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Finance Risk Management Certified in Finance (CFR) AAFM

Risk Management assists any entities operating units and staff with managing and balancing risk created by programs and activities. Financial Risk Management is designed to protect against or mitigate losses to the people, facilities, and other assets of the entity. Risk Management strives to provide financial protection and support services to all departments in the organization. The success of the department in fulfilling its responsibilities requires close coordination with, and cooperation from, the total organization for identification of potential risks and prompt notification of claims for losses sustained.

The deregulation of financial markets, the lifting of exchange controls and the motivation to capture international markets has meant that organisations must operate within a volatile global environment. These organisations are vulnerable to financial risk that may result from interest rate, exchange rate or commodity price movements. The purpose of this segment is to equip you with the necessary skills to assess these financial risks and manage them strategically with the use of financial instruments.

The Financial Risk Management segment extends the governance framework covered in the Ethics and Governance segment, further discusses the process of investment evaluation that was covered in the Strategic Management Accounting segment, and examines some of the practical elements and complexities of hedge accounting in relation to the International Financial Reporting Standards that were covered in the Financial Reporting segment.

Risk Management Funtions

  • Identification and analysis of risk and assessment of loss potential
    This requires obtaining information from various units within the university and determining the possible losses and what protections need to be put in place
  • Eliminating or minimizing risks
    Risk Management works with departments to implement loss prevention and safety programs, other mechanisms for risk avoidance or ways in which risk can be transferred to other parties.
  • Implementing loss funding and risk financing mechanisms
    Once the potential losses are ascertained, Risk Management evaluates the costs which would be incurred in order to provide restoration for damages sustained and evaluates funding options to ensure the availability of funds.
  • Claims control and litigation management
    Once damages have been sustained, Risk Management is responsible for providing restoration in a cost-effective manner and managing litigation that may arise. Risk Management also controls costs by obtaining restitution from legally responsible parties.
  • Additional Information and Assistance
    Please see the subject matter pages at the left or contact us for more information.

Approaching financial risks, such as market, credit, and operational uncertainties, in a professional manner is becoming increasingly important. Market swings, interest-rate volatility, loan defaults, falsified data in company reports, and fraud have not only led to serious financial losses but also tarnished reputations in the past few years. It is becoming increasingly important to monitor and manage all types of qualitative as well as financial risks. A holistic approach to risk management enables a company to have a high level of awareness of, as well as uniformly assess, professionally manage and suitably control all of its risks.

Discussions on risk management currently tend to focus on the negative effects (“left tails”) of risks. The same attention ought to be paid to the profitable zone as well. Modern management is based on an integrated approach, which takes into account and permanently monitors both the success and risk factors of a business strategy. A performance-oriented assessment of the effective risk situation consequently enables value-based business management. An integrated performance management system allows targeted and meaningful information to be collected. These can be the basis for the development of an optimal strategy and for taking the right entrepreneurial decisions.

General objectives of CFR Certification

On completion of this segment, you should be able to:

  • identify the types of financial risk faced by an organisation
  • apply a practical approach to assessing, monitoring and managing an organisation’s financial risk
  • understand the funding, liquidity, interest rate, foreign exchange, commodity price and operational risk faced by organisations
  • advise an organisation on the procurement and management of funding and the allocation to competing long-term investments
  • advise an organisation on the types of financial instruments that could be used to best manage an organisation’s financial risk
  • demonstrate the practical elements of accounting for derivatives, for both embedded derivatives and derivatives used for hedging purposes
  • explain a practical risk management approach and control framework to manage both financial and operational risks

Syllabus of Finance Risk Management-Certified in Finance Risk (CFR) American Academy of Finance Management

  1. What is Financial Risk Management?

presents an introduction to the financial risk facing organisations and the risk management process used to address financial risk. The methodology and concepts introduced in this module will be expanded upon throughout the segment.

  • Understand the financial risk management process
  • The impact of history on financial markets
  1. Identifying Major Financial Risks

strategic and operational foreign exchange and commodity risk management is also a core skill of a corporate risk manager. The key drivers that affect currencies and commodity prices are examined and the organisation’s exposure determined. Strategic management of these exposures is achieved through the use of financial instruments and best risk management practice.

  • How to identify key factors that affect interest rates, exchange rates, and commodity prices
  • Evaluate the various financial risks that affect most organizations
  • How key market risks arise, such as interest rate risk, foreign exchange risk, and commodity price risk
  • The impact of related risks such as credit risk, operational risk, and systemic risk
  1. Interest Rate Risk

Strategic and operational interest rate risk management is a core skill of a corporate risk manager. The global financial crisis of 2007–09 resulted in many corporate failures, and management can no longer claim ignorance of the dangers inherent in exposure to interest rate volatility or of the techniques for its management. This module explores the fundamental processes of interest rate risk management and its interrelationship with liquidity management and solvency.

  • Identify opportunities to reduce interest rate exposure
  • Evaluate ways to manage interest rate risk with forward rate agreements, futures, and swaps
  • Assess the use of interest rate options
  1. Foreign Exchange Risk

Strategic and operational interest rate risk management is a core skill of a corporate risk manager. The global financial crisis of 2007–09 resulted in many corporate failures, and management can no longer claim ignorance of the dangers inherent in exposure to interest rate volatility or of the techniques for its management. This module explores the fundamental processes of interest rate risk management and its interrelationship with liquidity management and solvency

  • Assess ways to reduce foreign exchange exposure through rearranging business processes
  • Compare foreign exchange hedging strategies
  • Evaluate the risks associated with specific derivatives products and strategies
  1. Foreign Exchane Risk

This module describes all aspects and issues as related to foreign exchange risks with all its implications.

