Chapter 5 Flashcards
Define Risk
The possibility that event will occur and negatively affect performance
Define opportunity
The possibility that an event will occur and positively affect performance
Define Uncertainty
The inability to predict outcomes because of a lack of information (not the same as risk)
What are the categories of an Event risk?
Disaster - e.g. fire, flood
Regulatory - e.g. new laws are introduced
Reputation - risk of damage to reputation
Systemic - failure by from a part of the supply chain
Define Property Loss
Possible loss of assets
Define liability loss
Loss occurring from legal liability to 3rd parties
Define personnel loss
Loss due to injury, sickness or death of employees
Define pecuniary loss
Loss from defaulting debtors
Define interruption loss
Being unable to operate
What does the TARA model represent?
The general risk responses
What does the TARA model stand for
Transfer risk to a third party e.g. insurance
Avoidance of risky activities
Reduction of risk via controls
Acceptance of losses occurring
What is the difference between a crisis and a disaster?
A crisis is an unexpected event that threatens the wellbeing of a business which impacts stakeholders
A disaster is when the business’s operations break down for some reason leading to potential losses.
What does risk aversion measure?
The appetite for risk
Define exposure
The measure of the way in which a business is faced by risks.
Define Operational risks
Risks relating to processes, people, systems. This includes Event risks and Cyber risks
