FRM Part II · FRM Exam Part II · Risk Reporting
A bank's second-line risk team reviews its operational risk reports annually. Which review activity best demonstrates that the reports remain fit for purpose?
A good review asks users whether reports support their decisions, validates the accuracy and timeliness of the underlying data, and updates content for emerging risks and regulatory changes. Layout consistency, page count or open rates do not show that the reports are fit for purpose.
- AConfirming that the report layout has not changed since last year
- BChecking that the number of pages has decreased
- CAssessing with users whether reports support decisions, verifying data accuracy and timeliness, and updating content for new risks and regulatory changesCorrect
- DCounting how many recipients opened the report
Explanation
A meaningful review tests usefulness to decision makers, data quality and timeliness, and coverage of emerging risks and regulation. Layout consistency, page count and open counts say nothing about whether the content is accurate or useful.
Did you get it right without looking?
One question tells you little. A timed set on Risk Reporting shows your real accuracy, how long you take and where you lose marks.
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