ACAMS AML/CFT Risk Assessment 2

Question 1

In the FATF risk-based approach, what are the three primary risk categories that institutions must assess?

Accepted Answer

Country/geographic risk, customer risk, and product/service/transaction risk

Answer

Credit risk, market risk, and operational risk

Answer

Regulatory risk, reputational risk, and legal risk

Answer

Inherent risk, residual risk, and control risk

Question 2

Which document provides the most authoritative assessment of a country's AML/CFT regime for use in geographic risk assessments?

Accepted Answer

FATF Mutual Evaluation Reports (MERs)

Answer

The World Bank Doing Business report

Answer

The Transparency International Corruption Perceptions Index

Answer

The CIA World Factbook

Question 3

What is 'residual risk' in the context of an AML risk assessment?

Accepted Answer

The risk that remains after applying AML controls

Answer

The risk before any mitigating controls are applied

Answer

The risk associated with residual cash in ATMs

Answer

The aggregate risk across all business lines

Question 4

Which of the following customer types typically carries the HIGHEST inherent AML risk?

Accepted Answer

A non-resident alien operating a cash-intensive business with no explained source of wealth

Answer

A salaried government employee opening a savings account

Answer

A domestic retail customer with direct deposit payroll

Answer

A publicly traded company with audited financials

Question 5

In a risk-based approach, when is Enhanced Due Diligence (EDD) required?

Accepted Answer

For customers identified as high-risk, such as PEPs, correspondent banks, or those from high-risk jurisdictions

Answer

For every new customer regardless of risk

Answer

Only when a SAR has previously been filed on the account

Answer

Whenever a customer's transaction exceeds $5,000

Question 6

What is the purpose of a 'risk appetite statement' in an institution's AML program?

Accepted Answer

To define the level and type of AML/CFT risk the institution is willing to accept in pursuing its business objectives

Answer

To document the types of food vendors approved for staff cafeterias

Answer

To set minimum transaction monitoring thresholds for all accounts

Answer

To establish the budget allocated to the compliance department