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FRM Part II · FRM Exam Part II · Case Study: Financial Crime and Fraud

A bank's anonymous whistleblowing hotline receives few reports, and a staff survey shows employees fear retaliation. Which action would best strengthen this detective control?

The best action is a documented non-retaliation policy with independent oversight, such as by the audit committee. Employees fear retaliation, so protection and independent handling build trust. Routing reports through line managers or restricting access would worsen the problem and reduce detection.

  1. AAdopt a documented non-retaliation policy with independent oversight of reports by the audit committeeCorrect
  2. BRoute all reports through the employee's direct line manager for faster resolution
  3. COffer the hotline only to senior managers
  4. DReplace the hotline with an annual staff code-of-conduct acknowledgement

Explanation

Fear of retaliation is the barrier, so protecting reporters and ensuring independent handling, such as audit committee oversight, builds trust. Routing reports through line managers adds the very conflict employees fear. Limiting access reduces coverage, and an annual acknowledgement is not a reporting channel.

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