Banking Operations Audit Flashcards
7 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Banking Operations Audit flashcards as text
A bank auditor is reviewing controls over the bank's correspondent banking relationships. Which risk is UNIQUE to correspondent banking compared to retail banking?
Answer: Nested relationships that obscure the identity of underlying customers
Nested correspondent relationships allow respondent banks to provide services to sub-correspondents whose customers remain unknown to the U.S. bank.
When evaluating the adequacy of a bank's internal audit coverage for operations, the auditor-in-charge should PRIMARILY consider:
Answer: Risk-based audit frequency aligned with the risk rating of each operational area
A risk-based audit plan allocates coverage based on the inherent and residual risk level of each operational area, not fixed schedules.
An auditor reviewing the bank's wire transfer department finds that callbacks are only performed for wires exceeding $1 million. Wires between $100,000 and $999,999 are released without verbal confirmation. This policy gap MOST directly exposes the bank to:
Answer: Business email compromise (BEC) fraud losses
BEC fraud typically targets amounts just below high-value thresholds where callback controls are absent.
A bank auditor identifies that the operations division uses spreadsheets maintained by a single employee to calculate daily fee income. The BEST control recommendation is to:
Answer: Migrate fee calculations to a validated, system-based process with access controls
System-based calculations with access controls eliminate single-point-of-failure and manipulation risks inherent in end-user-maintained spreadsheets.
During an audit of the bank's remote deposit capture (RDC) program, an auditor should verify that customer agreements include provisions for:
Answer: Image quality standards, deposit limits, and duplicate detection responsibilities
RDC agreements must define image standards, customer deposit limits, and who bears responsibility for duplicate presentment issues.
Which of the following operational audit findings would MOST likely be escalated as a Matters Requiring Immediate Attention (MRIA) by a bank examiner?
Answer: Systematic failure to identify and report suspicious activity related to known fraud patterns
Systemic SAR filing failures represent a serious BSA compliance breakdown that examiners escalate as requiring immediate corrective action.
An auditor reviewing the bank's general ledger suspense account finds 847 items totaling $2.3 million that are more than 60 days old with no resolution documentation. The MOST appropriate audit response is to:
Answer: Expand testing to determine the nature of aged items and assess potential loss exposure
Aged suspense items with no documentation require expanded testing to determine whether they represent errors, fraud, or potential financial losses.