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Risk management

Risk reporting

Risk reports now form part of UK annual reports.

8.1 Risk reporting

A risk reporting system would include:

 a systematic review of the risk forecast (at least annually)

 a review of the risk strategy and responses to significant risks

 a monitoring and feedback loop on action taken and assessments of significant
risks

 a system indicating material change to business circumstances, to provide an
‘early warning’

 the incorporation of audit work as part of the monitoring and information
gathering process.

8.2 Gross and net risk

Risk reports would show:

 Gross risk Assessment of risk before the application of any
controls, transfer or management responses

 Net (residual) risk Assessment of risk, taking into account the controls,
transfer and management responses

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