  • Assess ways to reduce foreign exchange exposure through rearranging business processes
  • Compare foreign exchange hedging strategies
  • Evaluate the risks associated with specific derivatives products and strategies
  1. Liquidity Risk

This module examines the procedures involved in liquidity and working capital management. The various debt and equity markets are explained with reference to organisational funding needs and suitability.

  • Identify the major sources of liquidity risk
  • Identify common methods for managing liquidity risk
  1. Credit Risk

This module examines the procedures involved in Credit Risk analysis and the related credit governance. The various types of credit analysis and credit risk management methods are exposed in this module.

  • Identify the major sources of liquidity risk
  • Identify the major sources of credit and counterparty risk
  • Identify common methods for managing credit risk
  • Understand the basic types of credit derivatives
  1. Commodity Risk

Strategic and operational foreign exchange and commodity risk management is also a core skill of a corporate risk manager. The key drivers that affect currencies and commodity prices are examined and the organisation’s exposure determined. Strategic management of these exposures is achieved through the use of financial instruments and best risk management practice.

  • Aspects of commodity-related risks
  • Evaluate basic forward and futures strategies for managing commodity risk
  • Identify additional strategies for managing commodity price risk
  1. Risk Management Framework: Policy and Hedging

This module discusses the implementation of a risk management framework and associated controls to manage financial risks and the associated operational risks to which an organisation may be exposed. The key risk management principles are explored, including the roles and responsibilities of senior executives.

  • Comment on the importance of financial risk management policy
  • Develop an organizational profile to support risk management policy
  • Evaluate opportunities to develop or refine a risk management policy
  1. Measuring Risk

This module describes on strategies and techniques used to measure effectively all the inherent risks, and assessing the most applicable methodologies; while in paralell assuring strategy to estimate the risks.

  • Differentiate between measures of exposure and measures of risk
  • Consider the strengths and weaknesses of risk measurement methodologies
  • Identify alternative strategies for estimating risks

10.Global Initiatives in Financial Risk Management

       This module describes challenges pertinent in financial risk management, assist participant in indientifying innitiatives to reduce risks in particular areas; and moreover describes on the strategy to evaluate changes in capital adequacy that relate to systemic risks.

  • Understand the challenges that exist in financial risk management
  • Identify initiatives for reducing risk in key areas such as settlements, trading, and payments
  • Appreciate the significance of accounting and regulatory initiatives
  • Evaluate how changes in capital adequacy can reduce systemic risk

 

 

About The AAFM ® Board of Standards

World Recognized Standards and Certification ™

The AAFM ® American Academy of Financial Management ® is world recognized – independent Board of Standards and Accreditation Council for professionals with members in 150+ countries offering exclusive certifications to candidates who meet the highest standards and assessment. AAFM is a global self regulatory organization and in alliance with the top 800 accredited business school programs globally. AAFM is a member of the ACBSP, AACSB, ICE, ANSI, NOCA, AABFS and is referenced by The United Nations, FINRA, US Department of Labor, Investopedia Forbes Dictionary. AAFM Certifications are recognized by the Arab Academy, India Academy, Latin Consortium, and the African Economist Association. The AAFM is licensed to offer the CWM Certification, the MFP Master Financial Planner Program and the AFA Accredited Financial Analyst Certification.

The AAFM ® Board of Standards

The AAFM ® American Academy of Financial Management ® is an independent worldwide Board of Standards and Accreditation Council for management professionals. We are a global SRO self regulatory organization that recognizes the highest criteria in academic standards, industry experience, ethics, and continuing education mandates as dictated by the IBANEZ and PEEL USA Supreme Court decisions dicta on financial board certification and credentials. ©

AAFM ® International Board of Standards is listed and disclosed in various governmental registries around the world such as the Dept of Education, Dept of Labor and financial regulatory educational registry.  AAFM ® has members in 150+ countries with a quarter of new members in the US being women.  AAFM ® is a professional association member of The  ACBSP Accreditation Council for Business Schools and programs and the AACSB™ International – The Association to Advance Collegiate Schools of Business. The AAFM ® is the first financial organization in the world to achieve direct alliance with government recognized business school accreditation agency . With recent conferences and summits in Argentina, Shanghai, Mexico, Geneva, Singapore, and the Caribbean, AAFM is at the forefront of International Finance, Law, & Economics. Read our AAFM Global Recognition, Listings and Disclosure with Various Authorities.  Because AAFM ® has a global recognition policy with the ACBSP and the AACSB International, this educational recognition represents the Top 2 Government Recognized Accreditation Agencies Worldwide for Business Schools and represent 560 of the top business schools.

With AAFM ® liaison & representative offices in China, India, Africa, Arabia, West Indies, EU, UK, Singapore, Philippines, and Latin America’s,  the AAFM ®  Certification Board of Standards is the only truly worldwide graduate  certification standards body for financial executives, managers, analysts, planners, faculty, investment executives and counselors. Further, AAFM ®  is the first purely financial certification organization to work directly with the US, Arabian, India and Chinese Governmental bodies to improve education, standards, quality, and assessment.   Further, AAFM®  has a legal coexistence agreement with the CFP™ Board of Standards and The CFA Institute formerly the AIMR™ Worldwide in which the AAFM ®  brand, select certifications,  and various credentials are protected trademarks globally.   AAFM ®  is also disclosed and listed in the US Dept. of Labor, Dept of Education guides, Finanical Regulatory Websites, the US Government Occupational Handbook,  and with the Bureau of Labor and Statistics.   Further, the AAFM ®  Board of Standards is listed in the the United Nations Civil Society Registry along with other top financial and accounting organizations.

 

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