An investment risk oversight function provides independent, monitoring of investment risks, ensuring portfolio alignment with objectives and risk appetites. This class will first study the differences and key responsibilities between two critical Investment Risk Management and Oversight Responsibilities:

• Risk Management (First Line): Daily management of investment risks, including identifying, measuring, controlling risks and intra-department reporting of the risk.
• Risk Oversight (Second/Third Line): Independent oversight of the investment risk management function --- focusing on the framework's effectiveness and ensuring that management of the significant investment risks is appropriate and in alignment with the company’s expectations.

Before Internal Audit can begin to review the Risk Oversight function, they need to understand such areas as:

• What is the segregation of responsibilities between the two divisions.
• How does the risk oversight responsibilities differ in source, calculation, criticality and reporting.
• What limits are managed internally by the investment staff and what limits are managed independently.