ACAMS Updated CAMS Exam Questions and Answers by wilbur

The CAMS 6th Edition highlights that a risk-based approach enables organizations to efficiently allocate compliance resources, focusing efforts on areas presenting the highest risk, thereby ensuring both regulatory compliance and operational effectiveness.

“A risk-based approach allows firms to concentrate resources and controls where the risk of ML/TF is highest, while applying simplified measures to lower-risk areas. This enhances both effectiveness and efficiency.”

(CAMS 6th Edition, AML Compliance Program: Risk-Based Approach)

Incorrect Options:

A: Cost savings may occur, but it is not the main advantage.

B: Audits may still be required, just less frequently for low-risk customers.

D: Risk-based approaches are tailored, not standardized, across regions.

Money launderers preferlarge-denomination billsbecause theyfacilitate bulk cash smuggling and placement.

Option A (Correct):Increased demand for large-denomination banknotesis a knownmoney laundering red flag.

Option B (Incorrect):Increased digital service adoption isnormal banking behavior.

Option C (Incorrect):Faster settlement times may reflecttechnology upgrades, not financial crime.

Option D (Incorrect):Maintaining a log of monetary instruments isa compliance best practice, not a red flag.

AML controls should bemeasured for effectivenessusingquantifiable metrics.

Option D (Correct):Thetrue positive/false positive ratioassesses theefficiencyof AML detection.

Option A (Incorrect):Thenumber of alerts alonedoes not measureeffectiveness, as many could befalse positives.

Option B (Incorrect):Client exitsdo not indicate whether an AML program isworking properly.

Option C (Incorrect):High-risk customer onboardingmust bemonitored, but it does not indicate AML effectiveness.

Accountants can be involved in money laundering schemes in various ways, either knowingly or unknowingly. Some of the common methods that accountants can use to launder money are:

Overstating income to hide excess cash: This method involves inflating the revenues or profits of a business to conceal the origin of illicit funds. For example, an accountant can create fake invoices or receipts to justify the deposit of cash from illegal sources into the business account. This can make the cash appear as legitimate income from the business operations.

Acting as a conduit for transferring cash between accounts: This method involves using the accountant’s own account or a third-party account to move funds around and obscure the audit trail. For example, an accountant can receive cash from a client and deposit it into their own account, then transfer it to another account or withdraw it in a different location. This can make it difficult to trace the source and destination of the funds.

Acting as a designee for someone who wishes to hide their identity: This method involves using the accountant’s name or credentials to open accounts or conduct transactions on behalf of a client who wants to remain anonymous. For example, an accountant can act as a nominee director or shareholder for a shell company that is used to launder money. This can make it appear as if the accountant is the owner or beneficiary of the funds, while the actual owner or beneficiary is hidden.

Money Laundering: What It Is and How to Prevent It - Investopedia, The Process of Laundering Money

Revealed: accountants aiding money laundering - Accountancy Age, Accountants’ methods

Accountants in the anti-money laundering front line, Accountants’ obligations

https://www.ojp.gov/pdffiles1/Digitization/119840NCJRS.pdf