FRM Part II · FRM Exam Part II · Risk Reporting
A bank's risk reports rely heavily on manual reconciliations and end-user spreadsheets to aggregate credit exposures. Which control is most consistent with BCBS 239 expectations for accuracy and integrity of the aggregated data?
The best control is to minimize manual processes and, where they remain, apply documented controls and reconciliations to source data. BCBS 239 treats manual aggregation as an error risk. Plausibility review, less frequent reporting and business-line-specific definitions do not secure accuracy and integrity.
- ARely on senior managers to review the final report for plausibility only
- BReduce the frequency of reporting to limit the number of manual errors
- CMinimize manual processes, and where they remain, apply documented controls and reconciliation to source systems comparable to other dataCorrect
- DAllow each business line to define its own exposure measure to improve ownership
Explanation
BCBS 239 expects aggregation to be as automated as practicable to reduce error risk, and where manual processes remain they should be adequately controlled and documented, with reconciliation to sources. Plausibility review alone is insufficient, reduced frequency harms timeliness, and differing definitions harm consistency.
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