Section 9.81 Risk Management Flashcards
Objective 5.2: Explain elements of the risk management process
Risk Management
IATMR
A process that involves risk…
- Identification
- Analysis
- Treatment
- Monitoring
- Reporting
To ensure organisation obejctives are achieved in a manor consistent with its risk apetite.
Risk Management Lifecycle
Risk Identification
Recognising potential risks that could impact organisations objectives
Goal is to create a comprehensive risk list based on events hindering organisation objectives
Risk Management Lifecycle
Risk Analysis
Analyse the likelihood and impact of the mentioned risks
● Qualitative e.g Catagories or Quantitative methods e.g numerical values
As a result of the analysis a prioritised list is formed based on the severity of the risk. This guides the risk treatment
Develop strategies
Risk Treatment
Developing strategies to manage the identified risks…
○ Avoidance
○ Reduction
○ Sharing
○ Acceptance
Goal is to reduce potential impact to an acceptable level
Risk Monitoring
● Ongoing process tracking the identified risks
● Monitor residual risks, identify new risks, and review risk management effectiveness
This ensures dynamic responsiveness to organizational changes
Risk Reporting
● Communicating risk information and effectiveness of risk management to stakeholders
● Various forms:
○ Dashboards
○ Heat Maps
○ Detailed Reports
● Crucial for accountability and informed decision-making
