FRM7 - Principles for Effective Data Aggregation and Risk Reporting

Question 1

Explain the potential benefits of having effective risk data aggregation and reporting

Answer 1

• high-quality data at all levels of the organisation
• enhances tactical and strategic decision making process
• clean data means processing lots into valuable information
• validation requires rigorous assessment of data for models, easier if kept well

Question 2

Explain the challenges to the implementation of a strong risk data aggregation and reporting process and the potential impacts of using poor quality data

Answer 2

Flawed data led to financial crisis

Data process have to be implemented at department level consistently and flow through which can be challenging

Question 3

Describe key governance principles related to risk data aggregation and risk reporting

Answer 3

• governance
• data architecture and it infrastructure
• accuracy and integrity
• completeness
• timeliness
• adaptability
• accuracy
• comprehensive
• clarity etc

Question 4

Describe characteristics of effective data architecture, IT infrastructure, and risk reporting practices

Answer 4

Roles should be defined including responsibilities. Optimal approach ensures all people and systems within the firm are using dame data, models and assumptions.