MCCU Annual Report - page 92

92
32. Financial Instruments and Financial Instruments Risk Management (cont'd):
d)
Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated
with the Credit Union's processes, personnel, technology and infrastructure, and from external factors
other than financial risks such as those arising from legal and regulatory requirements and generally
accepted standards of corporate behaviour.
Risk mitigation, including insurance where this is effective.
MANCHESTER CO-OPERATIVE CREDIT UNION (1977) LIMITED
NOTES TO THE FINANCIAL STATEMENTS - (CONT'D)
YEAR ENDED 31ST DECEMBER 2013
Requirements for the reporting of operational losses and proposed remedial action.
Development of contingency plans.
Training and professional development.
Ethical and business standards.
Requirements for the appropriate segregation of duties, including the independent authorisation
of transactions.
Compliance with Credit Union policies is supported by a programme of periodic reviews undertaken
by an Internal Audit Unit and the Credit Union's regulatory body. The results of Internal Audit and
other reviews are discussed with the management of the business unit to which they relate, with
summaries submitted to the Supervisory Committee, senior management and the Board of Directors.
The Credit Union's objective is to manage operational risk so as to balance the avoidance of financial
losses and damage to its reputation with overall cost effectiveness and to avoid control procedures that
restrict initiative and creativity.
The primary responsibility for the development and implementation of controls to identify operational
risk is assigned to Senior Management. This responsibility is supported by overall Credit Union
standards for the management of operational risk in the following areas:
Requirements for the reconciliation and monitoring of transactions.
Compliance with regulatory and other legal requirements.
Documentations of controls and procedures.
Requirements for the periodic assessment of operational risks faced, and the adequacy of
controls and procedures to address the risks identified.
MANCHESTER CO-OPERATIVE CREDIT UNION
ANNUAL REPORT 2013
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