According to the principle of governance, an assessment of the target firm’s risk data aggregation and reporting requirements should be at the top of a bank’s ‘to-do list’ before making the final decision whether or not to proceed with the acquisition or even place a takeover bid. If the bank decides to acquire the target firm, a timeframe should also be set regarding the integration of the risk data aggregation and reporting processes of the two firms

Option B is incorrect: The principle of accuracy states that “Risk management reports should accurately and precisely convey aggregated risk data and precisely reflect risk. Reports should be reconciled and validated.”

Option C is incorrect: The principle of comprehensiveness states that “Risk management reports should cover all material risk areas within the organization. The depth and scope of these reports should be consistent with the size and complexity of the bank’s operations and risk profile, as well as the requirements of the recipients.”

Option D is incorrect: The principle of adaptability states that “A bank should be able to generate aggregate risk data to meet a broad range of on-demand, ad hoc risk management reporting requests, including requests during stress/crises, requests due to changing internal needs and requests to meet supervisory queries.”