#1
Which of the following is a key objective of financial compliance?
Ensuring adherence to regulations
ExplanationFinancial compliance aims to ensure adherence to regulations.
#2
What is the primary goal of anti-money laundering (AML) regulations?
Preventing the illegal acquisition of assets
ExplanationAML regulations primarily aim to prevent the illegal acquisition of assets.
#3
Which of the following is NOT considered a typical money laundering stage?
Detection
ExplanationDetection is not a typical stage in money laundering; it's about avoiding detection.
#4
What does the 'Know Your Customer' (KYC) principle aim to achieve?
To verify the identity of clients
ExplanationThe KYC principle aims to verify the identity of clients.
#5
What is the term used to describe the process of concealing the origins of illegally obtained money?
Money laundering
ExplanationMoney laundering is the process of concealing the origins of illegally obtained money.
#6
Which of the following activities is a common red flag for potential money laundering?
Frequent large cash deposits and withdrawals
ExplanationFrequent large cash deposits and withdrawals are common red flags for potential money laundering.
#7
Which of the following is an example of a politically exposed person (PEP)?
A government official
ExplanationA politically exposed person (PEP) is typically a government official.
#8
Which of the following is a characteristic of a Ponzi scheme?
Investor funds used to pay returns to earlier investors
ExplanationA Ponzi scheme involves using investor funds to pay returns to earlier investors.
#9
Which international organization plays a significant role in setting standards for AML and CFT?
Financial Action Task Force (FATF)
ExplanationFATF plays a significant role in setting international standards for AML and CFT.
#10
What is the role of a compliance officer in financial institutions regarding anti-money laundering (AML) measures?
To ensure adherence to AML regulations
ExplanationA compliance officer ensures adherence to AML regulations within financial institutions.
#11
What is the primary purpose of suspicious activity reporting (SAR) in the context of AML compliance?
To provide evidence for prosecution
ExplanationSAR's primary purpose in AML compliance is to provide evidence for prosecution.
#12
Which of the following is NOT a typical responsibility of a compliance officer in a financial institution?
Conducting financial transactions
ExplanationConducting financial transactions is not a typical responsibility of a compliance officer.
#13
Which of the following is an example of a beneficial owner?
A company's shareholder
ExplanationA beneficial owner can be a company's shareholder.
#14
What does the term 'smurfing' refer to in the context of money laundering?
Breaking down large transactions into smaller ones to avoid detection
ExplanationSmurfing in money laundering refers to breaking down large transactions into smaller ones to avoid detection.