Principles of Risk Management - Risk Analysis

Flashcards outlining key concepts from the lecture on Risk Analysis.

Risk Analysis

A process to comprehend the nature of risk and to determine the level of risk.

Risk Criteria

Terms of reference against which the significance of a risk is evaluated.

Risk Assessment

The identification and evaluation of potential risks that may negatively impact an organization.

Likelihood

The probability that a given consequence will occur.

Consequences

The outcomes or effects that result from the occurrence of a risk.

Level of Risk

The magnitude of a risk expressed in terms of the combination of consequences and their likelihood.

Control Effectiveness

The degree to which risk controls eliminate or mitigate risks.

Risk Matrix

A tool used to represent the level of risk by combining likelihood and impact.

Stakeholders

Individuals or groups that have an interest in the decisions and activities of an organization, especially in relation to risk.

Qualitative Analysis

An analysis that is descriptive and based on understanding the qualities or characteristics of risks.

Quantitative Analysis

An analysis that involves numerical values to assess risks.

Risk Rating

The classification of risk based on its level of severity and likelihood.

Risk Treatment

The process of selecting and implementing measures to mitigate risks.

Residual Risk

The remaining risk after controls have been applied.

Escalation and Response

The procedures for addressing risks that exceed acceptable thresholds.