Role of the Risk Function

Therisk functionis responsible fordocumenting, monitoring, and overseeing risk policies and frameworks.

It ensures the organizationmaintains structured risk governance, reporting, and compliance.

Key Responsibilities

Developing Risk Management Manualsto definerisk appetite, risk frameworks, and risk governance structures.

Creating Risk Policiesthat align withregulatory standards and internal controls.

Why Answer B is Correct

The risk function primarilydevelops, implements, and maintains risk management frameworks, which include formalmanuals and policies.

Why Other Answers Are Incorrect

Option

Explanation

A. Documenting its activities, typically by operating and then recording the daily operation of controls.

Incorrect– The first line of defense (business units) handles daily operational controls, not the risk function.

C. Putting in place the servers, firewalls, and software to ensure cybersecurity.

Incorrect– Cybersecurity is anIT responsibility, while the risk functionoversees cyber risk frameworks.

D. Creating a trial balance, balance sheet statement, and cash flow statement.

Incorrect– These arefinancial accounting responsibilities, not risk management duties.

PRMIA Governance Framework for Risk Management

Basel Risk Management Principles

PRMIA References for Verification