FRM Part I · FRM Exam Part I · Principles for Effective Data Aggregation and Risk Reporting
A risk reporting team is reviewing the quality of its reports under BCBS 239. Which of the following changes would best improve the 'clarity and usefulness' of its board-level reports?
Adding concise summaries, clear explanations and recommendations tailored to recipients best improves clarity and usefulness. BCBS 239 wants reports that are easy to understand yet support informed decisions, which raw tables, specialist jargon, or dropping forward-looking measures would undermine.
- AReplacing summary exposures with raw transaction-level tables to improve completeness
- BIncluding concise summaries, clear explanations of key findings, and recommendations for action, tailored to the needs of the recipientsCorrect
- CUsing internal technical terminology consistently so that only risk specialists can interpret the reports
- DRemoving forward-looking indicators because they are less reliable than historical figures
Explanation
Clarity and usefulness means reports communicate information in a clear, concise way that is easy to understand yet comprehensive enough for informed decisions, and includes recommendations and forward-looking assessments where appropriate. Raw tables and specialist jargon hinder board understanding, and removing forward-looking content reduces usefulness.
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