FRM Part II · FRM Exam Part II · Risk Reporting
A bank's board wants assurance that risk data aggregation is reliable. Which governance arrangement best reflects sound practice for risk data and reporting?
The best arrangement is board and senior management ownership of risk data governance, with clearly assigned data owners and independent validation of the framework. IT-only responsibility, unit-specific standards or reactive reviews do not give consistent accountability or credible assurance over aggregated risk data.
- AData quality is the sole responsibility of the IT department, which certifies reports before release
- BSenior management and the board own risk data governance, with defined data owners, and the arrangement is independently validatedCorrect
- CEach business unit defines its own risk data standards to preserve local flexibility
- DData governance is reviewed only when regulators raise a finding
Explanation
Sound practice places responsibility for risk data governance with the board and senior management, assigns clear ownership of data, and subjects the framework to independent validation. Leaving it to IT alone, to individual units with differing standards, or to reactive review fails to give consistent, accountable control. Independent validation gives the board real assurance.
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