RCMS Risk Assessment & Internal Controls 5

Question 1

A compliance officer is asked to evaluate a new product line that may involve BSA/AML obligations not currently covered by existing controls. What is the FIRST step in this process?

Accepted Answer

Conduct a risk assessment specific to the new product's BSA/AML exposure

Answer

Before designing or updating controls, a targeted risk assessment must identify the specific BSA/AML risks introduced by the new product line.

Question 2

Which control activity is specifically designed to verify that transactions are accurately captured and completely processed without loss or duplication?

Accepted Answer

Reconciliation controls

Answer

Reconciliation controls compare two independent sources of data to confirm that all transactions are recorded completely and accurately.

Question 3

An organization rates a compliance risk as 'accepted' despite it exceeding its stated risk tolerance. Which governance failure does this indicate?

Accepted Answer

Misalignment between risk appetite policy and actual risk decisions

Answer

Accepting a risk that exceeds stated tolerance without formal exception approval indicates a breakdown between the organization's documented policy and actual management behavior.

Question 4

Which scenario BEST illustrates an inherent risk that has been partially mitigated to produce a residual risk?

Accepted Answer

A bank identifies high fraud potential in wire transfers and installs transaction limits, reducing but not eliminating exposure

Answer

Installing transaction limits reduces the inherent fraud risk in wire transfers but does not eliminate it, leaving a residual risk the bank must still manage.

Question 5

A compliance testing program reveals that 15% of loan files are missing required disclosures. Which type of risk does this finding primarily represent?

Accepted Answer

Operational and compliance risk

Answer

Missing required disclosures in loan files represent a failure in operational processes and create direct compliance risk under consumer protection regulations.

(RCMS) Registered Compliance Management Specialist Certification Practice Test

(RCMS) Registered Compliance Management Specialist Certification Practice Test

RCMS Risk Assessment & Internal Controls 5