ADVANCED-CAMS-AUDIT practice question 8 of 15

As an auditor reviewing this investigation report, which indicates an effective process?

Answer options

A: The compliance officer concluded the investigation approximately 3 months later and filed a suspicious activity report.

B: The compliance officer concluded from the report that there are reasonable grounds for suspicion and filed a suspicious activity report. Correct answer

C: The compliance officer filed a suspicious activity report and omitted details regarding the reason it was filed.

D: The compliance officer decided not to cease the Business relationship hut kept the account under rigorous monitoring process.

Correct Answer:

B. The compliance officer concluded from the report that there are reasonable grounds for suspicion and filed a suspicious activity report.

Explanation

An effective investigation process requires the compliance officer to make evidence-based decisions. Option B demonstrates this by showing the officer reached a conclusion based on "reasonable grounds for suspicion" before filing the SAR. This indicates proper analysis of facts, documented rationale, and adherence to the risk-based approach fundamental to AML compliance. The decision shows clear linkage between investigation findings and regulatory action taken.

Why Incorrect

A. Three months is excessive for investigation completion, indicating inefficiency and potential regulatory criticism.
C. Omitting details in a SAR violates completeness requirements and hampers law enforcement effectiveness.
D. Not ceasing a suspicious relationship without filing a SAR suggests inadequate risk management response.

References

1. FATF (2012). "International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation," Recommendation 20, pp. 89-90. Available at: https://www.fatf-gafi.org/publications/fatfrecommendations/

2. Wolfsberg Group (2020). "Wolfsberg Statement on Developing an Effective AML/CTF Programme," Section 4.5: Investigation Standards, pp. 15-16.

3. Basel Committee on Banking Supervision (2017). "Sound management of risks related to money laundering and financing of terrorism," Paragraphs 58-61, pp. 19-20. BIS Publication.

4. ACAMS (2020). "Study Guide for the Certified Anti-Money Laundering Specialist Examination," 6th Edition, Chapter 3: Compliance Standards for AML/CTF, pp. 187-192.

5. Financial Action Task Force (2019). "Guidance on Risk-Based Supervision," Section 3.4: Supervisory Review of SAR Quality, pp. 28-30.

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