ACAMS Elements of an AML Program 2

Question 1

What are the 'five pillars' of an effective BSA/AML compliance program under U.S. federal requirements?

Accepted Answer

Internal controls, a designated compliance officer, employee training, independent testing, and customer due diligence

Answer

Policies, procedures, internal controls, risk assessment, and training

Answer

SAR filing, CTR filing, record retention, risk assessment, and OFAC screening

Answer

Board oversight, senior management accountability, technology systems, legal review, and regulatory liaison

Question 2

What is the role of the 'board of directors' in overseeing the BSA/AML compliance program?

Accepted Answer

The board approves the AML program and policies, receives regular reports on AML program performance, and is ultimately accountable for ensuring the institution maintains effective AML controls

Answer

The board has no AML responsibility — that rests entirely with the compliance officer

Answer

The board's only role is to approve the AML budget annually

Answer

The board only becomes involved when a regulatory enforcement action is initiated

Question 3

What is 'enterprise-wide AML risk management' and how does it differ from a siloed approach?

Accepted Answer

An integrated approach where AML risk identification, assessment, and controls are consistent and coordinated across all business units, geographies, and product lines, rather than managed independently by each unit

Answer

It means only the largest business units have AML programs

Answer

It means all AML decisions are centralized in a single location regardless of business geography

Answer

Enterprise-wide AML means applying only the strictest jurisdiction's rules globally

Question 4

What is the purpose of AML 'policies and procedures' and how should they be maintained?

Accepted Answer

Policies establish the institution's high-level AML framework and risk appetite, while procedures provide specific, actionable guidance for implementing the policies; both must be regularly reviewed and updated to reflect regulatory changes and lessons learned

Answer

Policies are for external reporting only; procedures are for internal staff reference

Answer

Policies are set by regulators and cannot be customized; procedures are entirely flexible

Answer

AML policies only need to be updated when a new BSA regulation takes effect

Question 5

What should an effective AML training program include to meet regulatory expectations?

Accepted Answer

Risk-based training tailored to employees' roles and responsibilities, covering relevant AML regulations, red flags specific to their business line, SAR filing obligations, and training on current typologies and schemes

Answer

A single annual training module covering all BSA topics for all employees

Answer

Training only for new hires during their onboarding process

Answer

AML training only for employees in the compliance department

Question 6

What is the purpose of 'independent testing' (AML audit) and what are the key attributes of an effective AML audit?

Accepted Answer

An objective evaluation conducted by individuals independent of the AML function that assesses the adequacy and effectiveness of the AML program and its compliance with BSA requirements

Answer

The AML compliance team audits itself to identify self-improvement opportunities

Answer

A review of individual SAR filing decisions conducted by the BSA Officer

Answer

An annual IT security audit of the transaction monitoring system