CTP Treasury Operations and Controls 4

Question 1

What is the primary operational risk associated with relying on a single treasury management system vendor?

Accepted Answer

Vendor concentration risk and potential service disruption if the vendor fails

Answer

Dependence on a single TMS vendor creates concentration risk; a vendor failure or outage can disrupt all treasury operations.

Question 2

Which SWIFT messaging type is used for cross-border customer credit transfers between financial institutions?

Accepted Answer

MT103

Answer

MT103 is the standard SWIFT message for single customer credit transfers (cross-border wire payments).

Question 3

In treasury operations, 'nostro account reconciliation' refers to reconciling which accounts?

Accepted Answer

A bank's accounts held at a correspondent bank in a foreign currency

Answer

Nostro accounts are a bank's accounts held at foreign correspondent banks, used to facilitate international transactions.

Question 4

A company wants to ensure all treasury transactions are traceable from initiation to settlement. Which control framework element addresses this?

Accepted Answer

Audit trail and transaction logging

Answer

A comprehensive audit trail logs every transaction step, enabling full traceability for compliance and fraud investigation.

Question 5

Under SOX Section 404, treasury departments at public companies must ensure their controls are:

Accepted Answer

Designed and operating effectively and documented for management assessment

Answer

SOX 404 requires management to assess and document the design and operating effectiveness of internal controls over financial reporting.

Certified Treasury Professional Exam Practice Test