A small but very successful construction company is expanding rapidly Having quickly gone from just a few employees to a larger staff the company's managers have become concerned about the possibility for internalTheftand fraud, and are implementing compliance measures.
The company promotes one of its current HR employees to be the new head of compliance It institutes a new whistleblower policy in which all employees are required to report suspicious behavior or transactions directly to their immediate supervisor who will escalate as necessary.
The company also institutes a gifts and entertainment policy that restricts promotional expenses for the company's sales staff and any managersthatinteract with clients and vendors Finally the company starts a selective review process for all invoices above a certain threshold subjecting them to senior management review.
Based on this scenario which is the MOST significant weakness in the company's efforts to detect and prevent internal financial crime?

• A. The promotion of a current employee as head of compliance - Compliance officers should always be hired externally to minimize the chances of internal fraud
• B. The gifts and entertainment policy - The policy is not comprehensive enough and should include all company employees not only sales staff and management
• C. Thewhistleblowerpolicy - Reporting should never go through the company's business lines it should lake place anonymously
• D. The Policy ofinvoice review - All invoices should be subject to senior management approval not only those above a certain level

James Thieferlon has stolen Linda Victim's ATM card and PIN James withdrew a total of $10,000 from Linda's checking account over several transactions using several ATM machines James then created lake invoices on hisbrother'scompany stationary to make it appear as though he provided S15,000 of IT goods for his brother's import/export company. From there, he presented the invoices to his bank and deposited the stolen S10,000 with the legitimate S5,000 he made from selling personal goods on the Internet.
Which step could be considered money laundering?

• A. Not openly declaring the $5,000 as Interne! sales revenue to be able to claim different taxes on them
• B. Smurfing committed by withdrawing the stolen $10,000 from several ATMs in small values
• C. Depositing the money into his own bank account with the legitimate $5,000
• D. Creating false invoices for his brother's import/export company

Ms. Johnson, the compliance officer at DEF Credit Union, is conducting a risk assessment of the credit union's mobile banking services. Which of the following factors should Ms. Johnson consider when assessing the risks associated with mobile banking?

• A. The credit union's annual revenue.
• B. The level of encryption used in the mobile banking app.
• C. The number of branches operated by DEF Credit Union.
• D. The age demographics of credit union members.

Person A has a savings account with Bank X. Five years later Person A was appointed chief minister of infrastructure lor Country Y a high-risk jurisdiction.

• A. Initiate an audit of the original source of funds in Person A's account
• B. Restrict activity in Person A's account since he is now a political figure in a high-risk country
• C. Establish permanent and improved monitoring of Person A's savings account
• D. Because Country Y is a high-risk jurisdiction immediately file a SAR/STR

Bank A receives a wire transfer Irom Bank B located in another country. When run through Bank A's sanctions screening process, some of the identifying information of the entity initialing the transfer appears as a partial match with an entity on a sanctions list Bank A routinely processes wire transfers from Bank B and almost never runs into matches with sanctions lists.
Which further review should Bank A conduct on the wire transfer?

• A. Bank A should contact Bank B lor confirmation that the entity is not on the sanctions list Once it receives written confirmation from Bank B's compliance staff it can complete the transfer without further investigation
• B. No review is required Bank B would already have conducted due diligence for sanctions violations and further action would be duplicative and unnecessary
• C. Bank A should reject the wire transfer and alert the regulatory or enforcement agency that administers the sanction immediately
• D. Bank A should not complete the wire transfer until it gathers more information It should consult the full identifying information in the sanctions entry and attempt to find that information in the transfer