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Risk assessment

Risk Assessment is a structured risk assessment methodology that enables:

  • Identify risks that limit or hinder the achievement of corporate goals;
  • Determine the relative level of risk;
  • Develop suitable control strategies to ensure greater coverage of areas where significant risks are present;
  • Define the relevant business model in terms of main and secondary processes;
  • Analyze business processes and identify the most sensitive ones;
  • Identify and assess, for each process, the risks and related controls;
  • Develop and maintain an innovative enterprise risk management approach.
  • Risk estimation is a course of action during which different strategies are evaluated and decisions are made on the risks deemed acceptable. These strategies have different effects on risks, including risk reduction, removal, and redefinition.

Eventually, an acceptable level of risk is determined and a strategy is adopted accordingly. The following are involved in this process: cost-benefit calculation, risk tolerance estimation, and preference quantification. Business risk is a component present in every business activity and is a potential event that reduces the likelihood of achieving corporate business objectives.

Business risk can be classified into:

INTERIOR

  1. strategic (e.g., market share, image);
  2. operational (e.g., production budgets, quality);
  3. funded (e.g., fraud, funded budget);
  4. compliance (e.g., compliance with laws, codes of conduct).

EXTERIOR

  1. laws and regulations;
  2. competition;
  3. economic trends