15 Questions
What is the primary goal of risk identification?
To identify, recognize, and describe risks
What is a common source of information used in risk identification?
Historical data and expert opinions
What is the term for a tangible or intangible element that has the potential to give rise to risk?
Risk source
What is the purpose of a risk management policy?
To state the overall intentions and direction of an organization related to risk management
What is the next step after risk identification in the risk management process?
Risk analysis
What is the risk treatment strategy that involves deciding not to start or continue with the activity that gives rise to the risk?
Risk Avoidance
Which of the following risk treatment strategies involves taking or increasing risk in order to pursue an opportunity?
Risk Taking
What is the primary goal of monitoring in the risk management process?
To determine the status of risk performance
What is the term for the risk treatment strategy that involves removing the risk source?
Risk Elimination
What is the purpose of communication and consultation in risk management?
To engage in dialogue with stakeholders regarding risk management
Which of the following risk treatment strategies involves changing the likelihood or consequences of the risk?
Risk Modification
What is the risk treatment strategy that involves sharing the risk with another party or parties?
Risk Sharing
What is a key characteristic of the monitoring process in risk management?
It is a continuous process
What is the ultimate goal of communication and consultation in risk management?
To provide, share, or obtain information and engage in dialogue with stakeholders
What is the focus of monitoring in the risk management process?
Identifying changes from the performance level required or expected
Study Notes
Risk Management Policy
- A statement that outlines the overall intentions and direction of an organization regarding risk management.
Risk Management Process
- Risk Identification: a process of finding, recognizing, and describing risks.
- Risk Sources: tangible or intangible elements that alone or in combination have the potential to give rise to risk.
- Risk identification methods:
- Historical data
- Theoretical analysis
- Informed and expert opinions
- Stakeholder needs
Risk Management Process (Continued)
- Communication and Consultation: continual and iterative processes to provide, share, or obtain information and engage in dialogue with stakeholders regarding risk management.
- Monitoring: continual checking, supervising, or determining the status to identify changes from the required or expected performance level based on risk criteria.
Risk Treatment Options
- Avoiding the Risk: deciding not to start or continue with the activity that gives rise to the risk.
- Taking or Increasing Risk: pursuing an opportunity by taking or increasing risk.
- Removing the Risk Source: eliminating the risk altogether.
- Changing the Likelihood: altering the probability of the risk occurring.
- Changing the Consequences: modifying the impact of the risk.
- Sharing the Risk: distributing the risk with another party or parties through contracts and risk financing.
- Retaining the Risk: making an informed decision to accept the risk.
Learn about risk management policy, its intentions, and direction in an organization. Understand the risk management process, including risk identification, and its components.
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