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Questions and Answers
What is risk management defined as by ISO 31000?
What is credit risk?
What is risk reduction?
What does risk mitigation involve?
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What is risk?
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What is the focus of risk management?
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What is the primary goal of risk management in an organization?
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What is a common characteristic of risk?
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What is the primary difference between risk reduction and risk mitigation?
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What is the primary focus of credit risk?
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What is a key component of the risk management process?
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What is the primary goal of risk mitigation strategies?
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Study Notes
Risk Management
- Defined as the process of identifying, assessing, and controlling threats to an organization's capital and earnings.
- Involves a continuing process to identify, analyze, evaluate, and treat loss exposures, and monitor risk control and financial resources.
- Threats can include financial uncertainty, legal liabilities, strategic management errors, accidents, or natural disasters.
Risk
- The possibility of something bad happening, which provides opportunities while exposing us to outcomes that we may not desire.
- Involves uncertainty about the effects/implications of an activity with respect to something that humans value (health, well-being, wealth, property, or the environment).
- Often focuses on negative, undesirable consequences.
Credit Risk
- The possibility that a bank borrower or counterparty will fail to meet its obligations following agreed terms.
Risk Reduction
- Involves identifying and assessing risks, and implementing various measures and processes aimed to reduce them.
- Different processes, controls, and measures are in place to reduce the risk that organizations and workers face on a regular basis.
Risk Mitigation
- The process of planning for disasters and having a way to lessen negative impacts.
- A strategy to prepare for and lessen the effects of threats faced by a business.
- Takes steps to reduce the negative effects of threats and disasters on business continuity.
Risk Management
- Defined as the process of identifying, assessing, and controlling threats to an organization's capital and earnings.
- Involves a continuing process to identify, analyze, evaluate, and treat loss exposures, and monitor risk control and financial resources.
- Threats can include financial uncertainty, legal liabilities, strategic management errors, accidents, or natural disasters.
Risk
- The possibility of something bad happening, which provides opportunities while exposing us to outcomes that we may not desire.
- Involves uncertainty about the effects/implications of an activity with respect to something that humans value (health, well-being, wealth, property, or the environment).
- Often focuses on negative, undesirable consequences.
Credit Risk
- The possibility that a bank borrower or counterparty will fail to meet its obligations following agreed terms.
Risk Reduction
- Involves identifying and assessing risks, and implementing various measures and processes aimed to reduce them.
- Different processes, controls, and measures are in place to reduce the risk that organizations and workers face on a regular basis.
Risk Mitigation
- The process of planning for disasters and having a way to lessen negative impacts.
- A strategy to prepare for and lessen the effects of threats faced by a business.
- Takes steps to reduce the negative effects of threats and disasters on business continuity.
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Description
Risk management is the process of identifying, assessing, and controlling threats to an organization's capital and earnings. It involves identifying, evaluating, and prioritizing risks to mitigate adverse effects.
