Fannie Mae Case

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Fannie Mae has stated and explained about their risk management structure in the company by saying: • Fannie Mae’s risk management framework and governance structure are intended to provide comprehensive controls and ongoing management of the major risks inherent in their business activities. • Fannie Mae’s ability to identify, to assess, mitigate and control, and report and monitor risk is crucial to their safety and soundness. Fannie Mae used a Three Lines of Defence model to undertake risk. The first line of defence is the effective management of risk by each of these Fannie Mae’s three business units. Single-Family is one and the largest of Fannie Mae’s three business units. In 2014 Single-Family published the net income at approximately…show more content…
Federal Housing Finance Agency (FHFA) has constantly observed operational risk management as a significant financial safety. FHFA has found out from the year of 2006 to 2011, that Fannie Mae had not proven a reasonable and effective operational risk management schedule even thought Fannie Mae required doing it. We also found a weakness in Fannie Mae’s operational risk management. In our point of view that Fannie Mae’s Audit Committee has failed to sufficiently satisfy their member responsibilities to choose a Chief Audit Executive (CAE). It has affected the company and the various governance failures of the Fannie Mae Audit Committee in regard to the CAE selection and management of the conflicts of their auditor faced. It has raised a question whether this Committee sufficiently understands about their governance responsibilities under the law and whether prepared to responsibly exercise their fiduciary duties. Lack of commitment and absent conscientiousness by all members of the Audit Committee to use their delegated omission responsibilities, FHFA’s continued dependence on this Committee will remain in
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