Audit of Financial Risk Management
The models
(systems) developed for measuring financial risks need to verified on a regular
basis both from the point of view of compliance with regulatory methodology, correct
set up of the models and the calculations themselves. ARM offers this service in
addition to the capacities of internal
(or external) auditors.
Advanced Risk Management verifies
whether:
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the company complies with the methodology imposed by internal and/or regulatory guidelines, i.e. whether employees observe the given methodology or possibly whether the methodology is up to date
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performed calculations are in compliance with the methodology, i.e. whether results calculated by ARM according to the methodology correspond to results actually calculated by the employees of the company.
ARM's work culminates in a final report
including independent opinion on the methodology and comments and suggestions concerning all facts that are in reality
different from the prescribed methodology.
Advantages
of cooperation
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ARM operates as an independent authority. We always deliver an objective assessment of reality
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In case of discrepancy our recommendations contain specific suggestions how to improve the current situation. They are more than a dry description of reality
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We understand the problems. Therefore we can write the report where outputs are clear and unambiguous
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Our success is measured by the success of our clients
Company offers consulting services in the following areas:
Audit of the method of measuring and/or
managing risk:
credit, market, liquidity, insurance, operational and weather
Based on its long-term experience, ARM is capable of
providing an objective assessment of the correct set up of risk management
processes. In the case of financial institutions, regular validation of systems
or models is an integral part of regulatory requirements. In non-financial companies
they should also be a part of regular inspection performed by internal
auditors. ARM offers the following services:
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review/update of risk maps
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validation of models for measuring identified risks
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verification of the correctness of risk monitoring (up-to-date process setup, responsibilities)
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revision of reporting set-up
Audit of existence, consistency,
correctness and compliance with internal regulations
Many
companies concentrate their efforts on sales activities. That often leads to
capacity problems in terms of keeping "order" in the company.
Advanced Risk Management
offers its services to companies whose resources do not allow regular
verification of compliance of internal activities.
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we will verify the existence of documentation, its currency and compliance with activities performed on its basis
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we will verify not only formal compliance, but we will also validate models and calculations performed pursuant to documentation
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the output report is not only a pure statement of facts but contains comments and recommendations that need to be implemented to re-establish compliance with the documentation
Audit of the method of implementation of Basel II, Basel III a Solvency II
Advanced Risk Management
has long-term experience with the implementation of regulatory measures into
risk management systems in financial institutions. In the area of regulatory
implementation of Basel II, Basel III and Solvency II we offer the following
services:
Basel
II
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verification of the setup of market, credit and operational risk management according to the relevant legislation of regulatory
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validation of models for the calculation of capital requirement for credit/operational/market risk both from the point of view of methodological correctness as well as the technical performance of the calculation
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verification of the correctness of measuring credit, market and operational risk under Pillar II
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verification of the correctness of internal models under IRB approach a/or AMA approach
Solvency II
- validation of the calculation of solvency
- validation of the internal model
- validation of models for financial risk management
- validation of the calculation of the premium
- validation collateral valuation
- validation of the calculation of technical reserves
- validation of the valuation of financial assets
- validation principles of remuneration
Audit of assumptions, construction and
usage of internal model
Correctness of each mathematical model needs to be verified after some time from the following point of view:
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whether the assumptions on which the model was developed are still valid
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whether it was constructed correctly
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whether the model is used according to the setup rules