign of hiding the beneficial owner.
- C. Continue, Most legal structures can be overly complex in a normal business setting.
Answer: A
NEW QUESTION # 18
Control activities in financial crime prevention include? (SELECT 3)
- A. Incorrect Controls
- B. Detective Controls.
- C. Preventative Controls.
- D. Premeditated Controls
- E. Corrective controls.
Answer: E
NEW QUESTION # 19
What is the purpose of having controls to Know Your Customer, also known as KYC?
- A. Manage the financial crime risk to your customer.
- B. Manage the compliance risk of your customer.
- C. Manage the financial crime risk to your organization.
- D. Manage the compliance risk of your organization.
Answer: C
NEW QUESTION # 20
KYC does not end after on-boarding a customer. (TRUE OR FALSE)
- A. True.
- B. False.
Answer: A
NEW QUESTION # 21
An Ultimate Beneficial Owner (UBO) with a control prong is an individual with:
- A. direct ownership greater than a certain percent value.
- B. indirect ownership greater than a certain percent value.
- C. direct and indirect ownership less than a certain percent value who exercises management and operational control.
- D. direct and indirect ownership greater than a certain percent value but who lacks management and operational control.
Answer: C
Explanation:
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.
NEW QUESTION # 22
A transaction monitoring alert is generated by an automated system. The alert was triggered by a scenario to flag large cash payments. The analyst is not able to explain the behavior that triggered the alert. Which step should a KYC analyst take next?
- A. Mark the alert as a false positive.
- B. Submit a suspicious transaction report.
- C. Block the account to prevent any other transactions.
- D. Escalate the alert to the second line for investigation.
Answer: D
Explanation:
When an analyst cannot reasonably explain activity flagged by transaction monitoring, the correct step is to escalate the case to the second line of defense (compliance or investigations team) for further review before any reporting or account action is taken.
NEW QUESTION # 23
Once a banking KYC analyst applies CDD onboarding procedures and builds a customer risk profile, ongoing monitoring needs to be implemented for the primary purpose of:
- A. identifying and reporting suspicious transactions.
- B. fulfilling senior management's obligations.
- C. complying with bank's internal policies and procedures.
- D. understanding the nature and purpose of the customer relationship.
Answer: A
Explanation:
The primary purpose of ongoing monitoring after CDD is to detect unusual or suspicious activity that may indicate money laundering, terrorism financing, or other illicit behavior, so it can be reported promptly to the relevant authorities.
NEW QUESTION # 24
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?
- A. Obtain legal documents from the client corroborating its current ownership structure.
- B. Do not change the ownership information in the profile until it is updated in the public registry.
- C. Put the KYC refresh on hold and wait for the public sources to be updated.
- D. Follow the reputable financial news source and update the client's profile.
Answer: A
Explanation:
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.
NEW QUESTION # 25
According to the Financial Action Task Force (FATF) Risk-Based Approach Guidance, institutions should
- A. incorporate only higher risk customers into its risk profile.
- B. adjust the extent and depth of EDD monitoring in line with their risk profile.
- C. adjust customers' EDD processes independent from the institution's risk profile.
- D. incorporate customer risks into the business line risk profiles, but not into the institutional risk profile
Answer: B
Explanation:
FATF's Risk-Based Approach Guidance advises that the scope and intensity of Enhanced Due Diligence (EDD) should be proportionate to the institution's overall risk profile, ensuring resources are directed where risks are greatest.
NEW QUESTION # 26
What is the Primary legislation for Money Laundering in the United States?
- A. Money Laundering Control Act of 1986
- B. Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act)
- C. Bank Secrecy Act (1970)
- D. Money Laundering and Financial Crimes Strategy Act (1998)
- E. Anti-Drug Abuse Act of 1988
Answer: C
NEW QUESTION # 27
The four step model is a model designed to?
- A. Improve the quality of your KYC Program.
- B. Improve the quality of your KYC Research.
- C. Improve the quality of the KYC Rule.
- D. Improve the quality of your KYC Files.
Answer: B
NEW QUESTION # 28
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?
- A. Ask the beneficial owner about its involvement in the tax evasion scandal
- B. Cross-reference the article's source and consider a second source.
- C. Reject the customer due to the risk of tax evasion
- D. Check that the customer's risk rating is inherently high risk.
Answer: B
Explanation:
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.
NEW QUESTION # 29
Which describes the best method for creating a thorough audit trail to prove compliance?
- A. Storing transcripts in the customer's profile of dialogues that take place during onboarding
- B. Documenting pictures of the customer holding the identification stored in the customer profile
- C. Notations within the customer profile that the identity was checked
- D. Incorporating copies of documentation and written communication in the customer profile
Answer: D
Explanation:
A thorough audit trail requires keeping complete, verifiable records, including copies of identification documents and all written communications, so that compliance checks can be evidenced to regulators or auditors.
NEW QUESTION # 30
Trade finance, which is the provision or credit for domestic and international trade transactions is likely?
- A. Usually a Low Risk Product.
- B. Usually a High Risk Product
- C. Usually a Medium Risk Produce.
- D. It depends on the Anti-Money Laundering program.
Answer: B
NEW QUESTION # 31
What is an example of secondary identification in a customers CIP program? (SELECT 3)
- A. Identification from securities and exchange commission. (SEC)
- B. Identification from another financial institution.
- C. Identification from a college.
- D. Identification from a utility company.
- E. Identification from a registry of secretary of state.
Answer: B,C,D
NEW QUESTION # 32
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