should incorporate a segregation of duties-a fundamental element of an effective internal controls environment. To be effective, the RMU should be independent in both fact and appearance. This assertion is ratified by industry and professional guidance. For example, the Third Standard produced by the Working Group reads in part: Where possible, an independent internal group . . . should perform oversight. . . . Functions checked independently should include: 11 Oversight of investment activity II Limits, monitoring, exception reports and action plans relating to exception reports It Stress tests and back tests II . . . Fiduciaries should verify that Managers conduct independent risk oversight of their employees and activities. In their book, The Practice of Risk Management, Robert Gumerlock and Robert Litterman ratify this Standard by stating: It is essential that the risk management function itself must be established independently from the business areas and operate as a controlling or monitoring function. The role of the risk management function is to provide assurance to senior management and the Board that the firm is assessing its risk effectively, and is complying with its own risk management standards. This means that the risk management function has to have an independent reporting line to senior management. The risk monitoring unit is a necessary part of the process that ensures best practices and consistency of approach across the firm. It helps ensure that a process exists by which risks are identified, measured, and reported to senior management in a timely fashion. The function is part of an internal control framework designed to safeguard assets and ensure that such assets are managed in accordance with each organization's expectations and management direction. Objectives of an Independent Risk Management Unit The objectives of the RMU are: II The RMU gathers, monitors, analyzes, and distributes risk data to managers, clients, and senior management in order to better understand and control risk. This mission requires that the RMU deliver the right information to the right constituency at the right time. II The RMU helps the organization develop a disciplined process and framework by which risk topics are identified and addressed. The RMU is part of the process that ensures the adoption and implementation of best risk practices and consistency/comparability of approach and risk consciousness across the firm. As such it is a key promoter of an organization's risk culture and internal control environment.