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
When auditing a bank's foreign currency exchange operations, the auditor should PRIMARILY focus on whether:
Answer: Positions are marked to market daily and exposure limits are monitored
Daily mark-to-market and adherence to position limits are the key controls for managing foreign exchange risk in trading operations.
An auditor reviewing the bank's check processing operations should be MOST concerned if:
Answer: Image capture occurs before proof balancing is complete
Capturing check images before balancing undermines the proof process and can allow errors or fraud to go undetected.
Under the Bank Secrecy Act, a Currency Transaction Report (CTR) must be filed for cash transactions exceeding:
Answer: $10,000 in a single day
The BSA requires a CTR for any cash transaction or series of related transactions exceeding $10,000 in a single business day.
A bank auditor finds that the operations center processes end-of-day batch jobs without a documented run book or operator instructions. The PRIMARY concern is:
Answer: Inability to recover consistently from processing errors or abends
Without documented run books, operators cannot consistently restart or recover failed jobs, creating operational continuity risk.
Which of the following best describes 'structured transactions' (structuring) as it relates to BSA compliance audits?
Answer: Breaking large cash transactions into smaller amounts to evade CTR reporting
Structuring is the illegal practice of breaking transactions into amounts below $10,000 specifically to avoid Currency Transaction Report filing.
During an audit of loan operations, an auditor finds that paid-off loans are not released from collateral within the bank's 30-day policy. The MOST significant risk is:
Answer: Customer complaints and potential legal liability
Failing to timely release liens on paid-off collateral exposes the bank to customer lawsuits and reputational harm.
An auditor testing the bank's official check (cashier's check) issuance process finds that voided checks are not retained or defaced. This represents a weakness in controls over:
Answer: Check stock custody and destruction procedures
Voided official check stock must be defaced and retained to prevent fraudulent re-use of pre-printed check documents.