Risk Assessment: Identification, Analysis, Evaluation
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Questions and Answers

Which of the following categories includes the example of 'Unexpected absence of key associates'?

  • Processes
  • People (correct)
  • Premises
  • Products
  • What type of operational disruption does 'Damage of physical assets' fall under?

  • People
  • Premises (correct)
  • Products
  • Processes
  • In which category would 'Supplier failure' be classified?

  • People
  • Products (correct)
  • Processes
  • Premises
  • Which example aligns with the 'Processes' category of operational disruptions?

    <p>Failure of IT hardware or software</p> Signup and view all the answers

    Which of the following is NOT a type of disruption under the People category?

    <p>Mismanagement of information</p> Signup and view all the answers

    Which factor is NOT explicitly mentioned as important in risk identification?

    <p>Historical data analysis</p> Signup and view all the answers

    What is the primary purpose of risk identification?

    <p>To find, recognize, and describe risks</p> Signup and view all the answers

    Which of the following describes 'Compliance Risk'?

    <p>Risks that deter achievement of objectives</p> Signup and view all the answers

    What does continual improvement in risk assessment emphasize?

    <p>Systematic and iterative risk evaluation</p> Signup and view all the answers

    Which type of risk includes deliberately sought opportunities?

    <p>Opportunity Risk</p> Signup and view all the answers

    Which factor related to risk identification concerns the mindsets or views of individuals involved?

    <p>Beliefs</p> Signup and view all the answers

    Which of the following is a key component of risk assessment?

    <p>Engagement with stakeholders</p> Signup and view all the answers

    What aspect does 'Best Available Information' in risk assessment emphasize?

    <p>Utilizing historical, relevant, and current information</p> Signup and view all the answers

    What is the definition of risk according to the Philippine National Standard?

    <p>The possibility of something bad happening.</p> Signup and view all the answers

    Which is NOT one of the aspects involved in risk identification?

    <p>Management of human resources</p> Signup and view all the answers

    What principle emphasizes the need for risk management to be integrated into all organizational activities?

    <p>Integrated</p> Signup and view all the answers

    How does risk evaluation contribute to risk management?

    <p>By supporting fact-based decision-making.</p> Signup and view all the answers

    Which of the following best describes the term 'risk management'?

    <p>A process of planning resources to achieve goals.</p> Signup and view all the answers

    What does the ‘Customized’ principle of risk management entail?

    <p>Proportional measures tailored to objectives.</p> Signup and view all the answers

    Which of the following reflects the uncertainty aspect of risk as defined by PNS?

    <p>Effect of uncertainty on objectives.</p> Signup and view all the answers

    What is the goal of risk management as outlined in the principles?

    <p>To create and protect value across the organization.</p> Signup and view all the answers

    Study Notes

    Risk Assessment Framework

    • Components of Risk Assessment: Involves risk identification, analysis, and evaluation.
    • Risk Identification: Involves finding, recognizing, and describing risk.
    • Risk Analysis: Understanding the nature of risk, including its characteristics, sources, consequences, and scenarios.
    • Risk Evaluation: Supports risk-based decision making through a factual, science-based approach.

    Definition of Risk

    • General Definition: Risk is the possibility of negative occurrence, often expressed in sources, events, consequences, and likelihoods.
    • Impact on Objectives: Represents the effect of uncertainty on achieving objectives.

    Purpose of Risk Management

    • Resource Planning: Aims to organize resources effectively to meet specific business goals.
    • Value Creation and Protection: Focuses on improving performance, promoting innovation, and achieving global goals.
    • Proactive Approach: Serves as a tool to prevent risks and hazards within an organization’s value chain.

    Principles of Effective Risk Management (PNS 31000:2018)

    • Integrated: Risk management should be an integral part of organizational activities.
    • Structured and Comprehensive: Aims to provide consistent and comparable results.
    • Customized: Tailored to internal and external contexts aligned with objectives.
    • Inclusive: Involves stakeholders appropriately and timely to integrate their insights.
    • Dynamic: Must respond effectively to changes in a timely manner.
    • Best Available Information: Decisions should be based on relevant, historical, and current information.
    • Human and Cultural Factors: Acknowledges the influence of human behavior and culture on risk.
    • Continual Improvement: Encourages ongoing enhancement through learning and experience.

    Risk Assessment Process

    • Systematic and Collaborative: Should be conducted iteratively, leveraging stakeholder knowledge.
    • Initiation with Risk Identification: Purpose is to identify, recognize, and describe risks.

    Considerations in Risk Identification

    • Types of Sources: Includes both tangible and intangible sources of risk.
    • Time-Related Factors: Factors that may change over time should be considered.
    • Causes and Events: Identify potential threats and opportunities related to risks.
    • Vulnerabilities and Capabilities: Assess the strengths and weaknesses within the organization.
    • Emerging Risks Indicators: Recognize early signs of potential risks.
    • Asset Value: Consider the nature and value of resources affected by risks.
    • Consequences: Evaluate the impacts of risks on organizational objectives.
    • Knowledge Limitations: Understand the reliability of information and knowledge gaps.

    Types of Risks

    • Compliance Risk: Related to government mandates, licenses, business permits, and requirements.
    • Hazard Risk: Risks that can impede the achievement of an organization’s goals and objectives.
    • Opportunity Risk: Risks that organizations may choose to embrace for long-term success.
    • Control Risk: Risks associated with the possibility of inadequate controls.

    Categories of Operational Disruptions

    • People: Lack of skills, manager behavior issues, absence of key associates due to illness or other reasons.
    • Premises: Damage to physical assets or contamination issues.
    • Processes: Failures in IT, security breaches, mismanagement, and communication failures.
    • Products: Quality issues, supplier failures, and logistics problems.

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    Description

    This quiz explores the framework of risk assessment through its key components: identification, analysis, and evaluation. Participants will deepen their understanding of risk characteristics and the nature of risks involved. Test your knowledge on these essential concepts in risk management.

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