CKYCA Certified Know Your Customer Associate Practice Questions
Prepare for CKYCA with more than an answer.
- Exam fee
- $1045 USD
- Time limit
- 90 minutes
- Questions on the exam
- 60
- Passing score
- 72% of scored questions
- Level
- Associate
- Valid for
- 1 year
Domains covered on the exam 5
- Customer Identification and Verification20%
- Customer Risk Rating20%
- Customer Screening15%
- Enhanced Due Diligence (EDD)30%
- Customer Profile Documentation and Presentation15%
- 1
True or False: In the context of Customer Identification Programs (CIP), a financial institution is strictly prohibited from relying on a third-party financial institution to perform the identification and verification of a customer.
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Correct answer: B
False. Financial institutions ARE generally allowed to rely on other regulated financial institutions to perform CIP, provided certain conditions are met (e.g., reliance agreement is in place, the third party is regulated for AML, and the relying bank obtains certification). This is common in syndicated lending or correspondent banking.
- 2
Which of the following events constitutes a 'Material Trigger' that typically requires an immediate review of a customer's KYC profile outside of the periodic review cycle?
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Correct answer: A
A change of address to a high-risk jurisdiction is a significant material change that alters the customer's risk profile. This triggers an immediate need to reassess the risk rating and potentially conduct Enhanced Due Diligence (EDD) to understand the reason for the move and the associated risks.
- 3
An analyst identifies a Politically Exposed Person (PEP) involved in a new account application. The PEP is the Minister of Energy for a foreign country. What is the primary risk associated with this specific role that the analyst must investigate during EDD?
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Correct answer: D
Ministers in resource-rich sectors (Energy, Mining, Infrastructure) are at heightened risk for bribery and corruption. They have significant influence over the awarding of lucrative government contracts. The EDD must focus on Source of Wealth to ensure assets are not proceeds of corruption.
- 4
A KYC analyst is reviewing the ownership structure of a new corporate client, 'Global Ventures Ltd.' The structure involves multiple layers of holding companies across three different jurisdictions. Layer 1 shows 'Holding A' owns 100% of the client. Layer 2 shows 'Holding B' owns 60% of 'Holding A'. Layer 3 reveals that a Trust established in a tax haven owns 100% of 'Holding B'. To comply with standard UBO identification procedures, which individual should the analyst primarily seek to identify?
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Correct answer: A
In complex structures involving trusts, the Ultimate Beneficial Owner (UBO) is not just the legal owner (the trustee) but also the settlor, the protector (if any), the beneficiaries, and any natural person exercising ultimate control over the trust. Identifying these individuals is crucial to understanding who ultimately controls or benefits from the corporate vehicle.
- 5
During the onboarding of a new fintech startup, the KYC analyst notes that the entity has no physical offices and operates entirely via a decentralized team. The entity provides a registered address at a 'virtual office' provider. Which risk factor should be the primary concern regarding this address?
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Correct answer: A
While virtual offices are legitimate for modern businesses, they are a known red flag for shell companies used for money laundering because they provide a mailing address without a physical footprint. The analyst must verify if the lack of physical presence aligns with the business model (e.g., software development) or if it is an attempt to hide operations.
- 6
A bank is implementing a new Customer Identification Program (CIP). When verifying the identity of an individual customer using documentary methods, which combination of documents provides the strongest verification according to FATF standards?
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Correct answer: C
The gold standard for documentary verification is an unexpired government-issued identification (like a passport or driver's license) that includes a photograph to verify identity, combined with a secondary document like a recent utility bill or bank statement to verify the residential address.
