7.2 The standard risk management process Flashcards
What is meant by the “standard risk management process”?
The core elements of any risk management process (not including the more complicated elements such as enterprise risk management)
Is the standard risk management process the same in all organisations?
No, while the core elements will be similar, there will be differences according to the nature, scale and complexity of the organisation.
At its most basic, the standard risk management process consists of which four elements?
Identify risks
Assess exposure
Monitor exposure
Control exposure
The core risk management process has two key characteristics:
1 The process is s__________ (i.e. identification comes before assessment, which comes before monitoring and then control).
2 The process is c________ , with no start or end.
sequential
circular
Is it only boards and senior management that use risk management?
No, managers and other staff will be constantly (and sometimes unknowingly) engaged in risk management.
What is risk identification?
Identifying the risks to which an organisation is expose, for better or worse.
Why is it important (and difficult) to maintain an accurate picture of current risks?
Organisations operate in a constantly-changing environment and so an accurate picture of risks is important for good decision making.
The purpose of risk assessment is to determine the potential s____________ of risks and r____ them to establish their priority.
significant
rank
How is risk exposure calculated?
Probability x impact = exposure
What is the purpose of risk monitoring?
To provide a comprehensive picture of the risk profile of an organisation.
Risk monitoring looks at the risks an organisation is exposed to, the effectiveness of its c_______ and other activities used to understand and manage risk e__________.
controls
exposure
Risk monitoring involves collection of different types of data. What is “loss data”?
Data on risk events that have occurred in the past.
What is risk control?
The application of tools and techniques to influence the probability and impact of risk events, or to mitigate disruption.
