CTP Treasury Operations and Controls 2

Question 1

Which internal control technique requires two separate individuals to authorize and execute a treasury transaction?

Accepted Answer

Dual control

Answer

Dual control requires two individuals to jointly authorize a single transaction, preventing unilateral fraud.

Question 2

A treasury management system (TMS) automates which of the following to reduce manual errors in cash management?

Accepted Answer

Bank account reconciliation and cash positioning

Answer

A TMS automates bank reconciliation, cash positioning, and forecasting to reduce manual errors.

Question 3

What is the primary purpose of a treasury policy statement?

Accepted Answer

To establish guidelines and limits for managing financial risks and operations

Answer

A treasury policy statement documents authorized instruments, risk limits, and procedures governing treasury activities.

Question 4

Which control best prevents a treasury employee from both initiating a wire transfer and approving it?

Accepted Answer

Segregation of duties

Answer

Segregation of duties assigns initiation and approval of transactions to different employees, reducing fraud risk.

Question 5

A company's treasury department identifies a $50,000 discrepancy during daily bank reconciliation. What is the FIRST step?

Accepted Answer

Investigate and identify the source of the difference

Answer

The first step is always to identify the root cause before taking corrective action.

Certified Treasury Professional Exam Practice Test