Treasury Operations and Controls Flashcards
7 cards from real CTP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Treasury Operations and Controls flashcards as text
What is the primary operational risk associated with relying on a single treasury management system vendor?
Answer: Vendor concentration risk and potential service disruption if the vendor fails
Dependence on a single TMS vendor creates concentration risk; a vendor failure or outage can disrupt all treasury operations.
Which SWIFT messaging type is used for cross-border customer credit transfers between financial institutions?
Answer: MT103
MT103 is the standard SWIFT message for single customer credit transfers (cross-border wire payments).
In treasury operations, 'nostro account reconciliation' refers to reconciling which accounts?
Answer: A bank's accounts held at a correspondent bank in a foreign currency
Nostro accounts are a bank's accounts held at foreign correspondent banks, used to facilitate international transactions.
A company wants to ensure all treasury transactions are traceable from initiation to settlement. Which control framework element addresses this?
Answer: Audit trail and transaction logging
A comprehensive audit trail logs every transaction step, enabling full traceability for compliance and fraud investigation.
Under SOX Section 404, treasury departments at public companies must ensure their controls are:
Answer: Designed and operating effectively and documented for management assessment
SOX 404 requires management to assess and document the design and operating effectiveness of internal controls over financial reporting.
What is the main advantage of using electronic bank account management (eBAM) in treasury operations?
Answer: It automates the process of opening, modifying, and closing bank accounts with digital documentation
eBAM digitizes and automates bank account administration, reducing manual paperwork and processing time for account changes.
A treasury analyst discovers that the same employee can both create a vendor in the payment system and approve payments to that vendor. This represents:
Answer: A segregation of duties control deficiency
Allowing one employee to create vendors and approve payments creates a fraud risk and violates segregation of duties.