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
Which type of treasury fraud scheme involves an employee creating fictitious vendors to divert company payments?
Answer: Accounts payable fraud via ghost vendors
Ghost vendor fraud involves creating fictitious suppliers in payment systems to redirect company funds to a fraudster's accounts.
What is the purpose of a 'treasury center of excellence' (COE) model?
Answer: To concentrate treasury expertise, standardize processes, and improve efficiency across the organization
A treasury COE centralizes specialized knowledge and best practices to drive consistency and efficiency across treasury functions.
When implementing a payment factory, the PRIMARY operational benefit is:
Answer: Centralized processing of payments across multiple entities, reducing costs and improving control
A payment factory centralizes all outgoing payments from multiple subsidiaries, standardizing processes and reducing bank fees.
A company experiences a system outage in its TMS during a critical payment window. Which element of a treasury business continuity plan addresses this scenario?
Answer: Manual backup procedures and alternate payment channels
Business continuity plans include manual backup procedures and alternate payment channels to ensure operations during system outages.
What does 'value dating' refer to in international treasury operations?
Answer: The date funds are actually credited or debited and become available for use
Value date is the date on which funds are credited or debited and actually available, which may differ from the transaction date.
Which approach BEST describes 'target balancing' in a notional pooling structure?
Answer: Setting a minimum required balance in each account and sweeping excess to a master account
Target balancing sweeps only the amount above a predetermined target balance, maintaining a minimum operational reserve in each account.
In treasury operations, a 'settlement risk' mitigation strategy for FX transactions is BEST achieved through:
Answer: Using CLS (Continuous Linked Settlement) to synchronize payment and receipt in FX transactions
CLS eliminates Herstatt risk by simultaneously settling both legs of FX transactions, ensuring payment-versus-payment finality.