The Risk Assessment Procedure prioritizes risks in order to manage them effectively and efficiently. The procedure substantially decreases the opportunity for material weaknesses to go undetected. It pertains to the identification and assessment of risk. (18 pages, 3860 words)
Risk Assessment Responsibilities:
The Risk Manager is responsible for identifying and assessing risk, directing the risk assessment, and reporting the results of the assessment to the Board of Directors.
The Board of Directors is responsible for reviewing and approving the risk assessment prior to development of a Risk Management Plan (see AC1030 RISK MANAGEMENT).
Risk Assessment Definitions:
Hazard – Source of danger; specific situation that may influence the probability and/or extent of loss.
Material – Relatively significant or important in the context of the organization.
Risk – (n.) 1. A function of the likelihood of an event and its consequences (impact); 2. Possibility of loss or injury. (v.) Expose to hazard or danger; incur danger of.
Risk exposure – Numeric value assigned to a risk, allowing comparison of different risks.
Risk matrix – Tool used to illustrate and prioritize risks.