FRM Part II · FRM Exam Part II · Risk Reporting
An operational risk manager wants to confirm that the quarterly risk report to senior management is timely and reliable. Which control best supports this objective?
The best control is a defined production timetable with data ownership, reconciliation of source data to the ledger and incident database, and sign-off before distribution. This secures both accuracy and timeliness, whereas post-issue changes, judgment-only reports or indefinite delays weaken one or both.
- AAllow each business line to adjust its own figures after the report is issued
- BDefine data ownership and reconciliation of source data to the general ledger and incident database, with a set production timetable and sign-off before distributionCorrect
- CBase the report only on the manager's judgment without systematic data
- DDelay release until all business lines have no outstanding data issues, regardless of the timetable
Explanation
Reliability needs clear data ownership, reconciliation and sign-off, while timeliness needs a fixed production schedule. Post-issue adjustment undermines integrity, judgment-only reports lack support, and waiting for perfect data makes the report late.
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