Which of the following is true for risk evaluation?
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A. B. C. D.C.
Due to the reason that risk is constantly changing, it is being evaluated annually or when there is significant change.
This gives best alternative as it takes into consideration a reasonable time frame of one year, and meanwhile it also addresses significant changes (if any)
Incorrect Answers: A: Evaluating risk only when there are significant changes do not take into consideration the effect of time.
As the risk is changing constantly, small changes do occur with time that would affect the overall risk.
Hence risk evaluation should be done annually too.
B: Evaluating risk once a year is not sufficient in the case when some significant change takes place.
This significant change should be taken into account as it affects the overall risk.
D: Risk evaluation need not to be done every four to six months for critical processes, as it does not address important changes in timely manner.
Risk evaluation is an important process in risk management, which involves assessing and prioritizing risks based on their likelihood and impact on the organization's objectives. The frequency of risk evaluation depends on various factors, such as the nature and complexity of the business processes, the risk appetite of the organization, and the regulatory requirements.
Option A states that risk evaluation is done only when there is a significant change. This option is incorrect because risk evaluation is an ongoing process and should be done regularly, not just when there is a significant change. Significant changes such as mergers and acquisitions, introduction of new technology or changes in the regulatory environment may trigger additional or more thorough risk evaluations.
Option B states that risk evaluation is done once a year for every business process. This option is also incorrect because the frequency of risk evaluation should be based on the risk appetite and risk exposure of the organization, and should not be limited to an arbitrary timeframe.
Option C states that risk evaluation is done annually or when there is significant change. This option is partially correct because annual risk evaluations are a common practice in many organizations, and additional evaluations may be performed when there is a significant change in the business processes, technology, or regulatory environment.
Option D states that risk evaluation is done every four to six months for critical business processes. This option is also partially correct because more frequent risk evaluations may be necessary for critical business processes or high-risk areas. However, the frequency of risk evaluation should be based on the specific needs and risk exposure of the organization, and may not apply to all businesses.
In conclusion, option C is the most accurate as it states that risk evaluation is done annually or when there is a significant change. However, it is important to note that the frequency of risk evaluation should be tailored to the specific needs and risks of the organization, and should not be limited to an arbitrary timeframe.