Risk Identification and Evaluation

ABC.

Risk identification is the process of determining which risks may affect the project.

It also documents risks' characteristics.

Following are high-level phases that are involved in risk identification and evaluation: -> Collecting data- Involves collecting data on the business environment, types of events, risk categories, risk scenarios, etc., to identify relevant data to enable effective risk identification, analysis and reporting.

-> Analyzing risk- Involves analyzing risk to develop useful information which is used while taking risk-decisions.

Risk-decisions take into account the business relevance of risk factors.

-> Maintain a risk profile- Requires maintaining an up-to-date and complete inventory of known threats and their attributes (e.g., expected likelihood, potential impact, and disposition), IT resources, capabilities, and controls as understood in the context of business products, services and processes to effectively monitor risk over time.

Incorrect Answers: D: It comes under risk management process, and not in risk identification and evaluation process.

The phases of risk identification and evaluation are crucial steps in the risk management process. The correct answers are A, B, and C.

A. Maintain a risk profile: Maintaining a risk profile is an essential component of risk identification and evaluation. A risk profile is a summary of an organization's risk exposures and helps identify potential risks and their impact. The process of maintaining a risk profile involves identifying, assessing, and monitoring the risks to the organization's operations, assets, and stakeholders. It is an ongoing process that enables organizations to proactively manage risks and minimize their impact.

B. Collecting data: Collecting data is another important phase of risk identification and evaluation. Organizations need to gather relevant data to identify potential risks and assess their impact on the organization. This data can be collected through various methods, such as surveys, interviews, document analysis, and observation. Once the data is collected, it can be analyzed to identify potential risks and their impact on the organization.

C. Analyzing risk: Analyzing risk is the final phase of risk identification and evaluation. This phase involves assessing the identified risks and their impact on the organization. The analysis involves evaluating the likelihood and consequences of each risk and determining their level of priority. This information can then be used to develop strategies to mitigate or manage the identified risks.

D. Applying controls: Applying controls is not a phase of risk identification and evaluation. Instead, it is a phase of risk treatment, where strategies are developed and implemented to manage or mitigate the identified risks. The purpose of applying controls is to reduce the likelihood or impact of the risks to an acceptable level. The controls can be technical, administrative, or physical in nature and should be selected based on the nature of the risks and the organization's risk tolerance.