Volume 2 — Governance and ControlsGovernance and Controls © Copyright 2002, All rights reserved 13 Middle Office ― Responsibilities and Duties (continued) Risk Analysis • Provide daily report of risk exposures (e.g., P&L positions and change drivers) to the ROC. • Perform periodic back-testing and stress testing. • Calculate MTM and risk metrics such as VaR, EaR, and CFaR of portfolios on a daily basis. • Analyze and explain changes in the portfolio. • Calculate and monitor position Greeks. Valuation • Validate and model forward curves for all commodity exposures (market analysis). • Access market quotes for MTM assessment. 3.3 Back Office Back-office functions include processes in support of the front office such as accounting, invoicing, dispute resolution, check-outs, actualization, accounts receivable, accounts payable, tax reporting, financial reporting (including disclosures), and contract administration. Back Office ― Responsibilities and Duties • Perform financial accounting and compliance. • Comply with tax rules and make appropriate tax elections. • Account for hedging and derivatives activities. • Record realized and unrealized gains and losses. • Reconcile general ledger and cash positions. • Reconcile margin accounts. • Implement tax-hedge accounting policies and other regulatory tax requirements. • Develop and maintain documentation outlining standard procedures for conducting business. • Invoice counterparties. • Resolve billing disputes. • Perform daily/weekly/monthly checkout with counterparties. • Develop and maintain documentation outlining standard procedures for conducting business.