Unit 1 Flashcards
Definitions of risk -IRM
The combination of the probability of an event and it’s consequences
Definition of risk -ISO Guide 73
Effect of uncertainty on objectives
Risk definition-IIA
Uncertainty of an event occurring that could have an impact on the achievement of objectives. Measured in terms of consequences and likelihood
Risk definition-Hopkins
An event with the ability to impact (inhibit, enhance or cause doubt about) the effectiveness and efficiency of the core processes of an organisation
Types of risk
Compliance (or mandatory)
Hazard (or pure)
Control (or uncertainty)
Opportunity (or speculative)
Definition of risk management-ISO
Co-ordinated activities to direct and control an organisation with regard to risk
Definition of risk management-Hopkin
Management activities to deliver the most favourable outcome and reduce the volatility or variability of that outcome
Definition of credit risk
The risk of loss if another party fails to perform its obligations or fails to perform them in a timely manner
Definition of market risk
The risk that arises from fluctuations in values of, or income from, assets or interest or exchange rates
Definition of liquidity risk
Risk that sufficient financial resources are not maintained to meet liabilities as they fall due
Definition of operational risk
The risk of loss resulting from inadequate or failed internal processes, people or systems or from external events eg cyber attack
Principles of risk management
PACED. Proportionate; Aligned; Comprehensive; Embedded; Dynamic
Aims of risk management
MADE2. Mandatory; Assurance; Decision Making; Effective and Efficient core processes
Definition-key dependencies
Key things that the organisation needs to be successful; they might be internal or external things but in short, they are what the business depends on for its future success
Definition-core processes
Fundamental to org success because they are the means of delivery of strategy and continuity of operations. A core process can be defined as ‘the collection of activities that deliver a specific stakeholder expectation’
